MEDICAID 

ASSISTED LIVING 

SERVICES

Improved Federal 

Oversight of 

Beneficiary Health 

and Welfare Is 

Needed

Report to Congressional Requesters

January 2018

GAO-18-179

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-18-179, a report to 

congressional requesters

January 2018

MEDICAID ASSISTED LIVING SERVICES

Improved Federal Oversight of Beneficiary Health and 

Welfare Is Needed

What GAO Found

State Medicaid agencies in 48 states that covered assisted living services 

reported spending more than $10 billion (federal and state) on assisted living 

services in 2014. These 48 states reported covering these services for more than

330,000 beneficiaries through more than 130 different programs. Most programs 

were operated under Medicaid waivers that allow states to target certain 

populations, limit enrollment, or restrict services to certain geographic areas.

With respect to oversight of their largest assisted living programs, state Medicaid 

agencies reported varied approaches to overseeing beneficiary health and 

welfare, particularly in how they monitored critical incidents involving 

beneficiaries receiving assisted living services. State Medicaid agencies are 

required to protect beneficiary health and welfare and operate systems to 

monitor for critical incidents—cases of potential or actual harm to beneficiaries 

such as abuse, neglect, or exploitation.

• Twenty-six state Medicaid agencies could not report to GAO the number of 

critical incidents that occurred in assisted living facilities, citing reasons

including the inability to track incidents by provider type (9 states), lack of a 

system to collect critical incidents (9 states), and lack of a system that could 

identify Medicaid beneficiaries (5 states).

• State Medicaid agencies varied in what types of critical incidents they 

monitored. All states identified physical, emotional, or sexual abuse as a

critical incident. A number of states did not identify other incidents that may 

indicate potential harm or neglect such as medication errors (7 states) and

unexplained death (3 states). 

• State Medicaid agencies varied in whether they made information on critical 

incidents and other key information available to the public. Thirty-four states 

made critical incident information available to the public by phone, website, 

or in person, while another 14 states did not have such information available 

at all. 

Oversight of state monitoring of assisted living services by the Centers for 

Medicare & Medicaid Services (CMS), an agency within the Department of 

Health and Human Services (HHS), is limited by gaps in state reporting. States 

are required to annually report to CMS information on deficiencies affecting 

beneficiary health and welfare for the most common program used to provide 

assisted living services. However, states have latitude in what they consider a 

deficiency. States also must describe their systems for monitoring critical 

incidents, but CMS does not require states to annually report data from their 

systems. Under federal internal control standards, agencies should have 

processes to identify information needed to achieve objectives and address risk. 

Without clear guidance on reportable deficiencies and no requirement to report 

critical incidents, CMS may be unaware of problems. For example, CMS found, 

after an in-depth review in one selected state seeking to renew its program, that 

the state lacked an effective system for assuring beneficiary health and welfare, 

including reporting insufficient information on the number of unexpected or 

suspicious beneficiary deaths. The state had not reported any deficiencies in 

annual reports submitted to CMS in 5 prior years.

View GAO-18-179. For more information, 

contact Katherine Iritani at (202) 512-7114 or 

iritanik@gao.gov.

Why GAO Did This Study

The number of individuals receiving 

long term care services from Medicaid

in community residential settings is 

expected to grow. These settings, 

which include assisted living facilities,

provide a range of services that allow 

aged and disabled beneficiaries, who 

might otherwise require nursing home 

care, to remain in the community. 

State Medicaid programs and CMS,

the federal agency responsible for 

overseeing the state programs, share

responsibility for ensuring that 

beneficiaries’ health and welfare is 

protected. GAO was asked to examine 

state and federal oversight of assisted 

living services in Medicaid. This report 

(1) describes state spending on and 

coverage of these services, (2) 

describes how state Medicaid agencies

oversee the health and welfare of 

beneficiaries in these settings, and (3)

examines the extent that CMS 

oversees state Medicaid agency

monitoring of assisted living services.

GAO surveyed all state Medicaid 

agencies and interviewed officials in a 

nongeneralizeable sample of three 

states with varied oversight processes 

for their assisted living programs. GAO

reviewed regulations and guidance,

and interviewed CMS officials.

What GAO Recommends

GAO recommendations to CMS 

include clarifying state requirements 

for reporting program deficiencies 

and requiring annual reporting of 

critical incidents. HHS concurred with 

GAO’s recommendations to clarify 

deficiency reporting and stated that it 

would consider annual reporting 

requirements for critical incidents 

after completing an ongoing review.
Page i GAO-18-179 Medicaid Assisted Living Services

Letter 1

Background 6

States Reported Spending $10 Billion on More than 130 Programs 

Covering Assisted Living Services in 2014 10

State Approaches for Overseeing Health and Welfare of 

Beneficiaries in Assisted Living Services Varied, Including 

Monitoring Incidents of Beneficiary Harm 17

CMS Has Taken Steps to Improve Oversight of the Health and 

Welfare of Medicaid Beneficiaries in Assisted Living and Other 

Community Settings, but Gaps Remain 27

Conclusions 33

Recommendations for Executive Action 34

Agency Comments and Our Evaluation 34

Appendix I State Reported Enrollment and Spending 

on Assisted Living Services 36

Appendix II State Reported Home- and Community-Based Services 

(HCBS) Programs Covering Assisted Living Services 38

Appendix III Information Regarding Medicaid Beneficiaries’ 

Access to Assisted Living Services 40

Appendix IV Events That States Defined as Critical Incidents 42

Appendix V Comments from the Department of Health 

and Human Services 43

Appendix VI GAO Contact and Staff Acknowledgments 46

Contents
Page ii GAO-18-179 Medicaid Assisted Living Services

Tables

Table 1: Medicaid Spending and Enrollment for Beneficiaries 

Receiving Services Provided by Assisted Living Facilities,

as Reported by 48 States, 2014 11

Table 2: Types of Programs 48 States Reported Using to Cover 

Assisted Living Services and Number of Distinct Assisted 

Living Service Programs, 2014 14

Table 3: Information Sources Reviewed by State Medicaid 

Agencies and Other Administering Agencies as Reported 

by 48 States, 2014 20

Table 4: Types of State Oversight Actions Available for Assisted 

Living Facilities, Delegation of Actions Outside State 

Medicaid Agencies, and Notification Practices, as 

Reported by 48 States, 2014 22

Table 5: Information Publically Available about Assisted Living 

Facilities as Reported by 48 States, 2014 27

Table 6: CMS Requirements for States’ Home- and CommunityBased Waivers to Protect Beneficiary Health and Welfare, 

prior to and after March 2014 Guidance 28

Table 7: State Reported Enrollment, Total Spending, and per 

Beneficiary Spending for Medicaid Beneficiaries Who 

Received Services through Assisted Living Facilities, as 

Reported by 48 States, 2014 36

Table 8: State Reported Home- and Community-Based Programs 

Covering Assisted Living Services, by State and Authority, 

as Reported by 48 States, 2014 38

Table 9: Policies States Used to Assist Medicaid Beneficiaries 

with Assisted Living Facilities’ Room and Board Payments 

in 2014, as Reported by 48 states 41

Table 10: Events That States Defined as Critical Incidents 42

Figures

Figure 1: Average per Beneficiary Spending for Assisted Living 

Services by State in 2014 12

Figure 2: Medicaid Beneficiary Groups Receiving Assisted Living 

Services in One or More State Programs, as Reported by 

48 States, 2014 15

Figure 3: Types of Assisted Living Services Covered by One or 

More State Programs, as Reported by 48 States, 2014 16
Page iii GAO-18-179 Medicaid Assisted Living Services

Figure 4: Selected Incidents Defined as Critical for States’ Largest 

Medicaid Programs Providing Assisted Living Facility 

Services, as Reported by 48 States, 2014 25

Abbreviations

CMS Centers for Medicare & Medicaid Services

HCBS Home- and community-based services

HHS Department of Health and Human Services

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Page 1 GAO-18-179 Medicaid Assisted Living Services

441 G St. N.W.

Washington, DC 20548

January 5, 2018

The Honorable Susan M. Collins

Chairman

Special Committee on Aging

United States Senate

The Honorable Orrin Hatch

Chairman

Committee on Finance

United States Senate

The Honorable Claire McCaskill

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Elizabeth Warren

United States Senate

Medicaid, a federal-state program for low-income and medically needy 

individuals, is the nation’s primary payer of long-term care services for 

older adults and people with disabilities. Medicaid spending on long-term 

care is significant, representing about one quarter of Medicaid spending 

annually and is expected to grow with an aging population. In recent 

years, most states have expanded their Medicaid long-term care options 

to include more home and community-based services (HCBS), which may 

include services provided by assisted living facilities. Federal and state 

Medicaid spending on HCBS exceeds the amount spent on nursing home 

and other institutional care and, in 2015, totaled $87 billion.1

Assisted living facilities provide a residential alternative to nursing home 

care for individuals who prefer to live independently but need assistance 

to maintain their independence. They may provide residents with a variety 

of services to assist with activities of daily living, such as bathing and 

 1

HCBS expenditures grew from $81 billion in FY 2014 to $87 billion in FY 2015 (a seven 

percent increase), accounting for all the growth in expenditures in FY 2015 for long-term 

services. See Medicaid Expenditures for Long-Term Services and Supports in FY 2015.

Truven Health Analytics, Washington, D.C. April 14, 2017.

Letter
Page 2 GAO-18-179 Medicaid Assisted Living Services

dressing.2 Medicaid beneficiaries receiving assisted living services 

include older adults and individuals with physical, developmental, or 

intellectual disabilities, some of whom can be particularly vulnerable to 

abuse, neglect, and exploitation.

The federal government and states both have responsibilities for the 

health and welfare of beneficiaries receiving assisted living services and 

other types of HCBS covered by Medicaid. Under broad federal 

requirements, each state administers Medicaid under the oversight of the 

Centers for Medicare & Medicaid Services (CMS), an agency within the 

U.S. Department of Health and Human Services (HHS). States must 

obtain CMS approval to establish HCBS programs including those that 

cover assisted living services, and are then responsible for administering 

their approved programs, establishing policies and procedures to monitor 

the service providers, and safeguarding beneficiaries’ health and welfare. 

