The ALF Explosion
The ALF Explosion
Stephen R. La Pierre
Senior Vice President
Claim/Case Management & Policyholder Services
Penn Treaty Network America
slapierre@penntreaty.com
For a copy of my letter to the Editor, email:
slapierre@penntreaty.com
Facility Providers . . .
Industry Claims Advisory Work Group Focus
Evolving Facility Provider Industry

Use of nursing homes changing
Still primarily long term
in discharge rates

Explosion in Assisted Living Facility growth
Number
Variety
Challenge for claim staff/ Tools for Adjudication
The Basics
Nursing Homes
vs.
Assisted Living Facilities
Nursing Homes a/k/a
NF
Nursing Facility
SNF Skilled Nursing Facility
SCF Skilled Care Facility
SLTCF Skilled Long Term Care Facility
SNRC Skilled Nursing & Rehabilitation Cente
ICF
Intermediate Care Facility
CCC Convalescent Care Center
Assisted Living Facility a/k/a
ALF
RCF
CBRF
CCRC
PCF
AFH
Assisted Living Facility
Residential Care Facility
Community Based Residential Car
Continuing Care Retirement Comm
Personal Care Home
Adult Foster Home
•C O N F U S I N G
Assisted Living Facilities
“Any attempt to understand assisted living
and its role in providing long-term care to
the frail elderly is hindered by the lack of a
common definition of „assisted living‟.”
U.S. Department of Health and Human Services
A National Study of Assisted Living for the Frail Elderly: Final Summary Report
Catherine Hawes, Ph.D. and Charles D. Phillips, Ph.D., M.P.H.
Texas A&M University System Health Science Center
Miriam Rose, M.Ed.
Myers Research Institute
November 2000
Nursing Homes
Federal/State regulations
High medical orientation
MD order for admission
Medical records required
Frequency of MD review mandated
Quarterly care plan conferences mandated
24 hour licensed staff required
Stringent staffing requirements
Full range of therapy services
Little question about personal/provider eligibility
Assisted Living Facilities
Less medically oriented
Lightly regulated
Staffing requirements less stringent


24 hour staff “that is awake”
Staff continuing education not mandated
Functional range from very independent to
occasional assist with ADLs
Eligibility is a moving target
Nursing Home - Past
Only alternative
Long term placement
Low discharge rate
Family guilt/ reluctant to admit
Negative stigma
Assisted Living Facilities - Past
Evolved from Board & Care homes
Looked like a nicely decorated Nursing Home
Emergency call systems in all rooms
Recreational and social programming
Three meals per day – special diets
Did not serve high acuity


Nurse supervision on at least 2 of 3 shifts
Nursing assistant
Call lights
Occasional ADL assistance
Dining assistance
Many ALFs would discharge clients who became
cognitively impaired, incontinent or required constant
ADL assistance
Nursing Homes - Today
Primarily long term stay
Increase in discharge rates


Medicare
Hospital transitional care
Remain Highly regulated
Stagnant facility growth
1995
1999
2004
2007
16,700 homes
18,000 homes
16,100 homes
<16,000
ALF Explosion
40000
36000
30000
20000
18000
11500
10000 6000
Number of ALFs
0
1990
2000
2007
Years Measured
Assisted Living Facilities Today
36,000 strong
Broadening target market/continuum

ILF, ALF, Cognitive Unit
Hotel / Resort-like marketing
More palatable option for kids/parents
Blurring the line between Independent &
Assisted living
Assisted Living Facilities - Today
Measured by Service & Privacy
High Service
Low Service
1 FT RN on staff
Nursing care by facility
24 hr supervision
Housekeeping
2 meals/day
Personal Care w/Meds,
bathing, dressing
Plus low service list
High Privacy
>80% private rooms
[Large growth today]
11%
18%
12%
59%
Low Privacy
<80% private rooms
1998 study – first ever empirical nationwide data
What does this all mean to LTCi
claim operations?
The Challenge:
Determining Provider Eligibility
Changing Utilization Patterns
Provider Eligibility Challenge
Older policy language


Detailed & specific?
Not detailed & specific
Do your policies specifically exclude ALFs?
Do ALFs qualify as NHs under your policies?



