TN 31 (06-09)

A. Introduction to Assisted Living Facilities (ALFs)

There has been significant growth in the number of ALFs in recent years. This number is expected to grow rapidly as our population ages. The term “assisted living” has different definitions in different states but generally can be described as a private residence or a residential facility that provides care for individuals who cannot or should not live alone, yet do not need the degree of care provided in nursing homes.

For Supplemental Security Income (SSI) purposes, an ALF is similar to a publicly operated community residence (POCR). The underlying concept of an ALF is that while the residents may need some assistance, they retain the ability to control their daily routine, including activities such as sleeping, eating, bathing, and leisure activities. By providing the care needed by these individuals, assisted living enables them to continue living outside of an institution. Because the residents are able to provide much of their own care, ALFs may be able to provide care at a lower cost than nursing homes.

B. Description of Assisted Living Facilities

An ALF shares the following characteristics with a POCR as defined in SI 00520.500B.1. An ALF:

• is residential (i.e., not an educational, vocational, medical, or penal institution); and

• is community based (i.e., located in a community where supportive and other services are provided); and

• provides services in addition to food and shelter. In addition to social services, ALFs may help with personal living activities, training in socialization and life skills, and providing occasional or incidental medical or remedial care. The services may be available either at the facility or through the programs and services available to those living in the community.

An ALF may differ from a POCR in one or more of the following ways. An ALF:

• may be privately operated; and

• may serve more than 16 residents; and

• may be part of a multi-purpose facility as defined in SI 00520.001B.10. For example, a facility may provide skilled nursing services in one section and assisted living services in another section. However, the operations must be clearly separate and be separately licensed,

An ALF shares some characteristics with a commercial apartment complex. An ALF:

• may be privately owned and operated;

• may have a tenant – landlord relationship; and

• provides private quarters for residents.

C. Factors to consider when making assisted living facility determinations

The following factors should be considered when determining whether an individual lives in a possible ALF.

1. Is the facility a medical treatment facility?

In order to determine whether a particular facility can be considered assisted living for SSI purposes, first determine whether it is a medical treatment facility.

• An ALF is not a medical treatment facility as defined in SI 00520.011B.1, and it is not licensed as such. The staff or outside providers may provide incidental medical care, such as assuring that residents take their medications timely, without affecting this determination.

• In a multi-purpose facility, residents who do not require skilled nursing or in-patient medical care may be in a separately administered part of the facility that is considered an ALF for SSI purposes.

• Usually the state agency that handles Medicaid determines whether the care provided by a facility meets their definition of assisted living, or whether the facility is providing in-patient medical care or skilled nursing services. The state agency makes this determination in order to establish the correct type of care and funding required by the individual.

NOTE: Under the law and regulations the $30 payment limit, Federal Living Arrangement Code (FLA/D), applies only when an individual lives in a medical treatment facility throughout a month and Medicaid pays a substantial part of the cost of care. FLA/D cannot apply if the facility is not a medical treatment facility. Incidental medical care in an ALF is not considered inpatient care. If the facility is an ALF, the individual will be in FLA/A (living in own household). For information about Federal Arrangement Codes, see “Federal Living Arrangement Codes (FLA)” SM 01301.525.

2. Who pays for the cost of care?

Funding is an important factor when making living arrangement determinations involving ALFs.

• The cost of care for assisted living may be covered privately through the individual’s own financial resources, such as private insurance, including long-term care insurance, or through financial support from family or a third party. Or the cost may be covered by public agencies or social service programs (e.g., Medicaid).

• When the funding comes from insurance, including long-term care insurance, the payments are considered medical and social services and are not income for SSI purposes. They are considered reimbursement of an expense even if payments are made directly to the individual to make the monthly payment. See Medical and Social Services, Related Cash, and In-Kind Items SI 00815.050.

• Generally, the individual uses his or her own funds to pay for the cost of food and shelter while in an ALF. When a third party, such as a family member pays for food and shelter in an ALF, determine if the payment constitutes in-kind support and maintenance (ISM). Payments by a state or local agency for food and shelter provided in an ALF do not result in ISM.

NOTE: If the facility is not a medical treatment facility, the $30 payment limit (FLA/D) does not apply, even when Medicaid funds pay more than 50 percent of the total cost of care.

