Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Suggested Changes to Improve the Medicaid-Funded Residential Care System


Respondents had numerous suggestions for improving the state's residential care system generally, and Medicaid specifically.

  • We need adequate reimbursement for dementia care, more outcome oriented regulations, and providers need to give full disclosure about what is and is not provided.

  • We need more congregate housing with private rooms. We're looking how to convert existing bricks and mortar--we need specialized housing for persons with disabilities and those with cognitive impairment that is a notch above what's available in our adult care homes for persons on public assistance. We would like to provide private rooms with a bath and kitchenette and round the clock support.

  • We do not need more residential care beds in North Carolina. We need to upgrade the beds we have. There are a number of old facilities that are substandard.

  • We have plenty of beds and facilities, what we need now is better living conditions.

  • What North Carolina needs is a better mechanism for managing the long term care needs of all the populations we serve. Currently, our system is very fragmented. Too many agencies have responsibility for different pieces of the system: the Division of Facilities Services, the Division of Social Services, the Division on Aging. The state has been looking into ways to consolidate--trying different approaches--to manage funds on a need basis rather than program category, but it constantly faces opposition. There are too many players. No one argues with what needs to happen--they argue about who will do what and who will have control. Each department needs to be better consolidated. It will happen eventually, but not for at least five years.

  • The state needs a designated funding stream for dementia special care. There are very few Medicaid clients in these units because there is just not enough money. About three years ago there were new dementia regulations, which providers fully supported, and the state said that money would be available but it didn't happen. The model is so cost prohibitive that Medicaid folks can't be in it--so they get transferred to a nursing home because they can't afford a special care unit, which provides extensive cueing and supervision.

A few mentioned that adult care homes should serve homogeneous populations, and that the state needed different regulations to assure the quality of care for the different populations.

  • I don't believe in mixing diagnoses in one building. We need to separate the populations. Have separate licensing categories by type of population served.

  • The market should call for more specialization of clients in adult care homes, and hopefully the industry and policy makers will push it--create rules to not mix types of clients (e.g., putting the young SMI with the elderly.)

  • There should be separate licensing standards for adults with serious mental illness than for the frail elderly. These populations have very different needs.

  • Some homes serve a heterogeneous population: Younger SMI and DD and the elderly all together. There are still stories in the media about the non-vulnerable preying on the vulnerable--rapes and even murder.

A number stated that the state needed better assessment procedures and data for a number of purposes.

  • It is very difficult for the state to figure out exactly what it should be doing because they do not have sufficient data to make decisions. The state does not have a good assessment procedure. The form currently used is only two pages and is not appropriate for care planning. The state needs an appropriate assessment instrument to better understand the needs of those being served.

  • The State's Department of Social Services has been working to develop and automate an assessment form for three years. It is costing millions and it is still not completed, but the General Assembly will be cutting funding for this project.

  • There are two questions in North Carolina--are adult care homes being paid enough and what are they doing with the payments they receive? Getting data from the homes after they started getting Medicaid money was like pulling teeth.

  • The Department of Human Services has consultants who are looking at reimbursement for all long term care facilities. They're having no problem making recommendations for nursing homes and ICF-MRs because they have the data for these facilities. But they don't know what to recommend for residential care because they do not have adequate data. The state hopes to have the data from adult care homes computerized by 2004.

Two respondents said the that the state needed to better utilize Medicaid funding, noting that North Carolina has a 64 percent match, and the Special Assistance payment is all state and county money.

  • The state should use Medicaid to broaden coverage, specifically for the MRDD, SMI and dementia folks.

  • If the type of care that could be provided in assisted living facilities were increased, then they could fund more of the care costs under Medicaid.

Another expressed concern about cuts in the state's Medicaid budget.

  • The most important issue we are dealing with now is opposing proposed cuts in the Medicaid program, specifically, a proposed across the board decrease in the service rates for all providers.

A number said that the state needed to better support home care.

  • People shouldn't have to go into an adult care home to get Special Assistance and Medicaid.

  • North Carolina has rules allowing spousal separation of income that make it relatively easy for a moderate income household to qualify one member for nursing home benefits without impoverishing the community spouse. Similar generosity is not provided for those applying for waiver services.

Several noted that the state should permit family supplementation in assisted living settings to pay for private rooms.

  • It would be great if families were permitted to pay the difference in cost between a semi-private and private room in assisted living for folks on Medicaid. But there are concerns about equity. Providers may give priority in admissions to those whose families can supplement.

  • There are an increasing number of requests for information about SSI/Medicaid and family supplementation from market rate assisted living facilities who have residents who have spent down and they want to see if they can figure out some way to keep them.

  • Provider associations are getting more calls about this issue than ever before. People have spent down in market rate assisted living and they have to move to an adult care home and the family wants to supplement their income to pay for a private room.

  • When private pay folks with dementia are in special care units and their resources run out--families often pay the difference in cost between the regular rate and the special unit rate, which is about $600 a month.

One noted that even continuing care retirement communities (CCRC) have requested information on how to keep private pay residents who have spent down.

  • A CCRC called the other day and wanted to know how to deal with spend downs. We told them that they have to become a Medicaid Provider and be licensed by DSS, then their residents will be eligible for a state supplement if they meet asset and income tests.

View full report


"med4rcs.pdf" (pdf, 3.73Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®