CMS has important oversight responsibilities to ensure states are 

effectively administering and monitoring Medicaid HCBS programs, 

including those that cover assisted living services. With approval from 

CMS, states can provide Medicaid HCBS under one or more Medicaid 

authorities, including several state plan and waiver authorities. States 

most frequently provide assisted living services under the HCBS waiver 

program, which allows states to target certain populations, limit 

enrollment, or restrict services to certain geographic areas.3

The demand for assisted living services is expected to increase as a 

result of the aging of the nation’s population, increased life expectancy, 

and increased opportunities to remain in the community for individuals 

with disabilities and older adults—those 65 and older, generally referred 

 2

Services that help beneficiaries with activities of daily living are common home and 

community based services and may be rendered by a variety of providers. For purposes 

of this report, when these services are provided by assisted living facilities, we refer to 

them as assisted living services.

3

HCBS waivers are authorized under Section 1915(c) of the Social Security Act. 

Section1915(c) authorizes the Secretary of Health and Human Services to waive 

otherwise applicable requirements that states offering HCBS offer the benefit statewide, 

offer comparable program benefits to all eligible beneficiaries, and use a single standard 

to determine income and resources for purposes of eligibility. For purposes of our report, 

we refer to programs authorized under Section 1915(c) as HCBS waiver programs. 

CMS has recently approved states’ increased use of managed care to provide long-term 

services, where states contract with managed care organizations to provide a specific set 

of covered services to beneficiaries in return for one fixed periodic payment per 

beneficiary—typically, per member per month. 
Page 3 GAO-18-179 Medicaid Assisted Living Services

to as aged individuals. Providing these services to individuals can be cost 

saving for the Medicaid program because the cost of nursing home care 

for an individual generally exceeds the cost of assisted living facility 

services.

Although the federal government has comprehensive information on 

nursing homes providing Medicaid services, not much is known about 

Medicaid beneficiaries in assisted living facilities. Current information on 

the amount spent by Medicaid on assisted living services and number of 

beneficiaries receiving services provided by assisted living facilities is not 

available.4

In light of the expected increase in demand for assisted living services, 

the vulnerability of some Medicaid beneficiaries receiving these services, 

and limited information on the varied state programs under which they are 

provided, you asked us for information on Medicaid coverage of assisted 

living services and state and federal oversight of the health and welfare of 

beneficiaries receiving these services. This report

1. describes state Medicaid programs covering assisted living services, 

including spending, beneficiaries served, and services covered;

2. describes how state Medicaid agencies oversee the health and 

welfare of beneficiaries receiving assisted living services in their 

largest programs; and

3. examines the extent to which CMS oversees state Medicaid agencies’ 

monitoring of the health and welfare of beneficiaries receiving 

assisted living services under HCBS waivers.

To describe state Medicaid programs providing assisted living services, 

we administered a survey to all states and the District of Columbia 

 4

In a 2012 report, 35 states reported to the Health and Human Services’ Office of 

Inspector General that HCBS waiver programs covered assisted living services for more 

than 54,000 beneficiaries at an annual cost of $1.7 billion in 2009. See U.S. Department of 

Health and Human Services, Office of Inspector General, Home and Community Based 

Services in Assisted Living Facilities, OEI-09-08-00360, December 2012. 
Page 4 GAO-18-179 Medicaid Assisted Living Services

(hereafter referred to as “states”).5 As part of this survey we asked states 

to report information for all of their programs that provided such services 

in 2014. Information requested included Medicaid spending for such 

services in 2014, enrollment, type of beneficiaries served, services 

provided, and federal authority used to cover the different assisted living 

programs.6 We conducted the survey from December 2016 through 

March 2017, and received a response from all states. We did not 

independently verify the information reported by the states in the survey, 

but reviewed responses and followed up with state officials when reported 

information appeared inconsistent or needed clarification. On that basis 

we believe the data are reliable for the purposes of our reporting 

objectives.

To describe how state Medicaid agencies oversee the health and welfare 

of beneficiaries receiving assisted living services, we relied on information 

obtained from our survey of states. Because a state may have multiple 

programs covering assisted living services within the state, and these 

programs may be overseen in different ways, we focused our work on 

examining states’ oversight of their largest programs. In particular, we 

asked each state to report 2014 information only for its largest HCBS 

program in terms of number of aged beneficiaries receiving services 

provided by assisted living facilities.7 These results cannot be generalized 

to all HCBS program types within a state or nationally. Assessing whether 

 5

According to the U.S. Department of Health and Human Services Assistant Secretary for 

Planning and Evaluation, states vary—sometimes considerably—in how they define 

assisted living with most states using the phrase assisted living as a licensing or 

certification category followed by different terms such as facility, residence, program, 

home, and community. For purposes of the survey, we defined assisted living facility 

broadly to include a state or locally regulated and monitored residential care setting that 

provides or coordinates services to meet residents’ individualized needs. Other terms 

which are used include residential care, adult homes, personal care homes, boarding 

homes, and homes for the aged, and other state-specific variations. Our definition did not 

include services provided in an individual’s home or family member’s home. 

6

For purposes of the survey, we asked states to report for 2014, the amount of total 

Medicaid spending for services provided by assisted living facilities. Home- and 

community-based services may be furnished by individual providers or by assisted living 

facilities. We asked states to include only instances where Medicaid paid the assisted 

living facility directly.

7

For purposes of this report, we refer to the program selected by each state as its “largest 

program.” We asked states to identify the program that enrolled the greatest number of 

older adults. However, the programs identified by states included other beneficiary 

populations, such as the physically disabled, intellectually disabled, and those with 

traumatic brain injuries. 
Page 5 GAO-18-179 Medicaid Assisted Living Services

states’ oversight activities were compliant with federal requirements was 

not within the scope of this review.

To examine the extent to which CMS oversees state Medicaid agencies’ 

monitoring of the health and welfare of Medicaid beneficiaries receiving 

assisted living services through HCBS waiver programs, we reviewed 

relevant federal laws, regulations, and guidance; reviewed key 

documents submitted by states to CMS regarding their HCBS waiver 

programs; and interviewed CMS officials. We reviewed HCBS waiver 

programs because they are the most common type of program states use 

to cover assisted living services. To obtain more detailed information on 

CMS oversight of state monitoring, we selected a nongeneralizable 

sample of three states: Georgia, Nebraska, and Wisconsin. We selected 

these states because they were overseen by three different CMS 

Regional Offices and provided coverage for assisted living services to a 

large number of Medicaid beneficiaries using different administrative 

models. For these states, we reviewed documentation of CMS oversight 

activities, interviewed state Medicaid officials and officials in CMS’s 

central office and the respective regional offices that have direct oversight 

of the states’ programs and review documentation submitted by the

states. We also obtained and reviewed other reports on Medicaid HCBS, 

including federal oversight of these services. In addition, we compared 

CMS’s oversight process and activities to the relevant standards for 

internal control in the federal government.8

We conducted this performance audit from March 2016 to January 2018 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 8

GAO, Standards for Internal Control in the Federal Government, GAO-14-704G, 

(Washington D.C.: September, 2014). Internal control is a process effected by an entity’s 

oversight body, management, and other personnel that provides reasonable assurance 

that the objectives of an entity will be achieved.
Page 6 GAO-18-179 Medicaid Assisted Living Services

Federal and state Medicaid spending on long-term care continues to 

increase; for example it increased from $146 billion in 2013 to $158 billion 

in 2015.9 Individuals seeking long-term care generally need care that is, 

by definition, longer term in nature and more costly than other types of 

care.10 Spending on long-term care services provided in home and 

community settings, including assisted living facilities, exceeds the 

amount spent on institutional settings such as nursing homes. State 

Medicaid programs may cover certain medical and non-medical services 

that assisted living facilities provide; however, the Medicaid statute does 

not provide for coverage of room and board charges of an assisted living 

facility.

In their federal-state partnership, both CMS and states play important 

roles in the oversight of Medicaid. CMS is responsible for oversight of 

state Medicaid programs. To conduct this oversight, CMS issues program 

requirements in the form of regulations and guidance, approves changes 

states make to their programs, provides technical assistance to states, 

collects and reviews required information and data from states and, in 

some cases, reviews individual state programs. States are responsible for 

the day-to-day administration of their Medicaid programs, including 

monitoring and oversight of the different HCBS programs through which 

they cover assisted living services, within broad federal rules and 

requirements. Each state is required to identify and designate a single 

state agency to administer or supervise the administration of its Medicaid 

program. The state Medicaid agency may partially or fully delegate the 

administration and oversight of the state’s HCBS programs to another 

state agency or other entity, such as a state unit on aging, a mental 

health department, or other state departments or agencies with 

 9

Data is for fiscal years as reported by Truven Health Analytics under subcontract with 

CMS. Truven notes that these figures are likely underestimated due to challenges in 

collecting data on long-term services provided through managed care. CMS has approved 

an increased number of managed long-term services and support programs in recent 

years—13 new programs in FY 2014 and 16 in FY 2015— as states incentivize the use of 

managed care to increase beneficiary access to HCBS in lieu of institutional care. See 

Musumeci, M., Key Themes in Capitated Medicaid Managed Long-Term Services and 

Supports Waivers, Kaiser Commission on Medicaid and the Uninsured: November 2014, 

Washington, D.C. 

10For example, according to CMS’s 2016 Actuarial Report, average spending per 

Medicaid beneficiary in 2015 was $7,492, while average aged beneficiary spending was 

$14,323 and $19,748 for persons with disabilities. 

Background
Page 7 GAO-18-179 Medicaid Assisted Living Services

jurisdiction over a specific population or service.

11 However, the state 

Medicaid agency is ultimately accountable to the federal government for 

compliance with the HCBS requirements.

Under different authorizing provisions of federal law, states have 

considerable flexibility to establish multiple HCBS programs including 

those covering assisted living services. A state Medicaid program can 

have multiple HCBS programs operating under different federal 

authorities. CMS is responsible for ensuring that states meet the 

requirements associated with their HCBS programs under these different 

authorities.

