Trends and Policy Developments in
Assisted Living
National Association for Regulatory Administration
Webinar
August 16, 2011
Karl Polzer
NCAL Senior Policy Director
Assisted Living Residents
Data from ALFA, ASHA, AAHSA, NCAL & NIC
2009 Overview of Assisted Living
• Average Age = 86.9
• Average Age at Move-in = 84.6
• 73.6% Female; 26.4% Male
• Average Income = $27,260
• Average Assets (including home) = $431,020
• Median Income = $18,972
• Median Assets (including home) = $205,000
Prior Residence
Data from ALFA, ASHA, AAHSA, NCAL & NIC
2009 Overview of Assisted Living





Private home/apartment
Nursing home
Retirement/IL
Family residence
Different ALF or group home
70%
9%
9%
7%
5%
Health Conditions
Data from ALFA, ASHA, AAHSA, NCAL & NIC
2009 Overview of Assisted Living









Hypertension
Arthritis
Alzheimer’s/Dementia
Coronary Heart Disease
Depression
Osteoporosis
Macular Deg./Glaucoma
Diabetes
Stroke
66%
42%
38%
33%
30%
27%
19%
17%
14%
ADL Dependence
ALF Data from 2009 ALFA, ASHA, AAHSA, NCAL & NIC Survey
•
•
•
•
•
ADL
Bathing
Dressing
Toileting
Transfer
Eating
ALF
64%
39%
26%
19%
12%
NF
96%
90%
84%
80%
53%
• 81% of ALF residents need help with meds.
(Average 9.9 meds daily – 7.6 prescriptions and 2.3 OTCs)
Other Care Issues
Data from ALFA, ASHA, AAHSA, NCAL & NIC
2009 Overview of Assisted Living
• Residents need assistance with 4.5 IADLs on average
with 4 out of 5 needing help with housework,
laundry, medications, transportation and meal
preparation
• 54% use a walking device (cane, walker, etc.) and 22%
use a wheelchair
• 31% bladder incontinent; 14% bowel incontinent
• 92% of communities arrange for /provide hospice care
Residents Moving Out
Data from ALFA, ASHA, AAHSA, NCAL & NIC
2009 Overview of Assisted Living
 Nursing home
59%
 Home
9%
 Another ALF
11%
 Relative’s home
5%
 Hospital (other than short term)
7%
 Independent living
4%
 Hospice
2%
 Other
4%
One-third (33%) of residents die in the assisted living
setting.
Assisted Living Costs & Resident Income
Data from ALFA, ASHA, AAHSA, NCAL & NIC
2009 Overview of Assisted Living
• Average annual cost of all AL communities = $36,264
(single occupancy)
• Average annual cost dementia care unit = $50,400
– Can be > $100,000 in high-cost areas.
• Median resident income (all residents) = $18,972
• Median resident assets (including home) = $205,000
National Survey of Residential Care Facilities
• Which federal agencies?
 Centers for Disease Control and Prevention’s National
Center for Health Statistics. Collaborating with:
•
Office of the Assistant Secretary for Planning and
Evaluation (HHS)
•
Agency for Healthcare Research and Quality (HHS)
•
CDC’s National Center for Chronic Disease Prevention
and Health Promotion
•
CDC’s National Center for Immunization and
Respiratory Diseases (HHS)
•
US Department of Veterans Affairs
Why?
• To collect information to help policy makers,
health care planners, and providers better
understand, plan for, and serve the future
long term care needs of the US aging
population.
Data Collection
• Approximately 2,250 facilities were randomly
selected to participate
• Information collected on:
−
−
−
−
Facility characteristics (size, ownership, etc.)
Resident demographics
Resident health, functional status, activity involvement
Resident services used and charges
• Survey completed and data is being tabulated
and analyzed. Final report due early 2012.
National Center for Health Statistics
• Reconfiguring how Feds will collect data on
paid, regulated LTC providers:
•
•
•
•
•
Nursing Homes
Home Health Care
Residential Care (including assisted living)
Adult Day Care
Hospice
• Biennial collection of ALF data that includes
“policy relevant” characteristics:
•
•
•
•
Provider Services
Provider Staffing
Provider Practices (e.g. ,transitioning or PCC)
User Characteristics (e.g., % needing ADL assistance)
National Center for Health Statistics
• Reconfiguring how Feds will collect data on
paid, regulated LTC providers:
•
•
•
•
•
Nursing Homes
Home Health Care
Residential Care (including assisted living)
Adult Day Care
Hospice
• Biennial collection of ALF data that includes
“policy relevant” characteristics:
•
•
•
•
Provider Services
Provider Staffing
Provider Practices (e.g. ,transitioning or PCC)
User Characteristics (e.g., % needing ADL assistance)
Federal Policy Perspective
• Battle continues over raising debt ceiling/federal
spending.
