New Report Details Soaring Medicaid Spending For Home And Community Care

The National Center for Assisted Living (NCAL) recently released a comprehensive report entitled “State Medicaid Reimbursement Policies and Practices in Assisted Living,” that details the wide variation in how states determine Medicaid payment levels for assisted living communities and other related policy issues.  The findings reveal that the number of people receiving Medicaid coverage in assisted living communities grew significantly from 2007 to 2009 after virtually no growth over the previous three years.

The report shows important data for those developing policy and operating programs for elder Americans. As assisted living communities are growing as an option under the Medicaid program, data on the way reimbursement policies and practices are implemented are critical to the successful offerings.


Among the major findings are the following:

  • The number of people receiving Medicaid coverage for services in licensed assisted living settings increased 9.2% between 2007 and 2009, and 43.7% between 2002 and 2009. 
  • Nationwide, about 131,000 low-income frail elderly Americans receive services in assisted living communities under the Medicaid program (about 134,500 if programs with state-only funding are included).
  • Thirty-seven states provide coverage under §1915 (c) home and community based services waivers to cover services in residential settings; thirteen states provide coverage directly under their state Medicaid state plan; four include services in residential settings under §1115 demonstration program authority; and six use state general revenues. States may use more than one funding source. 
  • Tiered rates are the most common methodology for reimbursing assisted living providers (19 states) and flat rates are used in 17 states.
  • Twenty-three states cap the amount that may be charged for room and board.
  • Twenty-four states supplement the beneficiary’s federal Supplemental Security Income (SSI) payment, which states typically use as the basis for room and board payment.  SSI payments combined with state supplements range from $722 to $1,350 a month depending on the state.  Some states provide no supplement.
  • Twenty-five states permit family members or third parties to supplement room and board charges. 
  • Twenty-three states require apartment style units; 40 states allow units to be shared; and 24 states allow sharing by choice of the residents.
  • Screening for mental health needs is performed by case managers and assisted living community staff in nine states; by case managers only, in 10 states; and by assisted living staff only, in nine states.
  • Mental health services are arranged by assisted living communities in 16 states; case managers in 20 states; and may be provided directly by assisted living communities in three states.

Information for the report was obtained from two primary sources.  Baseline information on state assisted living reimbursement policies and practices was obtained from previous studies sponsored by the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Policy and Evaluation, and RTI International in 2002, 2004, and 2007.

The report was released by NCAL.