[Senate Hearing 112-91]
[From the U.S. Government Publishing Office]





                                                         S. Hrg. 112-91

ASSISTED LIVING AT THE DAWN OF AMERICA'S ``AGE WAVE'': WHAT HAVE STATES 
             ACHIEVED AND HOW IS THE FEDERAL ROLE EVOLVING?

=======================================================================

                               ROUNDTABLE

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS


                             FIRST SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             MARCH 15, 2011

                               __________

                            Serial No. 112-2

         Printed for the use of the Special Committee on Aging








         Available via the World Wide Web: http://www.fdsys.gov


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                       SPECIAL COMMITTEE ON AGING

                     HERB KOHL, Wisconsin, Chairman

RON WYDEN, Oregon                    BOB CORKER, Tennessee
BILL NELSON, Florida                 SUSAN COLLINS, Maine
BOB CASEY, Pennsylvania              ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri           MARK KIRK III, Illnois
SHELDON WHITEHOUSE, Rhode Island     JERRY MORAN, Kansas
MARK UDAL, Colorado                  RONALD H. JOHNSON, Wisconsin
MICHAEL BENNET, Colorado             KELLY AYOTTE, New Hampshire
KRISTEN GILLIBRAND, New York         RICHARD SHELBY, Alabama
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut      SAXBY CHAMBLISS, Georgia
                              ----------                              
                 Debra Whitman, Majority Staff Director
             Michael Bassett, Ranking Member Staff Director









                                CONTENTS

                              ----------                              

                                                                   Page

Opening Statement of Senator Bob Corker..........................     1

                           PANEL OF WITNESSES

Susan Dentzer, editor-in-chief of Health Affairs.................     3
Josh Allen, a registered nurse and President of the American 
  Assisted Living Nurses Association.............................     4
Christy Allen, Assistant Commissioner for the Tennessee 
  Department of Health's Bureau of Health Licensure and 
  Regulation.....................................................     4
Eric Carlson, Directing Attorney for the National Senior Citizens 
  Law Center.....................................................     4
Krista Hughes, Director of the Arkansas Department of Human 
  Services Division of Aging and Adult Services..................     4
Howie Groff, President and CEO of Tealwood Care Centers, 
  Immediate Past Chair, National Center for Assisted Living......     4
Henry Claypool, Director of the Office on Disability at the 
  Department of Health and Human Services........................     5
Julie Strauss, Interim Administrator for the Office of Licensing 
  and Quality of Care with the Seniors and People with 
  Disabilities Division in Oregon................................     5
Patricia Will, Founder and CEO of Belmont Village Senior Living..     5
Barbara Edwards, Director of the Disabled and Elderly Health 
  Programs Group with the Federal Medicaid Program at CMS........     5
Kevin Coughlin, Director of the Bureau of Assisted Living in 
  Wisconsin......................................................     5
Charley Reed, a Member of the AARP Board of Directors and Chair 
  of the AARP Insurance Trust....................................     5
Larry Polivka, Executive Director of the Claude Pepper Center at 
  Florida State University.......................................     6
Irene Collins, Commissioner for the Alabama Department of Senior 
  Services.......................................................     6
Robert Jenkens, Director of the Green House Project..............     6
Michael Vaughn, Acting Director of Asset Management and Lender 
  Relations, Office of Residential Healthcare Facilities, U.S. 
  Department of Housing and Urban Development....................     6
Brenda Bacon, Vice Chair of Board of Directors of the Assisted 
  Living Federation of America and Preisdent and CEO of 
  Brandywine Senior Living.......................................     6
Barbara Lyons, Senior Vice President of the Henry J. Kaiser 
  Family Foundation and Director of the Kaiser Commission on 
  Medicaid and the Uninsured.....................................     7
Martha Roherty, Executive Director of the National Association of 
  States United for Aging and Disabilities.......................     7

                                APPENDIX

Participants' Biographies and Organization Information...........    52
Responses to Chairman and Ranking Member Questions...............    62

                  Statements Submitted for the Record:

Prepared Statement of Howie Groff, President and CEO of Tealwood 
  Care Centers, Immediate Past Chair, National Center for 
  Assisted Living................................................   205
Prepared Statement of Michael Vaughn, Acting Director of Asset 
  Management and Lender Relations, Office of Residential 
  Healthcare Facilities, U.S. Department of Housing and Urban 
  Development....................................................   224

            Additional Statements Submitted for the Record:

Freddie Mac......................................................   228
Charla S. Long, Creator and Director, TransformAging Program, 
  Lipscomb University............................................   230
Long Term Care Community Coalition...............................   235
National Association of States United for Aging and Disabilities.   239

 
ASSISTED LIVING AT THE DAWN OF AMERICA'S ``AGE WAVE'': WHAT HAVE STATES 
             ACHIEVED AND HOW IS THE FEDERAL ROLE EVOLVING?