• Congress is cutting spending and will debate
major Medicare and Medicaid cuts.
• March 15 Senate Aging Committee AL Roundtable:
What will be the ramifications?
• Two CMS proposed rules threaten AL participation
in Medicaid.
• First findings from the national study of assisted
living may arrive by year end.
NCAL’s Policy Priorities
• Keeping Regulation of Assisted Living at
the State Level
• Keeping Assisted Living Included in CMS’
definition of Medicaid HCB settings
• Protecting, Improving Medicaid Coverage
• Completing the Medicare Part D Co-Pay Fix
• Helping Members Navigate the New Health Care
Reform Law
State Regulatory Trends
• In 2010 and January 2011, at least 18 states made AL
legislative/regulatory changes.
• ID, KY, OR, PA, SC, & TX made extensive changes.
• Focal points of change include: Life safety, Disclosure,
Alzheimer’s standards, Medication Management,
Background Checks, & Enforcement.
• Other areas of change: move-in/move-out requirements,
resident assessment, protection
from exploitation, staff training,
TB testing standards.
Source: NCAL 2011 State Regulatory Review
State Regulatory Trends
• PA implemented new assisted living regulations on
1/18/2011, creating 2nd level of licensure alongside
personal care homes.
• In 2010, OR established rules for endorsement of care
in Memory Care Communities, expanding previous
Alzheimer’s care regulations.
– Rules focus on person-centered care, consumer protection,
staff training specific to caring for people with dementia, &
enhanced physical plant & environmental requirements.
• Once implemented, RI legislation will expand types
of AL residents that may receive skilled nursing care
or therapy, and the length of time they may receive
such services.
State Regulatory Trends
• KY clarified that AL staff can assist with selfadministration of medications.
• WA clarified that boarding homes must fully disclose
to residents a facility’s policy on accepting Medicaid
as a payment source.
• NJ legislation requires an AL residence or
comprehensive personal care home that surrenders
its license and promised not discharge Medicaid
residents to escrow funds to pay for care in an
alternate facility.
NCAL State Regulatory Review, 2011 edition available at: www.ncal.org
NCAL Life Safety Initiatives
• Concern among fire marshals, experts about
decreased ability of AL population to evacuate
without assistance is challenging current life safety
standards. NCAL taking proactive steps.
• National Fire Protection Association committee
accepted NCAL Life Safety Code proposals for
existing buildings at its June annual meeting.
• NCAL also will submit proposals for new
construction to International Building Code
committee .
• Objectives: Ensure safety; avoid shift to institutional
standards, costly retrofitting; harmonize two major
codes impacting AL.
Federal Regulation of AL?
• Trend toward AL residents with more health needs and
more residents with dementia is leading states to increase
AL regulation, increasing pressure for greater uniformity
of state regulation.
• Senate Aging Committee held assisted living
“Roundtable” discussion in March. Several state AL
regulators were at the table.
• CMS proposed rule defining HCBS settings contains list
of conditions for AL participation. Is this the beginning
of federal regulation?
• Many leaders in Congress are on record as supporting
greater federal oversight (e.g. Henry Waxman, Pete Stark).
CMS Proposed Rule Defining HCBS Settings
CMS Proposed Rule
“…that HCBS: must be integrated in the community; must not be
located in a building that is also a publicly or privately operated
facility that provides institutional treatment or custodial care;
must not be located in a building on the grounds of, or
immediately adjacent to, a public institution; or, must not be a
housing complex designed expressly around an individual’s
diagnosis or disability, as determined by the Secretary. Such
qualities may include regimented meal and sleep times,
limitations on visitors, lack of privacy and other attributes that
limit individual’s ability to engage freely in the community.”
CMS Proposed Rule
The rule goes on the say:
“For the purposes of this regulation, we note that ALS (assisted
living settings) for persons who are older, with regard to
disability, would not be excluded from home and community
based setting when the following conditions are met:
 Individual has a lease
 Setting is an apartment with individual living, sleeping,
bathing and cooking areas, and individuals can choose
whether to share a living arrangement and with whom.