Key to states’ monitoring of the health and welfare of Medicaid 

beneficiaries is their tracking of, and response to, incidents that may 

cause harm to a beneficiary’s health or welfare, such as abuse, neglect, 

or exploitation—commonly referred to as critical incidents.12 Such 

monitoring is required for most HCBS programs; however, we previously 

found that requirements for states related to oversight of the health and 

welfare of beneficiaries in different types of HCBS programs varied, and 

recommended that CMS take steps to harmonize those requirements 

across programs.13

The most common HCBS programs with the most stringent federal 

requirements are HCBS waiver programs. These programs serve 

beneficiaries who are eligible for an institutional level of care; that is, 

beneficiaries must have needs that rise to the level of care usually 

provided in a nursing facility, hospital, or other institution. CMS oversees 

states’ HCBS waiver programs specifically by reviewing and approving 

applications and reviewing HCBS program reports that states submit. 

HCBS waiver program applications include specific requirements 

 11See 42 C.F.R. § 431.10 (2016). 

12We previously reported that state teams provided the federal government with limited 

information on how often nursing home residents face actual harm or are at risk of serious 

injury or death. See GAO, Nursing Homes: Federal Monitoring Surveys Demonstrate 

Continued Understatement of Serious Care Problems and CMS Oversight Weaknesses,

GAO-08-517, (Washington, D.C.: May 9, 2008.)

13Specifically, we reported that states are not required to apply the same quality measures 

across HCBS programs, and noted that states using HCBS waivers to provide services 

have the most federal requirements. See GAO, Medicaid Personal Care Services: CMS 

Could Do More to Harmonize Requirements across Programs, GAO-17-28, (Washington 

D.C.: Nov. 23, 2016). 
Page 8 GAO-18-179 Medicaid Assisted Living Services

implementing various statutory and regulatory provisions. (See text box 

below.) One requirement is that states have the necessary safeguards in 

place to protect the health and welfare of beneficiaries receiving services 

covered by HCBS waiver programs. For each of their HCBS waiver 

programs, states must demonstrate to CMS that they are meeting various 

requirements CMS has established regarding beneficiary health and 

welfare.

The Six Requirements States Must Demonstrate for Homeand Community-Based Services Waiver Programs

1. Administrative authority: The Medicaid agency retains ultimate 

administrative authority and responsibility for the operation of the 

waiver program by exercising oversight of the performance of 

waiver functions by other state and local/regional non-state 

agencies (if appropriate) and contracted entities.

2. Level of care: The state demonstrates that it implements the 

processes and instrument(s) specified in its approved waiver for 

evaluating/re-evaluating an applicant’s/waiver participant’s level of 

care consistent with care provided in a hospital, nursing facility, or 

intermediate care facility.

3. Qualified providers: The state demonstrates that it has designed 

and implemented an adequate system for assuring that all waiver 

services are provided by qualified providers.

4. Service plan: The state demonstrates it has designed and 

implemented an effective system for reviewing the adequacy of 

service plans for the waiver participants.

5. Health and welfare: The state demonstrates it has designed and 

implemented an effective system for assuring waiver participant 

health and welfare.

6. Financial accountability: The state must demonstrate that it has 

designed and implemented an adequate system for insuring 

financial accountability of the waiver program.

Source: Centers for Medicare & Medicaid Services. | GAO -18-179
Page 9 GAO-18-179 Medicaid Assisted Living Services

CMS also provides ongoing oversight of state HCBS programs through 

annual reports that states must submit for each of their HCBS waiver 

programs as well as renewal reports submitted about two years before an 

HCBS waiver is scheduled to end.14 The state reports are intended to 

provide CMS with information on the operation of state HCBS waiver 

programs.

In contrast to long-term care services provided in nursing facilities, less is 

known at the federal level about the oversight and quality of care in 

assisted living facilities. Generally, states establish their own licensing 

and oversight requirements for assisted living facilities. As a result, the 

requirements for assisted living facilities and the type and frequency of 

oversight can vary across states.

In contrast, nursing homes must meet a comprehensive set of federal 

requirements in order to receive payment for long-term care services for 

Medicaid and Medicare beneficiaries in addition to state requirements.15

CMS contracts with state entities to regularly inspect nursing facilities and 

investigate complaints to assess whether nursing homes meet these 

federal quality requirements. Annually CMS publishes a comprehensive 

report on nursing homes that serve Medicaid and Medicare beneficiaries, 

including the extent that beneficiaries are at risk for harm, based on these 

investigations and inspections.16 In addition, CMS publicly reports a 

summary of each nursing home’s quality data using a five-star quality 

rating based on health inspection results, staffing data, and quality 

measure data. The goal of this rating system is to help consumers make 

meaningful distinctions among high- and low-performing nursing homes.17

 14The CMS-372(S) is the report state Medicaid agencies submit to CMS annually and the 

information submitted prior to waiver renewal we refer to as renewal reports. 

15Medicare is the federally financed health insurance program for persons 65 years of age 

or over, certain individuals with disabilities, and individuals with end-stage renal disease. 

16In 2014, CMS funded care in 15,634 nursing homes and that year about 11 percent of 

nursing home facilities surveyed had situations CMS identifies as placing beneficiaries in 

actual harm or immediate jeopardy. Among the top 10 health related deficiencies identified 

in nursing homes in 2014 were: deficient efforts to control infections; lack of supervision to 

prevent avoidable hazards in the facility; and improper management and monitoring of 

residents’ medications. See Department of Health and Human Services, Centers for 

Medicare & Medicaid Services, Nursing Home Data Compendium 2015 Edition,

Washington, D.C., 2015.

17In December 2008, CMS enhanced its Nursing Home Compare public reporting site to 

include a set of quality star ratings for each nursing home that participates in Medicare or 

Medicaid. 
Page 10 GAO-18-179 Medicaid Assisted Living Services

This type of standardized framework for oversight, investigation and 

inspections, and reporting on quality of care concerns does not exist for 

assisted living facilities and other types of HCBS providers.

Forty-eight state Medicaid agencies reported collectively spending about 

$10 billion in state and federal Medicaid funds for assisted living services 

in 2014, according to our survey. The other 3 states reported that they did 

not pay for assisted living services.18 We estimate that this spending for 

services provided by assisted living facilities represents 12.4 percent of 

the $80.6 billion Medicaid spent on HCBS in all settings that year.19 More 

than 330,000 Medicaid beneficiaries received assisted living services, 

based on data reported to us by the 48 states.20

Nationally, the average spending per beneficiary on assisted living 

services in the 48 states in 2014 was about $30,000; states provided 

these HCBS services through fee-for-service and managed care delivery 

 18The three states were Kentucky, Louisiana, and West Virginia.

19 We estimated the percentage of HCBS spending that was for assisted living services by 

dividing the $10 billion in spending for assisted living services reported by states by the 

$80.6 billion Medicaid spent on HCBS as reported by the Medicaid and CHIP Payment 

and Access Commission. See, Home- and Community-Based Services, accessed Sept. 

18, 2017. https://www.macpac.gov/subtopic/home-and-community-based-services/. The 

federal government matches most state expenditures for Medicaid services on the basis 

of a statutory formula.

20This is likely an underestimate because a few of the 48 states indicated that they could 

not give us enrollment information for all of their programs. 

States Reported 

Spending $10 Billion 

on More than 130 

Programs Covering 

Assisted Living 

Services in 2014

Forty-Eight States 

Reported Spending $10 

Billion on Assisted Living 

Services for More than 

330,000 Medicaid 

Beneficiaries in 2014; 

Spending per Beneficiary 

Varied Widely by State
Page 11 GAO-18-179 Medicaid Assisted Living Services

models.21 Fee-for-service spending comprised 81 percent of total 

spending on assisted living services and managed care spending was 

about 19 percent of the total.22 The cost per beneficiary reported by 

surveyed states also varied based on payment type; average per 

beneficiary cost was $31,000 for fee-for-service and $27,000 for 

managed care. About 21 percent of Medicaid assisted living enrollment 

was for beneficiaries receiving these services under a managed care 

delivery model. (See table 1.)

Table 1: Medicaid Spending and Enrollment for Beneficiaries Receiving Services Provided by Assisted Living Facilities, as 

Reported by 48 States, 2014 

Fee-forservice Percent 

fee-for-service

Managed 

care 

Percent 

managed care Total

Spendinga $8.06 billion 81% $1.94 billion 19% $10 billion

Enrollment 262,645 79 70,805 21 333,450

Average spending 

per beneficiary

$31,000 $27,000 $30,000

Source: GAO survey of state Medicaid agencies. | GAO-18-179

a

For purposes of the survey, we asked states to report for 2014, the amount of total Medicaid 

spending for services provided by assisted living facilities. Home- and community-based services 

may be furnished by individual providers or by assisted living facilities. We asked states to include 

only instances where Medicaid paid the assisted living facility directly.

Average per-beneficiary spending varied significantly across the states. 

For example, for the nine states with the lowest spending per beneficiary, 

average Medicaid spending ranged from about $1,700 to about $9,500 

per beneficiary. In contrast, in the nine states with the highest perbeneficiary spending, the average spending ranged from about $43,000 

to $108,000 per beneficiary.23 (See Figure 1.) For more information on 

 21Under a managed care delivery model, states pay managed care organizations a set 

amount per beneficiary that includes the non-federal and federal share; providers render 

services and then submit claims to the managed care organizations to receive payment. 

Under fee-for-service, states make payments directly to providers; providers render 

services to beneficiaries and then submit claims to the state to receive payment. 

22The number of states using managed care to deliver long-term services and supports 

has increased in recent years, from 8 states in 2004 to 22 states in May 2017. 

Expenditures on HCBS provided under managed care have grown from about $8 billion in 

fiscal year 2012 to more than $19 billion in fiscal year 2015. 

23The differences in the extent and cost of services covered may account for the 

differences in per beneficiary expenditures across the states. For example, the state with 

the lowest reported per beneficiary spending did not cover intermittent skilled nursing 

services or physical and occupational therapy, whereas these services were each 

provided in the state with the highest per beneficiary cost.
Page 12 GAO-18-179 Medicaid Assisted Living Services

each state’s enrollment, total spending, and average per beneficiary 

spending on assisted living services, see appendix I.

Figure 1: Average per Beneficiary Spending for Assisted Living Services by State in 2014
Page 13 GAO-18-179 Medicaid Assisted Living Services

The 48 states that reported covering assisted living services in 2014 said 

they did so through 132 different programs. The majority of the states, 31 

of the 48, reported administering more than one program that covered 

assisted living services.24 As illustrated in table 2 below, of the different 

types of HCBS programs under which states can provide coverage for 

assisted living services, HCBS waivers were the most common type of 

program they used. Specifically, 39 states and 69 percent of the 

programs that provided assisted living services, were operated under the 

HCBS waiver program. (See appendix II for additional details on each 

state’s number of programs by program type and total number of HCBS 

programs that covered assisted living facility services in 2014.)

