Colorado Assisted Living Association (CALA)

In a study published January 5th, 2010 in Business Week Lifestyle

Senior Resident

it was reported that “Assisted living facilities for older people are most often located in areas with higher levels of income, education and home values”.
It goes on to say that “These findings aren’t surprising because private dollars have fueled the growth of assisted living facilities, write the researchers. However, the findings do mean that people with lower incomes, minorities and those living in rural areas have fewer living options as they age”.

However, what was not reported in Business Week, but was discussed deeper in the actual report published in the January 2010 issue of Health Affairs was the fact that:

“To date, states have been slow in expanding Medicaid coverage for services in assisted living facilities. Many states have small programs under which Medicaid pays for personal care and medical services in assisted living, but few assisted living residents receive these public supports” the report continues “Although there are important noncost considerations in expanding Medicaid-financed care in assisted living (such as strong consumer preference), any proposed expansion is accompanied by important fiscal caveats.” The report further states that; “ Assisted living has the potential to serve as a cost-effective substitute for higher-intensity nursing home care for some people. Yet policymakers are concerned about the moral hazard likely associated with offering people an array of long-term care services, especially attractive options such as assisted living. A key issue from a state budgetary perspective is whether assisted living coverage can be structured to increase substitution away from Medicaid-financed nursing home care while minimizing substitution away from unpaid care by family and friends.”

Operating an assisted living home is like any other business, if you can’t make enough income to pay the bills and the employees you can’t keep operating, no matter how good your intentions are.

Colorado is one of the states that fund assisted living services through its Medicaid wavier program. This is a great program for those who need but cannot afford assisted living services. However, recent state budget cuts and increased licensing fees may threaten that program. It has been my experience that there are more elders on or applying for Medicaid and looking for assisted living beds then there are quality beds available. I believe that this is a direct result in the facilities cutting back on the number of beds that they are allocating to Medicaid as a result of state funding cuts. It’s always a difficult choice when it comes to public funding for social services but I believe there are ways that this could be done without increasing the funding short fall. Some of those choices are not popular and none would happen over night.

First we need to tighten down on the financial qualifications of those applying for Medicaid. Protecting assets in a “trust” for anyone other than a spouse or dependant child should not be allowed. The Elder has worked hard and saved to provide for their retirement not for the benefit of their adult children. We also need to increase the penalties for those in a position of trust (including the adult children) that convert the elders funds to their own use. To many times we have seen elders that run out of funds to pay for their care and cannot qualify for Medicaid because the family has misappropriated funds. This form of financial abuse often goes unpunished.

We also need to look at the best use of the Medicaid funds. By lowering the reimbursement to assisted living facilities serves to redirect elders to more expensive (two to three times the cost) nursing homes. As reported in Health Affairs, “Assisted living has the potential to serve as a cost-effective substitute for higher-intensity nursing home care for some people”. I would add, for many lower income seniors.

September 1, 2009 Provider Reimbursement Changes

How many Assisted Living providers can handle ANOTHER 1.5% decrease?  The Medicaid rate started at $49.01/day this year, then decreased to $48.03 on July 1, 2009.  Now we have another 1.5% decrease which brings us down to $47.31.  That is a total decrease of $1.70 per day per bed and although it doesn’t sound like a lot, to many ALR owners, it’s HUGE!

Let’s just do some math… $1.70 X 365 days = $620.50.  Then multiply that by the number of Medicaid beds (and many have 80-100% medicaid).  So for a 20 bed facility, that is $12,410.00/year.  For a 60 bed, it is $37,230/year.

So what happens when rates are cut?  Owners have to cut corners somewhere.  Regulations don’t really allow for cuts in staffing.  Perhaps those 24 hour snack availability regs that came out recently could be cut?  Regulations are requiring more and more of owners… more staff, more training, more services. and yet the state continues to cut their pay.  Who suffers in the end?  The residents.  The residents who won’t be going to that extra outing, because  the budget won’t stretch.  The residents who won’t be getting those extra snacks or new paint in their rooms or new linens, or other things which will be cut out of the budget.

This is outrageous!  We need to stand together!  Many of the ALR owners in this state have dedicated their lives to helping people who are less fortunate by accepting Medicaid clients.  Many private pay ALR owners base their rates according to Medicaid reimbursements.  How many ALR’s will be forced to go out of business causing Medicaid clients to move or perhaps even become  homeless?

Call your legislators today!  If the government can bail out the banks and car manufacturers, surely they can afford to let ALR’s continue to survive, maybe even prosper a little so that residents can live better lives.