 Individuals have lockable access to and egress from their
own apartments.
 Individuals are free to receive visitors and leave the
setting at times and for durations of their own choosing.
CMS Proposed Rule
Cont.:
 Aging in place….must be a common practice in the ALS
setting.
 Leases may not reserve the right to assign apartments or
change apartment assignments.
 Access to the greater community is easily facilitated based
on the individual’s needs and preferences.
 An individual’s compliance with their person-centered
plan is not in and of itself a condition of the lease.
Medicaid and Assisted Living
• Rates often inadequate.
• Payment for AL Incomplete (housing, food,
utilities not covered; SSI check insufficient to
fill gap.)
• Many recent federal initiatives, regulations
tend to exclude AL.
• NCAL study of state Medicaid rates, payment
issues released in late 2009.
NCAL Medicaid Payment & Policy Study
“State Reimbursement Policies and Practices in
Assisted Living”
Available at www.ncal.org.
Study sponsored by NCAL and done by Robert Mollica,
independent health policy researcher, formerly on staff of National
Academy for State Health Policy.
Methodology:
Updates Residential Care and Assisted Living Compendium: 2007
prepared for ASPE, U.S. Dept. of HHS.
Source:
State web sites; Electronic survey; Telephone calls with staff
responsible for HCBS programs.
Data collected March – June 2009.
NCAL Medicaid Payment & Policy Study
Key Findings:
• AL Medicaid coverage was growing again (up 9%
between ’07 and ’09) after drop between ’04 and ’07 –
to about 131,000 nationally at time of the study.
– Medicaid covers about 13% of AL residents nationally
(compared to about 63% of NH residents).
• 37 states use 1915(c) HCBS waivers; 13 provide
coverage directly under state Medicaid state plan; 4
include it 1115 demonstration programs; and 6 use
state general revenues. States may use more than one
funding source.
NCAL Medicaid Payment & Policy Study
• Tiered rates the most common methodology for
reimbursing assisted living providers (19 states). Flat
rates are used in 17 state.
• 23 states cap the amount that may be charged for
room and board.
• 24 states supplement the beneficiary’s federal
Supplemental Security Income (SSI) payment of
$674, which states typically use as the basis for room
and board payment. SSI combined with state
supplements ranges from $722 to $1,350 a month
depending on the state. Some states provide no
supplement.
NCAL Medicaid Payment & Policy Study
• 25 states permit family members or third parties to supplement
room and board charges.
• 23 states require apartment style units; 40 allow units to be
shared; and 24 require residents to be able to choose who they
will share with.
• Screening for mental health needs is performed by case
managers and assisted living community staff in 9 states; by
case managers only, in 10 states; and by assisted living staff
only, in 9 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 3 states.
NCAL Medicaid Payment & Policy Study
A Few Examples of Rates for Medicaid Services:
• TN rate capped at $1,100/month: or maximum of
$13,200 annually (plus $674/month SSI for room and
board or $8,088 annually). So maximum of $13,200
for services plus $8,088 from SSI = $21,288 annually
total including room and board.
• Flat rates range from about $35/day (GA)…: or
$12,775 annually for services plus $8,088 SSI = $20,863
annually total including room and board.
…Up to $70/day (UT): or $25,550 annually for
services.
NCAL Medicaid Payment & Policy Study
Examples of Tiered rates:
• OR has 5 payment levels ranging from $1,002 to
$2,355 a month. State limits monthly room and board
payment to $523.70.
• OH has 3 tiers ranging from about $50/day to $70/day.
Room and board is capped at $624 a month.
• VT: Rates range from $36/day to $103/day plus $674
per month for room and board.
NCAL Medicaid Payment & Policy Study
Trends: The shift to HCB settings
• Medicaid nursing facility census: 896,495 in Dec. 2008:
– 8.3% less than Dec. 2001.
• Number of assisted living residents receiving Medicaid LTC
services: 131,000 in 2009:
– 43.7% more than in 2002.
• Medicaid spending for NH care is still much greater, but
spending for HCB care is growing much faster:
– From FY 2001–2007, Medicaid spending for HCB care rose 81.5%
while spending for NH care rose 9.8%.
– In FY 2007, $16.7 billion spent on HCB care v. $46.9 billion for NH
care.
LTC Housing Supply:
Beds Per 1,000 People 65 and Older
Licensed
AL/RC
NFs
U.S.