 24Because some states had programs under more than one HCBS authority and some 

states had more than one program under a single HCBS authority, one state could have 

several different programs. 

Forty-Eight States

Administered More than 

130 Programs That 

Covered Assisted Living 

Services, Mainly under 

HCBS Waiver Authority
Page 14 GAO-18-179 Medicaid Assisted Living Services

Table 2: Types of Programs 48 States Reported Using to Cover Assisted Living Services and Number of Distinct Assisted 

Living Service Programs, 2014 

Type of 

Program

Number of 

states

Number of distinct programs

(percent of programs)

Home- and Community-Based Services (HCBS) 

Waiversa,b 39 91 (69%)

1115 Demonstrationsc 12 13 (10)

State Plan Home- and Community-Based Servicesd 3 6 (5)

Community First Choicee 1 2 (2)

General State Planf 9 11 (8)

Otherg 7 9 (7)

Total 48h 132

Source: GAO survey of state Medicaid agencies. | GAO- 18-179

a

Section 1915(c) of the Social Security Act authorizes states to seek waivers of certain traditional 

Medicaid requirements to provide HCBS, including assisted living facility services. Only beneficiaries 

who need an institutional level of care are eligible.

b

Section 1915(b) of the Social Security Act authorizes states to seek waivers to operate a managed 

care program. States may use section 1915(b) waivers to mandate enrollment in managed care in 

conjunction with a section 1915(c) waiver to target eligibility and provide certain HCBS.

c

Section 1115 of the Social Security Act authorizes the Secretary of Health and Human Services to 

waive certain federal Medicaid requirements and allow costs that would not otherwise be eligible for 

federal matching funds for experimental, pilot, or demonstration projects that, in the Secretary’s 

judgment, are likely to assist in promoting Medicaid objectives.

d

Section 1915(i) of the Social Security Act authorizes states to provide any of the same range of 

services as available under HCBS Waivers, including assisted living facility services. Unlike HCBS 

Waiver programs, states have the option to cover beneficiaries who need an institutional level of care, 

but must provide services to beneficiaries who do not require an institutional level of care.

e

Section 1915(k) of the Social Security Act authorizes states to provide a range of HCBS services, 

including assisted living facility services. States must provide services to all beneficiaries who are 

eligible. Only beneficiaries who would otherwise need an institutional level of care are eligible.

f

Section 1905(a) of the Social Security Act authorizes states to provide various assisted living facility 

services under their state Medicaid plans. States must provide services to all eligible beneficiaries 

and cannot limit the number covered or use waiting lists. States can provide services to beneficiaries 

who need or do not need an institutional level of care.

g

An example of “other” authority is the Programs of All-Inclusive Care for the Elderly—a providerbased program that serves frail, elderly individuals with the goal of keeping them in the community 

rather than in long-term institutions as long as feasible.

h

Forty-eight states responded to our survey that they covered assisted living facility services. States 

can use more than one program to provide assisted living services.
Page 15 GAO-18-179 Medicaid Assisted Living Services

Almost all of the 48 states that covered assisted living services did so for 

two groups of Medicaid beneficiaries eligible through their programs.25 In 

45 of 48 states, aged beneficiaries received services provided by assisted 

living facilities. Similarly, in 43 of 48 states, physically disabled 

beneficiaries received services. (See Figure 2.)

Figure 2: Medicaid Beneficiary Groups Receiving Assisted Living Services in One 

or More State Programs, as Reported by 48 States, 2014

In 38 or more of the 48 states that covered assisted living services, six 

types of services were provided. For example, 45 states covered 

assistance with activities of daily living, such as bathing and dressing; 44 

states covered medication administration; and 41 states covered 

coordination of meals. (See Figure 3.)

 25States also provided information on challenges for Medicaid beneficiaries to access 

assisted living services, such as the cost of room and board. States also provided 

information on state programs and policies that may help address these access 

challenges. See appendix III for more information on access challenges states reported. 

States Reported Offering 

Assisted Living Services to 

Certain Aged and Disabled 

Beneficiaries, and Most 

Reported Covering 

Common Services
Page 16 GAO-18-179 Medicaid Assisted Living Services

Figure 3: Types of Assisted Living Services Covered by One or More State 

Programs, as Reported by 48 States, 2014

a

Activities of daily living are activities related to personal care. They include bathing, dressing, getting 

in and out of bed or a chair, using the toilet, and eating.

b

Instrumental activities of daily living are activities related to independent living. They include 

preparing meals, managing money, shopping for groceries or personal items, performing light or 

heavy housework, and using a telephone.
Page 17 GAO-18-179 Medicaid Assisted Living Services

State Medicaid agency approaches for oversight of assisted living 

services varied widely in terms of who provided the oversight for their 

largest programs, according to their responses to our survey.26 Thirteen 

of the 48 state Medicaid agencies reported delegating administrative 

responsibilities, including oversight of beneficiary health and welfare, to 

other state or local agencies. State Medicaid agencies may delegate the 

administration of programs to government or other agencies through a 

written agreement; however, state Medicaid agencies retain the ultimate 

oversight responsibility for those delegated functions. For example, 

among the 13 states that delegated HCBS program administration, the 

administering agencies were those that provided services to the aged, 

disabled, or both of these populations, such as the states’ Departments of 

Aging.27 (See text box, below, for examples of states’ delegation.)

 26Because states may operate multiple programs that cover assisted living services, and 

may administer and oversee beneficiary health and welfare differently depending on the 

program, we asked states to report on the oversight methods they used for their largest 

Medicaid program covering assisted living services. The most prevalent program, used by 

30 states, was the HCBS waiver program.

27In our survey, we asked specifically for state Medicaid agencies to report on whether 

they delegated or retained administration of their largest program that included coverage 

of assisted living facility services.

State Approaches for 

Overseeing Health 

and Welfare of 

Beneficiaries in 

Assisted Living 

Services Varied, 

Including Monitoring 

Incidents of 

Beneficiary Harm

Oversight by State 

Medicaid Agencies Varied 

in the Functions Delegated 

to Other Agencies, the 

Information Used, and the 

Actions Taken to Correct 

Any Identified Problems
Page 18 GAO-18-179 Medicaid Assisted Living Services

Examples of State Medicaid Agencies’ Delegation of Authority 

for Administration of Home- and Community-based Services’ 

Programs Covering Assisted Living Services

Georgia’s Elderly & Disabled Waiver Program was operated in 2014 

by the Georgia Department of Human Services Division of Aging 

Services, a separate agency of the state that was not a division/unit of 

the Medicaid agency. The Georgia Medicaid Agency maintained a 

formal interagency agreement with the Division of Aging Services which 

describes by function the required deliverables to support compliance 

and a schedule for delivery of reports.

Nebraska’s Waiver for Aged and Adults and Children with 

Disabilities is operated by the state Medicaid agency Division of 

Medicaid and Long Term Care. The majority of services are provided 

by independent contractors in order to allow service delivery in the rural 

and frontier areas of the state. The state Medicaid agency contracts 

with the Area Agencies on Aging, Independent Living Centers, and 

Early Development Network agencies to perform a variety of 

operational and administrative functions including authorizing services 

and monitoring the delivery of services.

Source: GAO analysis of information from selected state Medicaid agencies. | GAO-18-179

States also varied in the types of information they reported reviewing as 

part of the oversight of assisted living services, and the extent to which 

state Medicaid agencies review the information when another agency is 

responsible for administration.28 For example, other entities outside the 

state Medicaid agency—such as the agency delegated to administer an 

HCBS program, or a contractor that manages provider enrollment—may 

check to ensure a provider is allowed to deliver services to Medicaid 

 28In our survey we asked states to indicate who, if anyone, reviewed certain information 

that could help identify situations that may compromise the proper care of Medicaid 

beneficiaries receiving services provided by assisted living facilities. Those reviewing 

information may include the Medicaid agency, the agency delegated to administer the 

program, or another entity that has a separate oversight responsibility but is not 

responsible for administering the program. Even though the state Medicaid agency was 

sometimes the administering agency, other agencies could have responsibility for 

reviewing certain information sources. For example in one state, the responsibility of 

assuring a provider was not on the Health and Human Services Office of Inspector 

General’s list of excluded providers was contracted out, although the state’s Medicaid 

agency was the administering agency. 
Page 19 GAO-18-179 Medicaid Assisted Living Services

beneficiaries; in such cases, however, the state Medicaid agency might 

not be aware of the results of such checks.

As illustrated in table 3, in all 48 states the types of information generally 

reviewed by either the state Medicaid agency, the agency delegated 

administrative responsibilities, or other agencies were: critical incident 

reports, the HHS Office of Inspector General’s list of excluded providers, 

patient service plans, and information on concerns about care received 

directly from patients, relatives, caregivers or the assisted living facility 

itself. In many cases, the state Medicaid agency did not review all 

information sources reviewed by other agencies. For example, although 

all critical incident reports were reviewed in the 48 states by either the 

state Medicaid agency, the agency delegated administrative 

responsibilities, or another agency; in 16 of those states, the state 

Medicaid agency was not involved in those reviews, according to 

responses to our survey. Instead, the critical incident reports were 

reviewed by another entity designated responsible for the HCBS program 

in the state or another state entity with regulatory responsibility over the 

assisted living facility. Such reviews, including any critical incidents found, 

may not have been communicated back to the state Medicaid agency, 

according to responses to our survey.
Page 20 GAO-18-179 Medicaid Assisted Living Services

Table 3: Information Sources Reviewed by State Medicaid Agencies and Other Administering Agencies as Reported by 48 

States, 2014 

Information 

reviewed 

Description of 

information reviewed 

Number of states 

where state Medicaid 

agency or other state 

agency reviews (%)

Number of states 

where state 

Medicaid agency

does not review (%)

Critical incident reports Generated reports of incidents of potential or 

actual beneficiary harm

48 (100%) 16 (33%)

Health and Human Services 

Office of Inspector General’s 

list of excluded providers

List of providers excluded from participation in 

all Federal health care programs

48 (100) 13(27)