                              ----------                              


                        TUESDAY, MARCH 15, 2011

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The roundtable was commenced at 1:01 p.m., in Room SH-216, 
Hart Senate Office Building.
    Present: Senators Kohl and Corker.
    Moderator: Susan Dentzer, editor-in-chief of Health Affairs

            OPENING STATEMENT OF SENATOR BOB CORKER

    Senator Corker. My name is Bob Corker. I am a Senator from 
Tennessee and used to be involved heavily in State government 
as Commissioner of Finance.
    I know Christy Allen is from Tennessee here, and I know 
that States all across our country have really been updating 
their State regulations as it relates to assisted living. All 
of you are here today to have a great roundtable.
    Senator Kohl is the chairman of the committee, and he is on 
his way. And I know all we are doing is kicking this off. The 
brain trust of people around this table are going to talk about 
many of the issues dealing with assisted living.
    But with 70 million folks coming along with the baby boom 
generation that I am a part of, and with all of the issues that 
I know we have to deal with, I am glad that you are here 
together. Assisted living has provided a great private-pay 
alternative for numbers of people. I know my parents have 
participated to a degree in that. Many of yours have done the 
same. Some of you may have done it yourself.
    But the fact is that it is a great time for you all to be 
here. Obviously, our budgets here are under tremendous strain. 
I think you know that. And having an option like this that is 
more affordable, that in many ways is mostly private pay, is 
something that is very good. And I know that each of you is 
going to be heavily involved in a great discussion for 3 hours. 
I know a lot is going to be learned, and I welcome you here to 
the Capitol.
    I think Chairman Kohl, I saw out of the corner of my eye, 
has just walked in. He is a great leader of the Aging 
Committee. I know he will have a few words of welcome. But I 
want to thank all of you who have come here to talk about this 
very important issue at a very important time, and we certainly 
look forward to what you have to say.
    Thank you very much.
    Thank you, Susan for moderating.
    The Chairman. Hello, Bob.
    Senator Corker. Hello, Chairman. I am going to step out and 
give you this seat. You will have much wiser things to say.
    The Chairman. Well, Bob Corker, you know, is a very 
accomplished businessman from Tennessee, and I have done some 
work in my life in the area of business also. So we have a lot 
in common.
    One way that I relate to people when they come to 
Washington from all different parts of the country is I ask 
them where they are from, and they say where they are from. And 
I say, ``Well, do you shop at the Kohl's store in that city?''
    [Laughter.]
    And so, we start a beautiful relationship and a friendship. 
I am from that family. Our family started the Kohl's stores way 
back--well, we started them in 1962, we opened our first Kohl's 
department store.
    That was, by coincidence, the same year that Wal-Mart 
opened their first store. They are much further ahead than we 
are. The family does not own the business anymore, but as 
matter of fact, my parents were immigrants from Europe. They 
came to the United States and met and married around the Great 
Depression. And in the late 1920s opened up a little grocery 
store on the south side of Milwaukee no bigger than a closet.
    And that was the beginning of the Kohl's stores. We were 
first a supermarket business and then a department store 
business.
    I worked at the Kohl's stores for many years, and I had a 
chance to be president for a while. And then the family decided 
they wanted to do something else with their lives. So the 
business got sold, and then I did one thing good, one thing 
bad.
    The good thing I did was run for the Senate. The bad thing 
I did was buy a basketball team.
    [Laughter.]
    I bought the Milwaukee Bucks, and that has been a lot of 
fun, too. But most of all, I am a public servant now, and I 
very much appreciate what I am doing. I know how important it 
is.
    And when we sold the business, I wondered what I would do 
with the rest of my life, but I certainly have found a calling 
that I like and enjoy. And I like serving people. I like 
dealing with problems and trying to find ways to improve the 
quality of lives of people in my State, but also around the 
country. So this has been a grand, grand experience for me.
    And we are so happy that you are all here today because 
assisted living, as you know, is a huge, huge part of American 
life, and it is becoming bigger and bigger. I think that 
assisted living in the years and decades to come is going to 
become enormous in terms of the purpose it serves in our 
country and how many people will be engaged in assisted living.
    And we will need all the expertise and the good ideas and 
thoughts that you have that we can possibly come up with in 