25.7
44.1
Oregon
45.3
25.5
Nebraska
42.5
67.4
Georgia
28.1
42.6
Arkansas
12.6
61.6
Source: “State Medicaid Reimbursement Policies and Practices in Assisted Living,” Robert
Mollica, National Center for Assisted Living/AHCA, September 2009. Available at
www.ncal.org.
HCBS as a Percentage of Medicaid Long
Term Care Spending
Percent
HCBS
U.S.
31%
Oregon
57%
Nebraska
22.3%
Georgia
24%
Alabama
13%
Source: “State Medicaid Reimbursement Policies and Practices in Assisted Living,” Robert
Mollica, National Center for Assisted Living/AHCA, September 2009. Available at
www.ncal.org.
Key questions
• How will federal Medicaid rules define
community settings?
• Will state fiscal crisis limit AL rates?
− If so, are ALFs likely to drop out?
• Will AL contribute to further decline in NF
use?
• If Congress contemplates further stimulus of
HCB care, what role will AL play?
• Should federal housing subsidies be
considered?
New Health Care Reform Law: Provisions
Impacting Assisted Living
• Medicare Part D
• Criminal Background Checks
• Mandatory Reporting of Crimes
• CLASS Act
• HCB Incentives
• Individual Mandates
• Employer Mandates
Medicare Part D co-pay fix
• Medicare Part D Co-Pay Legislation (Sec. 3309 of the
Affordable Care Act)
− Will eliminate Part D co-pays for dual eligibles in home
and community based settings covered under a Medicaid
waiver – includes at least 60% of assisted living dual
eligible population.
− CMS has confirmed January 2012 as implementation date
in final rule.
• NCAL will seek a legislative fix for the remaining
dual eligibles covered by state plans (the “nonwaiver” population), if necessary.
Legal Changes
• Criminal Background Check Funding
• Reporting Crimes Occurring in Federally
Funded LTC Facilities to Law Enforcement
 Requires reporting any reasonable suspicion of a crime
resulting in “serious bodily injury” to a resident or individual
receiving care, within two hours to the Secretary and at least
one local law enforcement entity.
 Reporting required by owner, operator, employee, manager,
agent or contractor of LTC facility that receives at least $10,000
in annual federal funding.
 Failure to report crime can result in fine up to $200,000 and
exclusion from participation in federal health care programs.
Impact of Coverage Expansion/Employer
Mandate Provisions: Overview
By 2019, PPACA estimated to reduce number of
U.S. medically uninsured by 32 million through a
complex combination of new mandates, fines,
programs, and financial incentives.
 Changes being implemented in 2010 and 2011 have
modest cost consequences for employers.
 Changes in 2014 may have significant financial
impact on many LTC providers.
For more information, see policy analysis and other resources on
AHCA/NCAL Health Care Reform Web site:
http://www.ahcancal.org/advocacy/Pages/HealthCareReform.aspx
Changes in 2010
In 2010,
Insurance and group health plan reforms:
 Prohibiting lifetime coverage limits, restrictive annual
limits, coverage recissions, cost sharing for certain
preventive and wellness benefits,
 Limiting coverage waiting periods,
 Requiring plans offering dependent coverage to cover
young adults up to age 26.
 Establishing rules for “grandfathering” of plans.
Waivers granted for “mini med plans” otherwise violating
annual limit restrictions.
Small employer tax credits.
Temporary high risk pools.
Temporary reinsurance subsidizing retiree health plans.
Changes in 2011
In 2011,
 Dept. of Treasury Request for Comment on defining fulltime employees & identifying challenges employers will face
in meeting new coverage requirements.
 HHS announces end to mini-med waivers: Applications for
new waivers or extensions of current waivers must be
submitted by September 22, 2011.
 First installment of Health Insurance Exchange rules.
 W-2 Reporting: employers will be required to report value of
employee’s health benefits (postponed until 2012).
Changes in 2014
Major changes occur in 2014:
Policy “sticks”:
 Individuals will have to be insured, or pay fines.
 Employers with at least 50 full-time employees will have to
meet requirements for offering health benefits, or pay fines.
- including new standards for benefit levels, eligibility
waiting periods, employee affordability (no more than
9.5% of family income).
 Employers with >200 employees offering coverage must
automatically enroll employees in plan (employees can opt out).
 Also, employers will face new information disclosure and
reporting requirements.