Patient service plans Comprehensive care plans that identify 

services provided to beneficiaries based on 

their needs and preferences 

48 (100) 18(38)

Information received directly 

from patient, relative,

caregiver, or assisted living 

facility

Reports of potential beneficiary harm received 

from these sources

48 (100) 11 (23)

Licensing and certification 

results

State licensing and certification reviews of a 

specific assisted living facility

47 (98) 20 (43)

Complaints, grievances, and 

appeals

Information about the number and nature of 

complaints, grievances, and appeals

47 (98) 10 (21)

Inspection results Information from state inspections of a specific 

assisted living facility

47 (98) 21 (45)

Information from long-term 

care ombudsman

Information from states’ Ombudsman 

programs who work to resolve problems 

related to the health, safety, welfare and rights 

of individuals in long term care facilities such 

as assisted living

43 (90) 15 (35)

Site visits Health and welfare Information collected from 

state onsite visits to an assisted living facility

46 (96) 18 (39)

Source: GAO survey of state Medicaid agencies. I GAO-18-179
Page 21 GAO-18-179 Medicaid Assisted Living Services

State Medicaid agencies also varied in reporting the extent to which they 

were made aware or notified when enforcement actions were taken as a 

result of concerns with beneficiary care identified by other entities.29

Various oversight actions may be taken by the state Medicaid agency, the 

agency delegated to administer an HCBS program, or a state regulatory 

agency, such as a state agency responsible for licensing and inspecting 

various types of HCBS providers. When delegated agencies or other 

licensing agencies take corrective action, the state Medicaid agency may 

not be aware unless notified by the agencies taking that action. For 

example, in 23 states, the investigation of potential incidents related to 

beneficiary health and welfare was delegated to another agency but in 

only 6 of these states was the state Medicaid agency always notified of 

such an investigation based on our survey. (See table 4 and text box 

below.)

 29States have a variety of oversight actions available to them. In our survey we asked 

state Medicaid agencies to indicate what actions were available and who was responsible 

for carrying them out when they are informed of a situation that may compromise the care 

of beneficiaries receiving services in assisted living facilities. In addition, we asked when a 

particular action has been taken by the responsible agency, whether the state Medicaid 

agency was notified.
Page 22 GAO-18-179 Medicaid Assisted Living Services

Table 4: Types of State Oversight Actions Available for Assisted Living Facilities, Delegation of Actions Outside State 

Medicaid Agencies, and Notification Practices, as Reported by 48 States, 2014 

Number 

of states 

Number 

of states 

delegating 

action to 

another 

agency

For states that delegate action, state Medicaid agency 

notified when action is taken by delegated entity

Number of states (percent)

Oversight Action Yes, always Yes, sometimes Never No response

Referrals to other agencies 48 20 6 (30%) 9 (45%) 4 (20%) 1

Onsite visit 48 21 4 (19) 13 (62) 3 (14) 1

Investigation or review of 

incident

47 23 6 (26) 13 (57) 3 (13) 1

Corrective action plan 

required

46 25 9 (36) 12 (48) 3 (12) 1

Required beneficiaries to 

be moved from facility

46 26 17 (65) 5 (19) 3 (12) 1

Additional beneficiaries are 

not allowed to move into 

facility

43 25 15 (60) 6 (24) 3 (12) 1

Payment withheld from 

facility

39 12 5 (42) 3 (25) 3 (25) 1

Monetary fine/penalty to 

facility

36 21 11 (52) 5 (24) 4 (19) 1

Source: GAO survey of state Medicaid agencies. I GAO-18-179

Example of a Collaborative Approach to Monitoring and Ensuring 

Quality Care Specifically for Assisted Living Facilities

In 2009, the Wisconsin Coalition for Collaborative Excellence in 

Assisted Living was formed to redesign the way quality is ensured and 

improved for individuals residing in assisted living communities. This 

public/private coalition utilizes a collective impact model approach that 

brings together the state, the industry, the consumer, and academia to 

identify and implement agreed upon approaches designed to improve 

the outcomes of individuals living in Wisconsin assisted living 

communities. The core of the coalition is the implementation of an 

association developed, department approved, comprehensive quality 

assurance, quality improvement program.

Source: Wisconsin Coalition for Collaborative Excellence in Assisted Living. | GAO-18-179
Page 23 GAO-18-179 Medicaid Assisted Living Services

For their largest HCBS programs that covered assisted living services, 

the 48 states varied in how they monitored “critical incidents” that caused 

actual or potential harm to Medicaid beneficiaries in assisted living 

facilities. Specifically, the 48 states varied in their ability to report the 

number of critical incidents; how they defined incidents, and the extent to 

which they made information on such incidents readily available to the 

public.

These states varied in whether they could provide us the number of 

critical incidents involving beneficiaries for their largest programs covering 

assisted living services, and for those that could report, the number of 

incidents they reported varied widely. In 26 of the 48 states the Medicaid 

agencies were unable to report, for their largest program covering 

assisted living services, the number of critical incidents that had occurred 

in assisted living facilities in 2014. The remaining 22 states reported a 

total of 22,921 critical incidents involving Medicaid beneficiaries in their 

largest programs covering assisted living services.30 The number of 

critical incidents reported in these states ranged from 1 to 8,900.31 For six 

of these states the number of critical incidents reported was more than 

1,000, (See text box, below, for examples of selected state processes 

managing critical incidents.)

 30We asked states specifically to provide us with the total number of substantiated critical 

incidents for Medicaid beneficiaries. 

31It was not within the scope of our review to examine why some states were able to 

report on substantiated critical incidents.

State Medicaid Agencies 

Varied in How They 

Monitored Incidents of 

Potential or Actual Harm to 

Medicaid Beneficiaries 

Receiving Assisted Living 

Services
Page 24 GAO-18-179 Medicaid Assisted Living Services

Selected States’ Processes for Managing Beneficiary Harm or 

Potential Harm in Assisted Living Facilities

• Georgia: According to state officials in 2014 there was no 

centralized or comprehensive system for capturing and tracking the 

data on actual and potential violations. State officials acknowledged 

the lack of a centralized system prevents the Division of Community 

Health [Medicaid office] from tracking the status of each problem.

• Nebraska: According to state officials, Nebraska’s Adult Protective 

Services operates an electronic system that coordinates across 

state social service programs. When Adult Protective Services 

initiates an investigation of reported harm to an assisted living 

resident, the state Medicaid agency is automatically notified.

Source: GAO interviews with selected state agencies. | GAO-18-179

Reasons state Medicaid agencies reported for being unable to provide us 

with the number of critical incidents included limitations in the data or data 

systems for tracking them. Nine states reported an inability to track 

incidents by provider type, and thus distinguish critical incidents in 

assisted living facilities from other providers of home and community 

based services. States also cited lacking a system to collect critical 

incidents (9 states), and that the system for reporting could not identify 

whether a resident was a Medicaid beneficiary (5 states). Even in the 32 

states where the state Medicaid agencies reported reviewing information 

about critical incidents, 20 states were unable to provide the actual 

number of critical incidents that occurred in assisted living facilities.32

State Medicaid agencies’ definitions of critical incidents also varied.33 As 

illustrated in Figure 4, all 48 states cited physical assault, emotional 

abuse, and sexual assault or abuse as a critical incident in their largest 

programs providing assisted living services in 2014. However, for other 

types of incidents, several states did not identify the incident as critical, 

 32Critical incidents involving Medicaid beneficiaries can be reported to and investigated by 

entities other than state Medicaid agencies, such as Adult Protective Services for adult 

beneficiaries. Adult Protective Services officials are generally not located within a state’s 

Medicaid office; as a result, Medicaid staff may not learn of incidents involving Medicaid 

beneficiaries that are reported directly to Adult Protective Services unless Adult Protective 

Services staff share this information.

33We asked state Medicaid agencies to identify what they considered a critical incident for 

their largest program. State programs within a state can vary from one program to the next 

in what is considered a critical incident. 
Page 25 GAO-18-179 Medicaid Assisted Living Services

including discharge and eviction from the facility (not a critical incident in 

24 states), medication errors (not a critical incident in 7 states), and 

unauthorized use of seclusion, (not a critical incident in 6 states). For 

other serious incidents, a relatively small number of states did not identify 

the incident as critical, such as unexplained death (not a critical incident 

in 3 states) and missing beneficiaries (not a critical incident in 2 states). 

See appendix IV for a full list of the beneficiary-related incidents and the 

number of states that identify each as critical.

Figure 4: Selected Incidents Defined as Critical for States’ Largest Medicaid Programs Providing Assisted Living Facility 

Services, as Reported by 48 States, 2014
Page 26 GAO-18-179 Medicaid Assisted Living Services

Although half of the 48 states that cover assisted living services did not 

consider discharges or evictions to be critical incidents, according to state 

responses to our survey, 42 states offered certain protections related to

involuntary discharge of Medicaid residents who live in assisted living 

facilities. The majority of protections consisted of a lease agreement 

requirement that applied to other housing contracts in the state, such as 

providing residents with eviction notices. Other protections included an 

appeals process (10 states) and a requirement for the facility to find an 

alternative location for the resident (10 states).

State Medicaid agencies also varied in whether they made information on 

critical incidents and other key information readily available to the public. 

(See table 5.) Beneficiaries seeking care in an assisted living facility may 

want to know the number of critical incidents related to a particular facility. 

Through our survey we found that states differed in the availability of 

information related to health and welfare that was available to the public. 

For example, 34 of the 48 states reported that they made critical incident 

information available to the public by phone, website, or in person, and 

the remaining 14 states did not have such information available at all. 