seeing to it that assisted living performs its function in our 
society in the best possible way, as it undoubtedly will have 
to be done increasingly and can be done very well. As you know, 
it can be a really nice way for people to grow older and live 
lives that are fulfilling.
    So it is well that you are here. And I know I have a 
Wisconsin guy, Kevin Coughlin, here, and we appreciate that you 
are here. We appreciate your role in assisted living in 
Wisconsin. You do a great job, and I am familiar with all the 
good things that you do in our State. Thank you so much for 
being here.
    And we have a great moderator. Thank you so much for your 
work.
    And I have a woman on my staff by the name of Anne 
Montgomery, who you probably know. She is as good as they come. 
When it comes to issues that are facing aging Americans, 
including assisted living issues, she is a very, very bright 
woman, works very hard, as you know, and she is always pushing 
me to do better. I am never doing good enough, which is what 
you want, I suppose. I suppose.
    [Laughter.]
    She is a good, good lady. And Deb Whitman is my head of the 
Aging Committee for me, and she has done an outstanding job 
also. So I am blessed that I work with them, and I am very 
blessed that you are here today. And I wish you well.
    On Tuesday, both parties have their weekly lunch. Senator 
Corker has his, and I have mine. So I will be leaving. But 
again, I thank you all for being here, and I wish you well.
    Ms. Dentzer. Thank you very much, Senator Kohl.
    And thanks to Senator Corker, who has now moved on to his 
weekly luncheon.
    Good afternoon, all of you. I am Susan Dentzer. I am the 
editor-in-chief of Health Affairs and happily was engaged by 
Anne and her colleagues to lead this roundtable discussion this 
afternoon.
    This is a roundtable, notwithstanding the configuration of 
the table that you see is rectangular. But it is roundtable in 
every sense of the word in that we really hope to engage all of 
you actively in today's discussion.
    As you see from the notes that we sent you on this meeting, 
we will be discussing three topics: the quality and oversight 
of assisted living, including, importantly, the area of 
consumer disclosure. We will range into affordability and 
reimbursement policies, including public financing through 
housing tax credits and subsidies and private payment 
supplementation. And then we will also spend some time on some 
access and discharge issues.
    We will be going until 4:00 p.m., and we have, as we say in 
television, a ``hard out'' at 4:00 p.m. We have to leave the 
room promptly at that point. So we are going to try to keep 
each of these discussions on track at a little less than an 
hour.
    We will take a 5-minute break after the second hour of 
conversation, and then we will resume for the last hour. And 
then, as I say, we will end promptly at 4:00 p.m.
    Just a couple of housekeeping details. When you speak 
today, please use your microphones. You are going to have to 
press this little button in front of you and make sure the red 
light comes on. And then those who run the audio-visuals here 
have asked me to make certain to tell you to log off at that 
point so that the mike can be passed to the next speaker.
    We are going to begin. Many of you, I think, are known to 
many of you, but not all of you are known to all of you. So we 
are going to try to move very swiftly through a round of 
introductions so that we can rectify that.
    What I would like to ask you to do is we will go around the 
room. We will start this way. And if you could just introduce 
yourself by name and title, and then maybe just a quick 
sentence about what in particular--what for you is the burning 
platform issue around assisted living that partly motivated you 
to be here today.
    And I am going to start with the family reunion we have up 
here, the Allen twins. Actually, there is no relation, as I 
understand it.
    Mr. Josh Allen. Not that we know of.
    Ms. Dentzer. Yes, right. None that you could trace, anyway. 
So, Josh, why don't you begin?
    Mr. Josh Allen. My name is Josh Allen. I am a registered 
nurse, and I am here to represent the American Assisted Living 
Nurses Association.
    Having quite literally grown up in the industry, with the 
family business and working as a corporate nurse for many 
years, the quality of care within assisted living is near and 
dear to my heart. I know that it can represent a wonderful 
model of housing and care for many older adults.
    Ms. Dentzer. Christy?
    Ms. Christy Allen. My name is Christy Allen. I am the 
Assistant Commissioner for the Tennessee Department of Health's 
Bureau of Health Licensure and Regulation. So I am one of those 
regulators.
    Organized within my bureau are about 22 different licensing 
boards, one of which is the board that licenses healthcare 
facilities, such as assisted care living facilities. The issue, 
first and foremost, for that board is to remain consistent with 
the assisted care living philosophy of promoting independence 