Program Expansions, Subsidies,
& Positive Impacts
Policy “carrots”:
 Medicaid expansion: adults covered up to 133% of FPL.
 New health insurance “exchanges” offering individual
insurance policies with federal subsidies for people with
incomes between 133% and 400% of FPL.
 Ability for small employers to buy insurance through
exchanges.
Positive impacts of law include:
 Greater access to coverage and health care for some middleand low-wage employees, for workers in firms not offering
coverage or offering plans with limited benefits, and for
people outside the workforce.
 Greater ability to change jobs (less “job lock”).
Concerns
Potential Concerns for LTC Providers:
 Mandates could cause major labor cost increase (due to
higher benefit costs, more employees taking up
coverage if an employer complies with new standards –
or the employer having to pay fines).
 Unintended consequences as employers and
individuals react to complex new rules and marketplace
developments.
 Lack of predictability/ability to plan, as the law leaves
many unanswered questions.
LTC Providers Most at Risk
LTC providers most at risk for financial impact
include:
 Those with high percentage of low-wage workers.
 Small firms not able to self-insure.
 Those offering limited health benefits or not
offering coverage to some full-time workers.
 Those with low margins (e.g., NH margins have
averaged about 2%-2.5% recently).
 Those reliant on government reimbursement (they
cannot unilaterally raise prices if their labor costs
suddenly go up).
The Class Program
Affordable Care Act establishes the new
“Class” (Community Living Assistance
Services and Supports) program.
• “Class” will be an insurance program run by the
federal government providing a cash benefit after
5 years of vesting.
• Can be used to pay for assisted living.
• Issues: Benefits limited; premiums may be high;
lingering questions about whether program is
actuarially sound. HHS pursuing changes.
Medicaid Home and Community-based
Services (HCBS) Expansions
The ACA provides enhanced federal matching
funds for Medicaid HCBS expansions in
several provisions including:
• The Balancing Incentive Program, which offers an FMAP
increase to states that expand nursing home diversions
and access to HCBS.
• Money Follows the Person grant program extended to 2016.
• Community First Choice Option, allowing states to offer
attendant care and related supports, providing
opportunities for self-direction.
• Definition of home and community-based settings is a big issue for
assisted living.
AHRQ’s Consumer Disclosure Initiative
• In July 2008, AHRQ launched the Assisted Living
Disclosure Collaborative. This 18-month project
resulted in a survey tool that will allow consumers to
compare and select assisted living communities.
• Final model tool was completed in December 2009
and was pilot tested in 2010 in Phase II.
• More wide scale testing in 2011 in 8 states.
• Phase III work should begin in 2011 and focus on the
consumer piece of the this initiative.
• NCAL continues to actively participate in this AHRQ
initiative.
New ALF Design Guidelines Being Drafted
• Healthcare Guidelines Institute (HGI) is
developing a separate set of guidelines for
residential care and assisted living.
• Authority for creating the guidelines was
transferred from AIA to the newly created HGI.
• First meetings will be in Spring 2011.
• These guidelines will likely be used by state
licensing agencies.
• U of MN is conducting a study of existing state
architectural and physical plant requirements.
Federal Agencies with Initiatives Impacting
Assisted Living
• Centers for Medicare & Medicaid Services (CMS)
 Defining HCB Settings
• HHS Office of Inspector General (OIG)
 State Oversight of Waiver Providers
 Examining AL Providers’ Use of Home Health
• Environmental Protection Agency (EPA)
 Disposal of Unused Drugs
 Energy Use and Energy Star Programs – Energy Star
for LTC buildings started March 21!!!
• National Labor Relations Board (NLRB)
Looking Ahead
The assisted living industry has weathered the
recession fairly well. Many challenges lie
ahead, including:
•Increasing resident acuity.
•More government oversight and pressure to
cut government payments.
 Medicaid payment cuts.
 Making sure AL is included in Medicaid.
 Changes in hospital discharge planning as Accountable
Care Organizations/payment bundling take hold.
Looking Ahead
• Impacts of Health Care Reform
• HIT / electronic health records
• Workforce
• Attracting and retaining qualified workers.
• Training.
• Making Sure that Assisted Living Stays
Consumer-Driven, Focused on Providing
What Residents Want and Need.
National Assisted Living Week
September 11 – 17, 2011
Contact Shane Osborne at
sosborne@ncal.org for an
electronic version of this
year’s logo.
The Planning Guide and Product
Catalog will be available in June!
Visit www.nalw.org for more information.