OIG Report: Assisted Living Facilities need better compliance with federal regulations for HCBS

Assisted living facilities create an alternative to traditional nursing home-based long term care for people who require assistance but prefer to live independently. State Medicaid programs have been trying to reduce spending on long term care facilities by providing access to Home and Community Based Services (HCBS) over the past few years.

In its December 2012 Report, “Home and Community-based Services in Assisted Living Facilities,” the Office of the Inspector General (OIG) took a deeper look into the Centers for Medicare & Medicaid Services (CMS) waivers that allow coverage of HCBS by State Medicaid Programs. The waivers examined in this report include 1915 (c) and Section 115 research and demonstration. HCBS services, according to 42 CFR § 440.180(b), can include case management and homemaker services, personal care services, home health aide services as well as other services that are meant to aid in keeping people from being moved to a more traditional long term care setting.

The OIG selected the top seven states with the most beneficiaries receiving HCBS services in assisted living facilities – Georgia, Illinois, Minnesota, New Jersey, Oregon, Texas and Washington for its sample.

One key finding: “The average annual cost to furnish these services to beneficiaries residing in ALFs is approximately $31,000 per beneficiary, compared to $17,000 per beneficiary when the services are furnished in other settings.” 

This study also found that while each State had federally mandated provider standards, the ALFs did not always comply with them. In fact, 77% of the assisted living facility residents that received HCBS via a waiver were living in an ALF where one deficiency or more had been cited. The types of citations in these facilities include:

• Failing to furnish services outlined in residents’ plans of care
• Failing to dispense or administer medication as prescribed by a physician
• Failing to complete initial assessments of residents
• Lacking a current plan of care for at least one resident
• Failing to ensure that staff had the required education and training prior to furnishing services to residents
• Failing to ensure that medication was administered by appropriately qualified staff

Although assisted living facilities are not defined by the Federal health care law and regulations, ALFs are subject to a State agency inspection even if they do not have Medicaid beneficiaries in residence. CMS is ultimately responsible for ensuring that each State Medicaid program is compliant with the clearly outlined Federal requirements for coverage of HCBS under the 1915 (c) waiver.

In its recommendations, the OIG recommended that CMS provide stronger guidance on the compliance requirements for these waivers. CMS responded that technical assistance on a state-by-state basis could be provided to help each State to better understand the requirements. This review was to be completed by December 2012, so assisted living facilities should review the waiver requirements thoroughly for their relevant state to ensure they are compliant.

To read the full report, please visit the OIG website.