Although all 48 states had information in some form on which assisted 

facilities accepted Medicaid beneficiaries, 8 states could not provide this 

information by phone and 22 states could not provide the information in 

person.
Page 27 GAO-18-179 Medicaid Assisted Living Services

Table 5: Information Publically Available about Assisted Living Facilities as Reported by 48 States, 2014 

Source: GAO survey of state Medicaid agencies. | GAO-18-179

In recent years, CMS has taken steps to improve oversight of beneficiary 

health and welfare in HCBS programs by adding new HCBS waiver 

application requirements for state monitoring of beneficiary health and 

welfare. CMS requires state waiver applications to include specific 

requirements that implement various statutory and regulatory provisions, 

including a provision that states assure that they will safeguard the health 

and welfare of Medicaid beneficiaries. In March 2014, CMS added 

unexplained death to the events that states must be able to identify and 

address on an ongoing basis, as part of their efforts to prevent instances 

of abuse, neglect, and exploitation, and added four new requirements for 

states to protect beneficiary health and welfare.34 (See table 6.) In its 

guidance implementing the 2014 requirements, CMS noted that state 

associations and state representatives’ work groups had agreed that 

“health and welfare is one of the most important assurances to track, and 

requires more extensive tracking to benefit the individuals receiving 

services, for instance by using data to prevent future incidents.” As a 

condition for approval of their HCBS waiver applications for each of the 

requirements, states must identify and agree with CMS on the type of 

information they will collect to provide as evidence that they will meet the 

requirements. However, according to CMS officials, each state Medicaid 

agency has wide discretion over the information it will collect and report to 

 34See Centers for Medicare & Medicaid Services, Modifications to Quality Measures and 

Reporting in §1915(c) Home and Community-Based Waivers, (Baltimore, Md.: March 12, 

2014). 

Available by 

phone,

Available by 

website,

Available in 

person,

Not 

available, 

Type of Information

number of 

states (%)

number of 

states (%)

number of 

states (%)

number of 

states (%)

Which assisted living facilities accept Medicaid 

beneficiaries

40 (83%) 35 (73%) 26 (54%) 0 (0%)

Inspection Survey results 18 (38) 36 (75) 20 (42) 1 (2)

Complaints/grievances involving a specific facility 14 (29) 17 (35) 14 (29) 12 (25)

Critical incidents involving a specific facility 14 (29) 10 (21) 14 (29) 14 (29)

Sanctions or penalties imposed against a specific 

facility

14 (29) 26 (54) 16 (33) 4 (8)

Services offered at a particular facility 36 (75) 38 (79) 22 (46) 1 (2)

CMS Has Taken 

Steps to Improve 

Oversight of the 

Health and Welfare of 

Medicaid 

Beneficiaries in 

Assisted Living and 

Other Community 

Settings, but Gaps 

Remain
Page 28 GAO-18-179 Medicaid Assisted Living Services

demonstrate that it is meeting the health and welfare requirements and 

protecting beneficiaries.

Table 6: CMS Requirements for States’ Home- and Community-Based Waivers to Protect Beneficiary Health and Welfare, prior 

to and after March 2014 Guidancea

CMS requirements prior to March 2014 CMS requirements after March 2014

On an ongoing basis the state identifies addresses and seeks 

to prevent instances of abuse, neglect, and exploitation

The state demonstrates it has designed and implemented an 

effective system for assuring waiver participant health and welfare 

On an ongoing basis the state identifies, addresses, and seeks to 

prevent instances of abuse, neglect, exploitation, and unexplained 

death

The state demonstrates that an incident management system is in 

place that effectively resolves instances of abuse, neglect, 

exploitation, and unexplained death—critical incidents—and 

prevents further similar incidents to the extent possible

The state policies and procedures for the use or prohibition of 

restrictive interventions (including restraints and seclusion) are 

followed

The state establishes overall health care standards and monitors 

those standards based on the responsibility of the service provider 

as stated in the approved waiver

Source: GAO summary of CMS guidance. | GAO-18-179

a

The new requirements were effective for waiver applications and waiver renewals submitted after 

June 1, 2014. However, states could adopt the requirements earlier.

Although CMS added the additional requirements in 2014 for 

safeguarding beneficiary health and welfare, the agency generally did not 

change requirements for how it oversees state monitoring efforts once 

HCBS waivers are approved. We found a number of limitations in CMS’s 

oversight of approved HCBS waivers that undermine the agency’s ability 

to effectively monitor state oversight of HCBS waivers. These limitations 

include: unclear guidance on what states should identify and report 

annually related to any identified program deficiencies; lack of 

requirements on states to regularly provide CMS information on critical 

incidents; and CMS’s inconsistent enforcement of the requirement that 

states submit annual reports.

Unclear guidance on what states should identify and report annually 

related to any identified program deficiencies. Federal law requires 

states to provide CMS with information annually on an HCBS waiver’s 

impact on (1) the type and amount, and cost of services provided and (2) 

the health and welfare of Medicaid beneficiaries receiving waiver 

services. CMS reporting requirements give states latitude to determine 
Page 29 GAO-18-179 Medicaid Assisted Living Services

what to report as health and welfare deficiencies found through state 

monitoring of their HCBS programs.

With respect to health and welfare, CMS’s State Medicaid Manual directs 

states when preparing their annual reports to “check the appropriate 

boxes regarding the impact of the waiver on the health and welfare” of 

beneficiaries and to describe relevant information.35 States are required to 

provide a brief description of the state process for monitoring beneficiary 

safeguards, use check boxes to indicate that beneficiary health and 

welfare safeguards have been met, and identify whether deficiencies 

were detected during the monitoring process. If states determine that 

deficiencies were identified through monitoring, states are required to 

“provide a summary of the significant areas where deficiencies were 

detected” and an explanation of the actions taken to address deficiencies 

and ensure the deficiencies do not recur.36

CMS’s written instructions for completing the HCBS annual report do not 

provide further guidance regarding reporting of deficiencies. For example, 

the reporting instructions do not describe or identify 1) what states are 

supposed to report as deficiencies, 2) how they are to identify which 

deficiencies are most significant, and 3) the extent to which states need to 

explain the steps taken to ensure that deficiencies do not recur. The lack 

of clarity is inconsistent with federal internal control standards, in 

particular, the need for federal agencies to have processes that identify 

information needed to achieve objectives and address risk.37 Without 

clear instructions as to what states must report, states’ annual reports 

may not identify deficiencies with states’ HCBS waiver programs that may 

affect the health and welfare of beneficiaries.

States may determine that issues or problems they identified through 

monitoring do not represent reportable deficiencies and therefore may not 

 35See U.S. Department of Health and Human Services, Centers for Medicare & Medicaid 

Services, State Medicaid Manual, Section 2700.6. 

36In addition to indicating whether deficiencies were found, states are also required to use 

check boxes to attest that “(1) all provider standards and health and welfare safeguards 

have been met and corrective actions have been taken where appropriate”; and (2) “all 

providers of waiver services were properly trained, supervised, and certified or licensed, 

and corrective actions have been taken where appropriate.” 

37GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: Sept. 10, 2014).
Page 30 GAO-18-179 Medicaid Assisted Living Services

report those deficiencies to CMS, increasing the risk that problems are 

not elevated to CMS’s attention.

In the case of one of the selected states we reviewed, no problems were 

included on the annual reports submitted to CMS between 2011 and 

2015. However, when CMS completed its review in the fourth year of the 

state’s waiver— for purpose of renewing the waiver—it determined the 

state was not assuring beneficiary health and welfare. CMS found that the 

information the state submitted for purpose of renewal suggested a 

“pervasive failure” by the state to assure the health and welfare of 

beneficiaries receiving services, including assisted living services. In 

particular, CMS noted the state provided insufficient information regarding 

the number of unexpected or suspicious beneficiary deaths. CMS 

concluded that the state failed to demonstrate that it has effective 

systems and processes for ensuring the health and welfare of 

beneficiaries.

Lack of requirements on states to annually provide CMS information 

on critical incidents. Despite the importance of state critical incident 

management and reporting systems to protecting the health and welfare 

of beneficiaries, CMS lacks written requirements that states provide 

information needed for the agency oversight of state monitoring of critical 

incidents. According to CMS, a critical element of effective state oversight 

is the operation of data systems that support the identification of trends 

and patterns in the occurrence of critical incidents to identify needed 

improvements. Such a system is also consistent with federal internal 

controls standards which specify, in particular, the need for federal 

agencies to have processes that identify information needed to achieve 

objectives and address risk.38

CMS requires states to operate a critical incident reporting system. On 

their waiver applications states must check a box indicating they operate 

a system and also describe their system—including who must report and 

when, and what must be reported. Despite this requirement for states to 

have critical incident reporting systems, CMS does not require states to 

report to CMS any data from these systems on critical incidents as part of 

their required annual reports. Specifically, states are not required to 

include, in their annual reports, the number of critical incidents reported or 

 38GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: Sept. 10, 2014).
Page 31 GAO-18-179 Medicaid Assisted Living Services

substantiated that involve Medicaid beneficiaries. As a result, CMS does 

not have a method to confirm what states describe about critical incident 

management systems, which is a required component of states’ waiver 

applications or to assess the capabilities of states’ systems. For example, 

CMS cannot confirm whether the state systems can report incidents by 

location or type of residential provider, such as assisted living facilities; 

the type and severity of critical incidents that occurred; and the number of 

incidents that involved Medicaid beneficiaries. Without annual critical 

incident reporting, CMS may be at risk of (1) not having adequate 

evidence that states are meeting CMS requirements to have an effective 

critical incident management and reporting system and of (2) being 

unaware of problems with states’ abilities to identify, track, and address 

critical incidents involving Medicaid beneficiaries.

Our prior work has shown that the lack of explicit reporting requirements 

on critical incidents not only impacts HCBS waiver programs but also 

impacts other types of Medicaid long-term services programs as well. 

Specifically,

• In a November 2016 report, we found that CMS requirements for 

states to report on their critical incident monitoring systems for the 

HCBS waiver program were more stringent than those for other types 

of HCBS programs, potentially leaving those other programs at even 

greater risk.39 We recommended that CMS take steps to harmonize 

requirements across different types of HCBS programs. HHS 

concurred with the recommendation stating it would seek input from 

states, stakeholders, and the public regarding harmonizing 

requirements across programs.

• In an August 2017 report we found similar issues in critical incident 

reporting requirements for other types of long term services programs, 

particularly those used to provide HCBS and other long term services 

under managed care. We found that CMS was not always requiring 

states that contracted with managed care organizations to provide 

long term services and supports to report to CMS sufficient 

information on critical incidents and other key areas needed to 

 39This report focused on a review of beneficiary protections and protections to ensure that 

billed services were provided across different types of HCBS programs that cover 

personal care services. With respect to critical incidents, we found that not all types of 

HCBS programs required states to describe their incident management system or identify, 

address and seek to prevent instances of beneficiary abuse, neglect, exploitation, and 

unexplained death on an ongoing basis. See GAO-17-28.
Page 32 GAO-18-179 Medicaid Assisted Living Services

monitor beneficiary access and quality.40 We recommended that CMS 

take steps to identify and obtain key information needed to better 

oversee states’ efforts to monitor beneficiary access to quality 

services in their managed long-term services and supports programs. 