and individuality and aging in place while balancing and 
ensuring proper compliance with quality of care and life safety 
standards.
    Mr. Carlson. My name is Eric Carlson. I am with the 
National Senior Citizens Law Center. I have worked in long-term 
care for 20 years.
    My burning issue here is trying to articulate how a lot of 
these issues look from a consumer point of view. I have 
represented consumers for all of those times and have heard 
their real-life problems, and I want to be able to explain 
those to the best of my ability so that our public policy can 
better accommodate what folks need.
    Ms. Hughes. I am Krista Hughes, the director of the 
Arkansas Department of Human Services Division of Aging and 
Adult Services.
    I am here today concerned about quality of care, quality of 
life, and affordability issues for assisted living going 
forward.
    Mr. Groff. I am Howie Groff, President of Tealwood Care 
Centers. I am here today representing the National Center for 
Assisted Living as its past chair. The burning issue I think 
people need to understand is that assisted living is a dynamic, 
cost-effective, and resident-centered level of care that is 
very important to the entire long term care spectrum.
    [The prepared statement of Howie Groff appears in the 
Appendix on page 205.]
    Mr. Claypool. I am Henry Claypool, the director of the 
Office on Disability at the Department of Health and Human 
Services.
    And I am here really today, hopefully, to learn something 
from you all, as we really grapple with some of the needs of 
younger people with disabilities and those that are older. The 
mix is something that can be quite complex. A lot of the wisdom 
in the room today can help inform some of our work at HHS.
    Ms. Strauss. I am Julie Strauss. I am the interim 
administrator for the Office of Licensing and Quality of Care 
with the Seniors and People with Disabilities Division in 
Oregon.
    And to reiterate from the other States, quality of care, 
quality of life issues continue to be where we are most 
interested, as well as sustainable models for ensuring 
independence and choice.
    Ms. Will. I am Patricia Will. I am the founder and CEO of 
Belmont Village Senior Living, which operates assisted living 
communities in six States. I am here as the immediate past 
chair of the American Seniors Housing Association.
    We are principally interested in promoting quality, 
independence, and choice in our industry. But more than 
anything else, I am here today to collaborate with the various 
players at the table to find better answers. We call our 
industry ``a work in progress,'' where the answers come from 
the people in this room.
    Ms. Edwards. I am Barbara Edwards. I am the Director of the 
Disabled and Elderly Health Programs Group with the Federal 
Medicaid Program at CMS.
    I am here because, obviously, Medicaid is an important 
funder of long-term services and supports for many of frail 
elderly, but also younger persons who live with disabilities in 
our communities. We are very interested in learning how we can 
best align Federal policy in the Medicaid program to help 
States offer the kinds of options for individuals that promote 
independence, choice, and assure that they have the opportunity 
to live in their communities and fully participate.
    Thank you.
    Mr. Coughlin. Hi. I am Kevin Coughlin. I am the director of 
the Bureau of Assisted Living in Wisconsin.
    And I think what really I am interested in is really that 
whole quality discussion. I think there is a way that we can 
improve the quality in assisted living with a real 
collaborative approach. There needs to be a lot of people 
involved in this topic. So I am very interested to be here and 
to hear all the experts and what they have to say.
    Mr. Reed. My name is Charley Reed. I am from Washington 
State. I am a member of the AARP Board of Directors, and I used 
to be the director of the long-term care program in Washington 
State. I was involved in developing that program.
    And I am here representing consumer interests about 
assisted living. We are very interested in developing a good, 
high-quality service in the array of services for people to 
choose from in the community. And so, we are very interested in 
assisted living and whatever we can do to promote a high-
quality service.
    Mr. Polivka. My name is Larry Polivka. I am director of the 
Claude Pepper Center at Florida State University and a former 
director, like Charley, of the State Unit on Aging in Florida 
and have been long interested in assisted living and other 
community residential and alternatives in the long-term care 
system.
    And there are many burning issues. In fact, most of them 
are very much interrelated. But two that I have had in mind for 
over 20 years is how do you make this option as available as 
possible to low-income people, especially through the Medicaid 
program and through the waivers and maybe other approaches 
within Medicaid, and maintain a regulatory framework that 
doesn't have the program blur into some kind of slightly less 