3. How does assisted living affect married couples?

When two individuals who are married to each other reside together in an ALF, it is necessary to determine whether they are living in the same household in order to determine whether couple computation rules apply.

• Couple computation rules apply when two individuals are married and live in the same household. Couple computation rules do not apply when two married individuals do not live in the same household because they are residents of an institution.

• SI 00501.154B defines a household as common living quarters and facilities under domestic arrangements that create one economic unit. See “Determining When Couple Computation Rules Apply” SI 00501.154.

• ALFs provide residents with many of the same services provided by an institution as described in SI 00520.001B.3. However, the fact that these services are provided by an ALF is not sufficient to determine that the members of the couple are residents of an institution.

• ALFs are designed to provide supportive services that enable persons to live in a non-institutional setting and to maintain a degree of autonomy in their own households. Residence in an ALF is a strong indicator that the members of a couple live in a household setting and are not residents of an institution.

• Another factor that indicates that the members of the couple are living in a household and are not residents of an institution is if the couple has a rental agreement for private living quarters in the ALF.

• Another factor that indicates that the members of the couple are living in a household and are not residents of an institution is if the ALF residents utilize community-based services, e.g., medical, dental, recreational.

• If, based on the case facts, a married couple residing in an ALF is determined to be living in the same household, they are not considered residents of an institution and couple computation rules apply.

• If, based on the case facts, the members of a married couple are determined to be not in a household, and are determined to be residents of an institution as defined in SI 00520.001B.5., the couple would be considered as two individuals for purposes of determining SSI eligibility and benefits.

D. How do federally mandated and state administered programs affect assisted living facility determinations?

The following programs, created under federal law and administered by the states, were developed for the primary purpose of keeping disabled and elderly individuals out of institutions. Consequently, when the cost of care at a non-medical facility is provided through one of these programs, we may determine that the facility, or a section of a multi-purpose facility, is not a medical treatment facility and the $30 payment limit does not apply.

1. Program for All-Inclusive Care for the Elderly (PACE)

One of the most common state administered assisted living arrangements is the Program for All-Inclusive Care for the Elderly (PACE).

• The Balanced Budget Act of 1997 established the PACE model as a permanently recognized provider type under both the Medicare and Medicaid programs. PACE enables individuals to live at home or in an assisted living facility instead of a nursing home.

• The Medicare and Medicaid programs fund PACE. The Centers for Medicare and Medicaid Services (CMS) provide these funds to the state. The state provides a combination of federal and state funds to the local PACE organization to pay for the individual’s care.

• The PACE organization is a local, non-profit organization that uses these funds to pay providers for the care of individuals who participate. Participants must be at least 55 years old, live in the PACE service area, and be certified as “eligible for nursing home care” by the appropriate state agency.

  NOTE: The term “eligible for nursing home care” is a PACE term to clarify the “level of care” requirements. It is not inconsistent with an ALF determination. PACE participants are individuals who would need nursing home care without the help of PACE.

• PACE funding comes from both Medicare and Medicaid. Despite Medicaid involvement, and although PACE may pay more than 50% of the cost of care at the facility, the individual is determined to be in FLA/A, and the payments made by PACE are not counted as ISM.

• In some cases, the PACE participant is no longer able to live in the assisted living facility and will be placed in a medical treatment facility such as a nursing home. In these cases, the PACE organization may continue to pay the cost of care. However, if the Medicaid portion of the PACE funds for this individual is more than 50% of the cost of care, the participant will be in FLA/D.

• If the individual goes into a medical treatment facility, contact the facility, the local social service or Medicaid office, or the PACE organization to determine whether Medicaid funds are paying over 50% of the cost of the nursing home care.

2. Home and Community Based Services (HCBS)

Another widespread approach to funding assisted living comes from Medicaid waivers under the Home and Community Based Services (HCBS) program.

• Congress authorized HCBS waivers in 1981 under section 1915 (c) of the Social Security Act. This provision allows states to request waivers of certain Federal requirements in order to develop Medicaid-financed, community-based treatment alternatives to institutionalization.