Licensure
Staffing [levels/inhouse/contracted]
Services/records
Is the facility standalone/distinct part
/shared area?
Utilization Pattern Challenge
ALFs more attractive / palatable
Has it become easier for children to place their
parents in a facility earlier than in the past?
Is this placement for convenience or need?
People sell home and move in expecting to be
eligible
Non-eligible spouse moves in with eligible
spouse
Bundled charges [covered & non-covered]
Tools For Adjudication
Tools for Adjudication
Policy Language
Facility License
Facility Marketing Material/web-site
Facility Floor Plan
Resident Agreement
Telephone inquiry / Facility Assessment



Staffing[nurses/cna/unskilled]
Level of services [by staff or contracted]
Medical Director [on staff or contracted]
Let policy be your guide
Nursing Facility: A home, residence or institution, other than a hospital, which
is primarily engaged in providing nursing care and related services on an
inpatient basis under a license issued by the appropriate licensing agency. It
may be a freestanding facility including the following:
(a) Nursing Facility;
(b) Skilled nursing home;
(c) intermediate nursing care home;
(d) Assisted Living Care Facility;
(e) Residential Health Care Facility; or
(f) Alzheimer's care facility
Comprehensive definition . . .
An Assisted Living Facility will also be considered a Nursing Home and eligible for
the Policy’s full Nursing Home benefit if it is licensed by the appropriate federal or
state agency to engage primarily in providing care and unscheduled services to
resident inpatients and it:
1.)
provides twenty-four (24) hour a day care and services sufficient to
support needs resulting from inability to perform Activities of Daily Living and/or
Cognitive Impairment;
2.)
has a trained and ready to respond employee on duty at all times to
provide care and services;
3.)
provides three (3) meals a day and accommodates special dietary
needs; and
4.)
has the appropriate methods and procedures to provide necessary
assistance to residents in the management of prescribed medications.
An Assisted Living Facility may sometimes be called a Residential Care Facility or an
Adult Congregate Living Facility. Any facility, or section thereof, known by one of
these names, or any other name, will be considered eligible if it meets the Policy
definition of an Assisted Living Facility.
If a facility or institution (such as a congregate care facility or life care community) has
multiple licenses and/or multiple purposes, only the section, wing, ward or unit
(including a separate room or apartment) that specifically qualifies as a Nursing
Home or an Assisted Living Facility will be eligible for benefits.
Excludes ALFs
"Nursing Care Facility" means a facility that:
(a) is licensed or certified by the state to provide nursing care as its main function;
(b) provides continuous room and board for at least 3 people;
(c ) provides supervised care by an on-duty RN or LPN;
(d) maintains daily medical records; and
(e) maintains control and records of medications given.
A Nursing Care Facility does not include: (a) rest homes; (b) homes for the aged;
(c ) retirement homes; (d) community living centers; (e) Assisted Living Facilities;
(f) adult day care or educational care facilities;
(g) residential sections or wings of Nursing Care Facilities; or
(h) places used primarily for the care and treatment of alcoholism,
drug addiction or mental or nervous disorders.
Less definitive
"Nursing Care Facility" means a facility that:
(a) is licensed or certified by the state to provide nursing care as
its main function;
(b) provides continuous room and board for at least 3 people;
(c ) provides supervised care by an on-duty RN or LPN;
(d) maintains daily medical records; and
(e) maintains control and records for medication.
Covered / Non-covered ?
Look to the License
Marketing Materials
Brochures
Web-sites
Resident Agreements
But First!!!
Leg
Cheese
Tent
Motor
Flower
Stamp
Cup
King
Forest
Menu
Resident Agreement
Details on nature of charges


Covered
Non-covered
Description of level of services provided
Room Rate
$139/day
Level of Care
Fees
$10/day
Medication
Administration
Fees
Community Fee
Take out Paper and Pencil
Write down as many
of the 10 words as
you can remember
Don’t look at your neighbors paper!!
Leg
Cheese
Tent
Motor
Flower
Stamp
Cup
King
Forest
Menu
Facility Assessment
Staffing



Ratios
Credentials
Employed / Contracted
Programming


Recreational
Social
Levels of Care


Define levels available
Identify physical location/level
Contracted Services




Medical Director
Pharmacy/Pharmacist
Dietary
Therapy
Hybrid Scenarios
ILF- “pseudo-ALF” offering assistance through contracts with
HHA



ILF does not qualify as an ALF
Will ALF policy cover ?
Policyholders home is ILF?, will HHC policy pay for care?
Continuing Care Campus



Policyholder “buys in” at time of admission
Guaranteed services in SNF/ALF/HHC on campus
Question: How to calculate benefits at time of need?
ILF apartments dually licensed as ALF


Policyholder receives intermittent IADL/ADL assistance
What charges are eligible? R & B? Service only? All? Nothing?
Summary
ALF category is exploding
More attractive for retirement
Blurring the line of eligibility


Enter independent
Receive intermittent services
Use the tools of adjudication
Historic actuarial assumptions for
utilization
Consider this evolution in new product
development
Grand Prize
Question