HHS concurred with this recommendation and stated that the agency 

would take this recommendation into account as part of an ongoing 

review of its 2016 Medicaid managed care rule.41

We continue to believe that the implementation of our prior 

recommendations is needed to help improve CMS oversight of states 

monitoring of beneficiary safety.

CMS’s inconsistent enforcement of the requirement that states 

submit annual reports. States must prepare and submit an annual 

report for each HCBS waiver as a condition of waiver approval. According 

to CMS guidance, the agency’s review of the annual report is part of the 

ongoing oversight of HCBS waiver programs and not submitting an 

annual report jeopardizes the states renewal of HCBS waiver programs. 

However, some states have not been timely in submitting the required 

annual reports for their HCBS waivers. A review of 2013 HCBS annual 

reports by a CMS contractor, published in 2016, found that annual reports 

were missing for 29 HCBS waivers and multiple years’ of annual reports 

were missing for 8 waivers.42

In 2014, CMS adopted new strategies to ensure compliance with HCBS 

waiver requirements, including the requirement that states submit annual 

reports on a timely basis.43 These strategies include withholding federal 

funding, placing a moratorium on enrollment in the waiver, or other 

actions the agency determines necessary.44 CMS officials reported that 

 40 See GAO, Medicaid Managed Care: CMS Should Improve Oversight of Access and 

Quality in States’ Long-Term Services and Supports Programs, GAO-17-632 

(Washington, D.C.: Aug. 14, 2017). 

41In May 2016, CMS issued a final rule to modernize its Medicaid managed care 

regulations. See 81 Fed. Reg. 27,498 (May 6, 2016).

42Truven Health Analytics. Medicaid 1915(c) Waiver Data based on the CMS 372 Report, 

2012 – 2013. Washington, DC. September 2016.

43Medicaid Program; State Plan Home and Community-Based Services,5-Year Period for 

Waivers, Provider Payment Reassignment, and Home- and Community-Based Setting 

Requirements for Community First Choice and Home and Community-Based Services 

(HCBS) Waivers; Final Rule, 79 Fed. Reg. 2,948, 3,020 (Jan. 16, 2014).

4442 C.F.R § 441.304(g) (2016). 
Page 33 GAO-18-179 Medicaid Assisted Living Services

the agency had not used these new strategies with states that were 

delinquent in submitting their annual reports. Officials said they were in 

the process of reviewing how to implement these new strategies in the 

case of one state; however, as of August 2017 officials had not finalized a 

decision. CMS’s ability to provide effective oversight of state programs 

and protect beneficiary health and welfare is undermined by the lack of 

enforcement and receipt of required annual waiver reports.

Effective state and federal oversight is necessary to ensure that the 

health and welfare of Medicaid beneficiaries receiving assisted living 

services are protected, especially given the particular vulnerability of 

many of these beneficiaries to abuse, neglect, or exploitation. CMS has 

taken steps to strengthen beneficiary health and welfare protections in 

states’ HCBS waiver programs, the most common type of program that 

covers assisted living services and one that serves the most vulnerable 

beneficiaries. In particular, CMS now has multiple requirements for states 

to safeguard beneficiaries’ health and welfare, including requirements to 

operate an effective critical incident management and reporting system to 

identify, investigate, and address incidents of beneficiary abuse, neglect, 

exploitation, and unexplained death.

However, CMS’s ability to effectively monitor how well states are assuring 

beneficiary health and welfare is limited by gaps in state reporting to 

CMS. CMS has not provided clear guidance to states on what information 

to include in annual reports on deficiencies they identify. As a result, CMS 

lacks assurance that it is receiving consistent, complete, and relevant 

information on deficiencies that is needed to oversee beneficiary health 

and welfare. Lacking clear guidance on the reporting of deficiencies may 

result in a delayed recognition of problems that may affect beneficiary 

health and welfare. Further, for years, states have been required to check 

a box attesting that they operate a critical incident management system, 

but have not always been required to report information on incidents of 

potential or actual harm to beneficiaries. Given the increasing prevalence 

of assisted living facilities as a provider of services to Medicaid 

beneficiaries, it is unclear why more than half of states responding to our 

survey could not provide us information on the number of critical incidents 

that occurred in these facilities in their states. Reporting data from their 

critical incident systems, such as the number of incidents, the type and 

severity of the incidents, or the location or type of facility in which the 

incident occurred would provide evidence that an effective system is in 

place, provide information on the extent beneficiaries are subject to actual 

or potential harm, and allow for tracking trends over time.

Conclusions
Page 34 GAO-18-179 Medicaid Assisted Living Services

Finally, CMS has not ensured that all states submit annual reports on 

their HCBS waiver programs as required. Without improvements to state 

reporting, CMS cannot ensure states are meeting their commitments to 

protect the health and welfare of Medicaid beneficiaries receiving assisted 

living services, potentially jeopardizing their care.

We are making the following three recommendations to CMS:

The Administrator of CMS should provide guidance and clarify 

requirements regarding the monitoring and reporting of deficiencies that 

states using HCBS waivers are required to report on their annual reports. 

(Recommendation 1)

The Administrator of CMS should establish standard Medicaid reporting 

requirements for all states to annually report key information on critical 

incidents, considering, at a minimum, the type of critical incidents 

involving Medicaid beneficiaries, and the type of residential facilities, 

including assisted living facilities, where critical incidents occurred. 

(Recommendation 2)

The Administrator of CMS should ensure that all states submit annual 

reports for HCBS waivers on time as required. (Recommendation 3)

We provided a draft of this report to HHS for review and comment. HHS 

provided written comments, which are reproduced in Appendix V. The 

department also provided technical comments, which we incorporated as 

appropriate. In its written comments, the department concurred with two 

of our three recommendations, specifically, that CMS will clarify 

requirements for state reporting of program deficiencies and ensure that 

all states submit required annual reports on time. HHS did not explicitly 

agree or disagree with our third recommendation to require all states to 

report information on critical incidents to CMS annually. The department 

noted it has established a workgroup to learn more about states’ health 

and welfare systems and that it will use the results of this workgroup to 

determine which additional reporting requirements would be beneficial. 

The workgroup’s review will continue through calendar year 2018. In 

technical comments, HHS indicated that after the workgroup’s review is 

complete it will consider annual reporting of critical incidents. We believe 

establishing the workgroup is a positive first step towards improving 

oversight and state reporting and encourage HHS to require annual 

reporting on critical incidents when developing additional reporting 

requirements.

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
Page 35 GAO-18-179 Medicaid Assisted Living Services

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of Health 

and Human Services, the Administrator of CMS, the Administrator of the 

Administration for Community Living, appropriate congressional 

committees, and other interested parties. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please 

contact me at (202) 512-7114 or at iritanik@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. GAO staff that made key contributions to 

this report are listed in appendix VI.

Katherine M. Iritani

Director, Health Care
Appendix I: State Reported Enrollment and 

Spending on Assisted Living Services

Page 36 GAO-18-179 Medicaid Assisted Living Services

Table 7: State Reported Enrollment, Total Spending, and per Beneficiary Spending for Medicaid Beneficiaries Who Received 

Services through Assisted Living Facilities, as Reported by 48 States, 2014

State

Number of beneficiaries 

receiving services in 

assisted living facilities

Total spending 

for Medicaid assisted 

living servicesa

(in dollars)

Per beneficiary 

spending on Medicaid 

assisted living services

(in dollars)

Alabama 3,278 $245,656,600 $74,941

Alaska Not Reported 155,534,613 NA.

Arizona 9,902 422,455,160 42,664

Arkansas 1,122 18,089,168 16,122

California 28,736 1,003,608,859 34,925

Colorado 11,152 312,329,880 28,007

Connecticut 762 10,999,638 14,435

Delaware 237 1,654,537 6,981

District of Columbia 39 533,274 13,674

Florida 18,284 139,043,161 7,605

Georgia 8,093 222,302,438 27,468

Hawaii 2,418 195,478,099 80,843

Idaho 7,529 35,841,261 4,760

Illinois 9,981 147,146,560 14,743

Indiana 8,000 418,064,636 52,258

Iowa 3,449 56,557,426 16,398

Kansas 1,836 15,701,475 8,552

Maine 10,139 469,469,357 46,303

Maryland 1,507 23,192,139 15,390

Massachusetts 10,898 845,996,726 77,629

Michigan 11,731 294,453,000 25,100

Minnesota 21,847 662,035,060 30,303

Mississippi 704 9,470,956 13,453

Missouri 6,289 25,919,078 4,121

Montana 911 14,242,682 15,634

Nebraska 2,511 26,833,619 10,686

Nevada 768 7,779,845 10,130

New Hampshire 2,767 127,716,199 46,157

New Jersey 4,056 56,526,692 13,937

New Mexico 359 4,969,918 13,844

New York 7,952 160,315,655 20,160

North Carolina 18,890 179,257,515 9,490

Appendix I: State Reported Enrollment and 

Spending on Assisted Living Services
Appendix I: State Reported Enrollment and 

Spending on Assisted Living Services

Page 37 GAO-18-179 Medicaid Assisted Living Services

State

Number of beneficiaries 

receiving services in 

assisted living facilities

Total spending 

for Medicaid assisted 

living servicesa

(in dollars)

Per beneficiary 

spending on Medicaid 

assisted living services

(in dollars)

North Dakota 7,446 12,500,572 1,679

Ohio 5,770 75,500,000 13,085

Oklahoma 238 3,076,462 12,926

Oregon 21,505 499,254,710 23,216

Pennsylvania 11,913 1,291,852,967 108,441

Rhode Island 772 6,161,768 7,982

South Carolina 13,291 132,144,812 9,942

South Dakota 1,089 7,808,825 7,171

Tennessee 6,389 465,792,989 72,905

Texas 4,341 44,545,673 10,262

Utah 1,427 24,472,823 17,150

Vermont 2,255 32,848,318 14,567

Virginia 59 584,913 9,914

Washington 16,528 253,250,000 15,322

Wisconsin 22,325 816,700,000 36,582

Wyoming 1,955 30,391,479 15,546

Source: GAO survey of state Medicaid agencies. | GAO-18-179

Note: Three states reported that they did not pay for assisted living services: Kentucky, Louisiana, 

and West Virginia.