• The waiver requirements are quite flexible and used by many states to pay for the care of residents of ALFs. Services provided under a waiver program can include homemakers and home heath aides, personal care services, adult day health, transportation, etc. Room and board are generally not covered under an HCBS waiver.

• The residents of a facility whose care is paid for under an HCBS waiver are FLA/A regardless of the percentage of their care being paid by Medicaid funds. The payments made by the state are not counted as ISM.

• To determine if an individual is covered under an HCBS waiver, contact the local social services or Medicaid office.

E. Criteria for making assisted living facility determinations

Because of the many variations used to provide housing for SSI recipients, the different state definitions for assisted living, and the different funding programs, we must consider each facility determination and each individual living arrangement determination separately. As needed, establish a precedent for the facility using the instructions in SI 00520.800. Use the following criteria as a guide to making the determination:

• Is it a medical treatment facility? For example, a nursing home provides skilled nursing care or custodial care and is considered a medical treatment facility. Residents are FLA/D if Medicaid is paying more than 50 percent of the cost of care. Contact the state or local social service office or the Medicaid agency to ascertain whether the facility is considered a medical treatment facility. If the facility is a medical treatment facility, it is not considered an ALF.

• Is it public or private? If it is a public institution, a resident cannot be eligible for SSI unless it is a medical treatment facility and Medicaid is paying over 50% of the cost of care. In these situations, the $30 payment limit (FLA/D) would apply. For additional information, see “Determination of Applicability of $30 Payment Limit” (SI 00520.011).

• Is it an educational, vocational, or penal institution? If the facility meets the definition of one of these institutions, it is not an ALF.

• Is it community based? An individual in assisted living typically has access to services in the community, e.g., doctor, dentist, recreation, shopping.

• Are services provided in addition to food and shelter? If needed, what specific services can a resident reasonably expect to receive? ALFs may provide a wide range of services such as personal care, homemaker, and chore services, transportation, and incidental medical care.

• Is the individual covered under the PACE program or an HCBS waiver? The administrator of the facility, the Medicaid office, or the PACE organization can provide this information. If the individual is covered under PACE or HCBS, this indicates he or she is in assisted living, and not in FLA/D.

• What is the source of funding for the care? The administrator of the facility, the state or local social services office, or the Medicaid agency can provide this information.

• Is the facility a multi-purpose facility as defined in SI 00520.001B.10? If so, is the individual receiving in-patient or skilled nursing services or only assisted living services?

When the facility determination is made, record an electronic precedent for the facility per SI 00520.800.

F. Examples of Assisted Living Facility Situations

Example 1: Evaluating a New Facility

Situation: A new private facility opens with the name Meadowland Senior Residence and the slogan “Dignified Assisted Living”. The CR ascertains that it offers individual apartments with some cooking facilities, also a central dining hall, and recreational facilities. It has a shuttle service that will take residents shopping, to medical visits, to the movies, etc. A registered nurse is on duty one day a week, gives some medical care, and makes referrals to a doctor when needed. The residents are funded by a variety of sources including private funds and Medicaid.

Determination: The Claims Representative (CR) determines that this facility is an ALF and not a medical treatment facility. Even though some medical treatment is available, it is not inpatient care. The definition of a Medical Treatment Facility in SI 00520.011B.1 is that it be licensed or otherwise approved to provide inpatient medical care. Based on a contact with the facility administrator, the CR confirms that the facility is not licensed to provide inpatient medical care. The CR records an electronic precedent for the facility per SI 00520.800 that the residents are FLA/A.

Example 2: Married Couple in ALF

Situation: John and Marie each have an apartment in the Friendly Neighbor facility, a private facility which SSA has determined to be an ALF. Both are receiving SSI benefits as FLA/A individuals. They form a relationship and decide to get married and move into one apartment.

Determination: The CR determines that they are living in the same household and are not “residents of an institution” as described in SI 00520.001B.5. Although the facility provides meals and services, John and Marie utilize services in the community such as doctors, dentists, and recreational activities. In addition, they have a rental agreement with the facility for their private living quarters. Because they are living in the same household, couple computation rules apply and we begin paying them as a couple, not as two individuals. For more information about couple computation rules, see “Determining When Couple Computation Rules Apply” SI 00501.154.