See the on-line article published in the National Association of Social Workers California newsletter (December 2014)

A Shaky Foundation: Design flaws with the assisted living waiver create an unstable base for SNF diversion/transition to RCFE programs in the future.

By Jason Bloome

California Coordinated Care (CCI) HMOs will play a big role in long-term support and services (LTSS) rebalancing in the future for dual-eligibles who choose to receive their care in community based care settings vs. skilled nursing facilities (SNFs). The goal of CCI is to realign Medicare and Medi-Cal services, provide high quality, person centered and cost effective care to eligible beneficiaries in the settings of their choice.

After January 2016, California will switch CCI from four capitated rates to a single, blended capitated rate providing fiscal incentives for CCI HMOs to promote SNF diversion/transition whenever possible. Many dual-eligibles, if given the choice, will choose to receive their long-term care in residential care facilities for the elderly (RCFEs) rather than SNFs. Candidates will include those who cannot receive sufficient care at home (e.g., need too many IHSS hours, require 24-hour supervision, have no family support at home, could “wander,” etc.) who have custodial care needs (e.g., require help with dressing, bathing, are non-ambulatory, are incontinent, have dementia, etc.).

CCI HMOs are free to design and implement innovative SNF diversion/transition to RCFE programs and are not dependent on the Assisted Living Waiver (ALW) program administered by the Department of Health.

Design flaws have troubled ALW since its inception in 2006: Very few RCFEs participate with the program, there are long waitlists and 90% of program participants receive their care in large 100-plus bed RCFEs that frequently have one direct care staff caring for 15 to 30 residents. Although small 4 to 6 bed RCFEs with one direct care staff for every 3 residents are ideal for patients with high level care needs, the ALW was not designed with these settings in mind and very few participate with the program.

A fresh approach, unencumbered by ALW liabilities, involves adopting the best practices used in other states considered LTSS rebalancing pioneers.

Offering SNF transition as soon as possible to candidates at risk of institutionalization saves valuable Medicare and Medi-Cal dollars and reduces patient bounce back from home to the hospital and SNF. ALW requires patients be in a SNF for at least 90 day stay and be on LTSS Medi-Cal to qualify for SNF transition but other states do not require such long SNF stays. Washington has care coordinators visit within 7 days patients admitted to SNFs to determine the possibility for SNF transition. Virginia requires only a 20 day SNF stay.

SNF diversion/transition to RCFEs requires a sufficient provider base to accept incoming patients who choose to receive care in those settings. Due to onerous guidelines and insufficient reimbursement rates most RCFEs do not want to participate with ALW in the counties where it operates.

By county:

ALW providers/Total RCFEs:
Los Angeles: 78/1,340
San Bernardino: 12/236
Riverside: 11/466
Fresno: 11/102
San Diego: 12/641
Alameda: 3/331
Sacramento: 29/547
San Joaquin: 17/86
Sonoma: 1/167

Limited providers result in long ALW waitlists, limited options for SNF transition candidates and a poor LTSS rebalancing record for California. Our state is ranked 46 in the nation for waivers for older people and/or people with disabilities and 32 in the nation for SNF transition programs with only 1,562 SNF transitions, of which only 370 have been elderly. Texas, in comparison, has had more than 30,000 SNF transitions since 2000.

CCI HMOs should consider the merits of paying for shared vs. private rooms and the effect on the marketplace when designing their SNF diversion/transition to RCFE programs for a large number of future participants. ALW requires providers give private rooms (unless the ALW participant requests to share a room) but at least 14 states nationwide do not mandate private rooms.

LTSS Medi-Cal funding for shared rooms instead of private would avoid the complications of low-income residents receiving better accommodations than private paid residents residing in the same setting who can only afford shared rooms and avoid the “woodwork” effect when families who currently help pay for shared rooms can “upgrade” their relatives to private rooms once they participate with SNF diversion/transition.

In North Carolina, where Medicaid pays for more than 22,000 residents to reside in assisted living settings, private rooms are not required. North Carolina is one of many states that allows a family to supplement an assisted living waiver participant’s social security supplemental income (SSI)) to provide the extra funding to cover a private room. Twenty five states currently allow SSI supplementation; California is not among them, a public policy issue which at some point the state should address.

A building cannot rise without a solid framework and a sensible design.  Flaws with ALW ensure a cracked foundation and an unsteady base upon which to build a robust SNF diversion/transition to RCFE program. A sound structure that will support the many thousands of dual-eligibles who one day will choose to receive their care in community base care settings requires a fresh approach and adopting the best practices used by other states considered LTSS rebalancing pioneers. The best architects rely on the accumulated wisdom of others when building gleaming towers that touch the sky.

Jason Bloome is the owner of Connections. For more information, please call (800) 330-5993 or visit He can also be reached at

Kaiser Foundation. Medicaid and the Uninsured: Long-Term Services and Supports in the Financial Alignment Demonstrations for Dual Eligible Beneficiaries November 2013 Issue Brief, Page 12:

California Health Care Foundation: 2013-Quick Start Guide: Residential Care Facilities for the Elderly (RCFEs): and Department of Health Services ALW providers:

As of December 2013, Page 57 of Mathematica, MFP Summary December 2013:

For the Money Follows the Person and other SNF transition programs in Texas according to Laura Gold, Texas, Assistant MFP Director.

Mollica, Robert, State Medicaid Policies in Reimbursement Policies and Practices in Assisted Living:

National Law Center, Medicaid Payment for Assisted Living, State Supplementation for SSI recipients: