Joseph DeMattos Jr. headshot
Joseph DeMattos Jr.

It’s a fact that assisted living communities play a vital role in the country’s residential and healthcare infrastructures. They provide a unique mix of housing services, assistance with activities of daily living while allowing independence and social wellness for people as they age.

These communities provide a vital healthcare and residential safety net for more than 800,000 residents nationwide, helping people from all walks of life continue to live actively and independently with individual assistance as needed.

Sadly, it’s also a fact that assisted living communities are financially out of reach for many people and families in need.

Here in Maryland, the niche for assisted living communities is well-established. Still, we can do so much more.

For instance, we could create a special Medicaid reimbursement rate for assisted living communities. Doing so could help more people access care in the best setting for their needs.

Medicaid rates are lower for assisted living communities than nursing homes because, technically, they  are providing less intensive medical and nursing care. However, assisted living communities fill an important role in our healthcare sector.

For example, someone may be relatively healthy but experience dementia, which makes it challenging for them to live safely at home alone. Many times, they also may be economically poor and qualify for Medicaid but can’t afford market-based assisted living.

A special Medicaid rate could be developed that exclusively helps people access assisted living communities. This rate could help bridge the current gap that makes Medicaid rates for assisted living several thousand dollars less than average market rates for such care and about one-fourth to one-third of the Medicaid rate paid to the higher medical model in nursing homes.

Cost savings from decreased hospitalizations and delayed entry into nursing homes could help fund such a rate.

Also, an increase in total Medicaid dollars could support families in need of assisted living.

As we move beyond the pandemic and the US population continues to age, long-term care facilities are positioned to be a key part of the quality care solution. All too often, however, assisted living communities are financially out of reach for families.

Nationally, the average monthly cost of assisted living is $4,500 (or $54,000 annually), and the median length of stay is about 22 months. Meanwhile, more than 15 million (approximately one in three) older adults aged 65 or more years are economically insecure, with incomes below 200% of the federal poverty level.

Here again, assisted living communities are being underused, largely due to a lack of financial resources and support. Nationwide, only about 15% of total Medicaid dollars go to assisted living care. That needs to change.

This model, however, cannot reduce funding to nursing homes or other Medicaid providers. To be most successful, we need a range of providers delivering clinically appropriate and affordable person-centered care.

A pilot program?

In Maryland, we have a unique Total Cost of Care Contract with the federal government, so our state may be the ideal place to pilot a program that dedicates more Medicaid dollars to assisted living providers. In this pilot, nursing homes could provide more robust clinical support to assisted living communities that currently often operate with a lone delegating nurse and nursing assistants.

By piloting a program that increases Medicaid support to assisted living communities, we would also be expanding much-needed community-based long-term care options to meet the needs of working- and middle-class families. 

Although healthcare treatments have made incredible advances over the years, healthcare payment systems haven’t always followed course, sometimes with the effect that people are not being able to live in the best setting for their needs.

Maryland has a rich history of innovating in long-term care. Years before the Medicare Modernization Act, the state created a Medicaid add-on rate for people with HIV/AIDS or Hepatitis in nursing homes.

And decades before that, when our healthcare system had no answer for the treatment of infants with terminal conditions, a Medicaid rate was created to provide that care in a Baltimore nursing home. More recently, Maryland again found a solution in nursing homes when it comes to prolonged ventilator care. Today, nursing homes provide most of the ventilator care in the state to people who otherwise likely would receive it in a hospital at a much higher cost.

Regardless of the state, however, the bottom line is, our healthcare systems work the best, and people receive the best care, when they can easily access the appropriate environment relative to their needs. Today, assisted living providers are poised to do more if they have the resources to reach their full potential. Again, these investments should not (and need not) come at the expense of Medicaid rates to nursing homes and other providers.

Rather, we should keep working together. After all, there is enough room for quality assisted living providers of every size as long as we remain focused on quality and safety, funding and support, adequate and well-thought-out regulation, and better healthcare integration.

Joseph DeMattos Jr. is president and CEO of the Health Facilities Association of Maryland/Maryland Center for Assisted Living, a state affiliate of the American Health Care Association / National Center for Assisted Living.

The opinions expressed in each McKnight’s Senior Living guest column are those of the author and are not necessarily those of McKnight’s Senior Living.

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