a

For purposes of the survey, we asked states to report the amount of total Medicaid spending for 

services provided by assisted living facilities. Home- and community-based services may be 

furnished by individual providers or by assisted living facilities. We asked states to include only 

instances where Medicaid paid the assisted living facility directly.
Appendix II: State Reported Home- and 

Community-Based Services (HCBS) Programs 

Covering Assisted Living Services

Page 38 GAO-18-179 Medicaid Assisted Living Services

Table 8: State Reported Home- and Community-Based Programs Covering Assisted Living Services, by State and Authority, 

as Reported by 48 States, 2014

State

Number of 

programs

HCBS waiver 

(1915(c)(b/c))

1115 

demonstrations

General 

state plan 

(1905a)

State plan 

HCBS

(1915i)

Community 

first choice 

(1915k) Other

Alabama 1 1 0 0 0 0 0

Alaska 4 4 0 0 0 0 0

Arizona 2 0 1 0 0 0 1

Arkansas 1 1 0 0 0 0 0

California 5 3 0 0 2 0 0

Colorado 8 7 0 1 0 0 0

Connecticut 1 1 0 0 0 0 0

Delaware 1 0 1 0 0 0 0

District of Columbia 1 1 0 0 0 0 0

Florida 6 4 1 0 0 0 1

Georgia 2 2 0 0 0 0 0

Hawaii 2 1 1 0 0 0 0

Idaho 2 1 0 1 0 0 0

Illinois 1 1 0 0 0 0 0

Indiana 7 4 0 0 3 0 0

Iowa 3 3 0 0 0 0 0

Kansas 3 1 1 0 0 0 1

Maine 5 3 0 0 0 0 2

Maryland 1 1 0 0 0 0 0

Massachusetts 8 4 1 2 0 0 1

Michigan 5 2 0 2 1 0 0

Minnesota 4 4 0 0 0 0 0

Mississippi 1 1 0 0 0 0 0

Missouri 1 0 0 1 0 0 0

Montana 1 1 0 0 0 0 0

Nebraska 2 2 0 0 0 0 0

Nevada 2 2 0 0 0 0 0

New Hampshire 3 3 0 0 0 0 0

New Jersey 1 0 1 0 0 0 0

New Mexico 1 0 1 0 0 0 0

New York 2 1 0 1 0 0 0

North Carolina 1 0 0 1 0 0 0

North Dakota 2 2 0 0 0 0 0

Appendix II: State Reported Home- and 

Community-Based Services (HCBS) 

Programs Covering Assisted Living Services
Appendix II: State Reported Home- and 

Community-Based Services (HCBS) Programs 

Covering Assisted Living Services

Page 39 GAO-18-179 Medicaid Assisted Living Services

State

Number of 

programs

HCBS waiver 

(1915(c)(b/c))

1115 

demonstrations

General 

state plan 

(1905a)

State plan 

HCBS

(1915i)

Community 

first choice 

(1915k) Other

Ohio 2 2 0 0 0 0 0

Oklahoma 3 3 0 0 0 0 0

Oregon 2 0 0 0 0 2 0

Pennsylvania 3 3 0 0 0 0 0

Rhode Island 2 0 2 0 0 0 0

South Carolina 5 5 0 0 0 0 0

South Dakota 1 1 0 0 0 0 0

Tennessee 4 3 1 0 0 0 0

Texas 3 2 1 0 0 0 0

Utah 1 1 0 0 0 0 0

Vermont 2 0 1 1 0 0 0

Virginia 1 1 0 0 0 0 0

Washington 5 2 0 1 0 0 2

Wisconsin 7 6 0 0 0 0 1

Wyoming 1 1 0 0 0 0 0

Total number of 

programs

132 91 13 11 6 2 9

Source: GAO survey of state Medicaid agencies. | GAO-18-179

Note: Three states reported that they did not pay for assisted living services: Kentucky, Louisiana, 

and West Virginia.
Appendix III: Information Regarding Medicaid 

Beneficiaries’ Access to Assisted Living 

Services

Page 40 GAO-18-179 Medicaid Assisted Living Services

Our survey of state Medicaid agencies regarding coverage, spending, 

enrollment, and oversight of assisted living services in 2014, obtained 

information on challenges for Medicaid beneficiaries to access assisted 

living services in their states.1 States provided information related to 

factors that create challenges for Medicaid beneficiaries’ ability to access 

and receive assisted living services and the extent states had policies to 

help beneficiaries with the cost of room and board.

A number of states in our survey cited common factors as creating the 

greatest challenges to a beneficiary’s ability to access assisted living 

services, including

• the number of assisted living facilities willing to accept Medicaid 

beneficiaries (13 states or 27 percent of the 48 states)

• program enrollment caps (9 states or 19 percent of the 48 states)

• beneficiaries’ inability to pay for assisted living facility room and board 

(9 states or 19 percent of the 48 states), which Medicaid typically 

does not cover

• low rates the state Medicaid program paid assisted living facilities (8 

states or 17 percent of the 48 states).

A number of states reported that they had policies to assist Medicaid 

beneficiaries with the costs of room and board charged by assisted living 

facilities, which Medicaid does not typically cover.2 Two common policies, 

cited by at least half of the states, were aimed at limiting how much 

assisted living facilities could charge Medicaid beneficiaries for room and 

board. For example, 30 of 48 states, limited the amount facilities could 

charge for room and board to the amount of income certain beneficiaries 

receive as Supplemental Security Income.3 The other commonly cited 

policies focused on providing financial assistance to the beneficiaries to 

defray the room and board costs. (See table 9.)

 1

We surveyed the 50 states and the District of Columbia regarding Medicaid assisted 

living services in 2014. Three states responded that their Medicaid program does not 

cover assisted living services. Information provided is from the 48 states that reported 

covering assisted living services.

2

Our survey asked states what policies, if any, they had to assist beneficiaries with paying 

for room and board costs of assisted living facilities. 

3

The Supplemental Security Income program provides cash payments to eligible lowincome individuals with disabilities or aged.

Appendix III: Information Regarding 

Medicaid Beneficiaries’ Access to Assisted 

Living Services
Appendix III: Information Regarding Medicaid 

Beneficiaries’ Access to Assisted Living 

Services

Page 41 GAO-18-179 Medicaid Assisted Living Services

Table 9: Policies States Used to Assist Medicaid Beneficiaries with Assisted Living Facilities’ Room and Board Payments in 

2014, as Reported by 48 states

Type of 

Policy

Description 

of policy

Number of states 

(percent)

Use Supplemental Security Income 

(SSI) to set payment amount

Requires assisted living facilities to accept the amount of 

income a beneficiary receives as SSI income as full 

payment for room and boarda

30 (63%) 

State or Federal funds other than 

Medicaid 

Separate programs funded with state general funds or 

other Federal funds that provide financial assistance to 

certain beneficiaries to help defray the room and board 

costs 

25 (52)

Establish maximum payment amount Requires assisted living facilities to accept a maximum 

amount the state established for room and board for 

Medicaid beneficiaries 

24 (50)

Funds from family or trust allowed Allows beneficiaries to receive and use funds from family 

members or trusts without adversely impacting beneficiary 

eligibilit. 

21(44)

Source: GAO survey of state Medicaid agencies. | GAO-18-179

a

In 2015, this amount was $733, minus a state-designated personal needs allowance.
Appendix IV: Events That States Defined as 

Critical Incidents

Page 42 GAO-18-179 Medicaid Assisted Living Services

Table 10: Events That States Defined as Critical Incidents 

Event

Yes a critical incident

Number of states

(percentage)

Not a critical incident

Number of states

(percentage)

Physical assault 48 (100.0%) 0 (0.0%)

Emotional abuse 48 (100.0) 0 (0.0)

Neglect 48 (100.0) 0 (0.0)

Sexual assault/abuse 48 (100.0) 0 (0.0)

Financial exploitation 47 (97.9) 1 (2.1)

Beneficiary missing/elopement 46 (95.8) 2 (4.2)

Unexpected/unexplained death 45 (93.8) 3 (6.3)

Police or doctor referral to Adult Protective Services 45 (93.8) 3 (6.3)

Injuries resulting in hospitalization 43 (89.6) 5 (10.4)

Unauthorized use of restraints 43 (89.6) 5 (10.4)

Unauthorized use of seclusion 42 (87.5) 6 (12.5)

Threat or attempt of suicide 41 (85.4) 7 (14.6)

Medication error 41 (85.4) 7 (14.6)

Suspected criminal activity by provider 40 (83.3) 8 (16.7)

Injuries needing medical attention, but not hospitalization 36 (75.0) 12 (25.0)

Natural disaster 34 (70.8) 14 (29.2)

Physical infrastructure issue 30 (62.5) 18 (37.5)

Discharge and eviction 24 (50.0) 24 (50.0)

Minor injuries not requiring medical attention 17 (35.4) 31 (64.6)

Source: GAO survey of state Medicaid agencies. | GAO-18-179

Note: Three states reported that they did not pay for assisted living services: Kentucky, Louisiana, 

and West Virginia.

Appendix IV: Events That States Defined as 

Critical Incidents
Appendix V: Comments from the Department 

of Health and Human Services

Page 43 GAO-18-179 Medicaid Assisted Living Services

Appendix V: Comments from the Department 

of Health and Human Services
Appendix V: Comments from the Department 

of Health and Human Services

Page 44 GAO-18-179 Medicaid Assisted Living Services
Appendix V: Comments from the Department 

of Health and Human Services

Page 45 GAO-18-179 Medicaid Assisted Living Services
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 46 GAO-18-179 Medicaid Assisted Living Services

Katherine M. Iritani, (202) 512-7114 or iritanik@gao.gov

In addition to the contact named above, Tim Bushfield and Christine 

Brudevold (Assistant Directors), Jennie Apter, Shirin Hormozi, Anne 

Hopewell, Kelsey Kreider, Perry Parsons, Vikki Porter, and Jennifer 

Whitworth made key contributions to this report.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100692)
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