Medicaid Mechanisms and State Licensure: Pathways to Payment in Assisted Living

To document and highlight the variation in the types of assisted living (AL) licensed settings eligible for Medicaid home and community-based services (HCBS) payment.

Observational descriptive study.

We examined 32,991 licensed AL communities across all 50 states and the District of Columbia, representing 215 unique license combinations operating in 2019. We analyzed 6 Medicaid mechanisms: 1915(b), 1915(c), and 1115 waivers, and 1905(a), 1915(i), and 1915(k) state plan amendments.

We empirically reviewed the waivers and state plans active in 2019 providing Medicaid-paid care and documented any eligible AL licenses. We compared the characteristics of eligible and ineligible AL licenses, including geography, number of AL communities represented, and AL capacity.

Overall, 89% of AL communities operated under a license type that is eligible for Medicaid payment through a waiver, state plan amendment, or other contracting mechanism. Forty-five states and DC employed a mechanism to reimburse care in AL with Medicaid payments, most having a 1915(c) waiver; 13 states that authorized Medicaid-reimbursed care in AL limited this benefit to a subset of licenses. AL communities operating under a license type that granted Medicaid contract eligibility had a smaller average capacity than those operating under licenses that did not allow for Medicaid payment.

This paper builds on previous research that found associations between the percentage and concentration of dually enrolled residents in AL and state-level Medicaid payment mechanisms. We found that although most AL communities are eligible to accept Medicaid payment, the proportion of eligible ALs differs across states. Our research suggests that Medicaid policy may affect the accessibility of AL not only at the state level but also based on the type of license, which determines the type of care and services an AL can provide.