regulated or costly nursing home program?
    And I think that is something that has become increasingly 
urgent as the program has expanded, including in the public 
sector.
    Ms. Collins. I am Irene Collins. I am the Commissioner for 
the Alabama Department of Senior Services.
    One of the things that I am very interested in hearing 
today is about this continuum of care, long-term care, and the 
role that assisted living actually plays in it and also a 
determination actually of what assisted living is.
    Mr. Jenkens. That is helpful.
    [Laughter.]
    I am Robert Jenkens with NCB Capital Impact. We are a D.C.-
based nonprofit who works with States and communities to 
develop innovations serving people with low incomes. I am the 
director of the Green House Project, which is working with many 
of the States that you represent here today to create a small 
home option for skilled nursing homes, as well as the former 
director for the Coming Home program, which worked with nine 
States to create affordable assisted living programs with the 
Medicaid agency, housing finance agency, and regulatory 
agencies.
    My burning issue is creating more affordable assisted 
living to serve people with the lowest incomes.
    Mr. Vaughn. My name is Michael Vaughn. I am with the 
Department of Housing and Urban Development, the Office of 
Housing and, specifically, the Office of Healthcare Programs. I 
am the director of asset management for the Office of 
Residential Care Facilities.
    [The prepared statement of Michael Vaughn appears in the 
Appendix on page 224.]
    And I am here to give some examples of how HUD funding 
enables affordable assisted living solutions in many different 
types and also to learn what we can do to work with the people 
we have heard from, from Robert and Kevin and the State people, 
and work with Barbara's organization to provide more solutions 
to provide affordable assisted living. Thank you.
    Ms. Bacon. Thank you. I am Brenda Bacon. I am Vice Chairman 
of the Assisted Living Federation of America and the CEO of 
Brandywine Senior Living. We own and operate assisted living 
communities in five States, and I am also a former regulator. 
So a lot of what I hear you talking about in terms of wanting 
to work with the assisted living communities and to provide 
access to seniors is something that very much resonates with 
me.
    I think assisted living is an excellent opportunity for 
seniors to have choice about where to live when they can no 
longer live at home or no longer want to live with their 
families but want to still have the independence and the 
quality of life of being at home.
    Ms. Lyons. I am Barbara Lyons, a senior vice president with 
the Kaiser Family Foundation and director of the Kaiser 
Commission on Medicaid and the Uninsured. The commission has 
tracked coverage and financing issues in the Medicaid program 
over the past two decades.
    So I am here because assisted living is part of the long-
term care continuum, and on the commission, we are interested 
in how delivery of long-term care services is changing over 
time and what that means for the people served by the program.
    Ms. Roherty. Last, but not least. I am Martha Roherty, and 
I am the executive director of NASUAD, and that is the 
organization that represents the State agencies on aging and 
disabilities.
    And I am here for a couple of reasons, one of which is that 
our agencies administer the Medicaid waiver program for the 
most part. All of our State agencies also help to provide 
options counseling for long-term services and supports for the 
consumers, both public and private pay. And so, obviously, 
assisted living is one of the most important options in that 
long-term services and supports array of services.
    And also because our agencies help to administer the 
ombudsman program, and this is one of the confusing areas with 
the long-term care ombudsman program.
    Ms. Bacon. Susan.
    Ms. Dentzer. Thank you, Brenda. And thanks to all of you. 
As you can see, we have a great group assembled to deal with 
these issues across various spectrums--from the consumer 
standpoint, from the provider standpoint, from the regulator 
standpoint, and those who also are looking at the big picture.
    What we are going to do now is move into our first pod of 
questions to discuss, if you will. And this is the general area 
of quality and oversight. We are going to talk about what some 
of the leading State models are with respect to consumer 
disclosure standards.
    We will talk a bit about what are--answering the question, 
``What is assisted living?'' What are the essential services, 
the core philosophy, the other characteristics of assisted 
living that allow this combination of independence and privacy 
and autonomy and choice?
    We are going to talk about ways that States have developed 
to balance the issue of quality of assisted living services 
under Medicaid in particular, while not treating it differently 
from other home and community-based services and the role of 
State oversight.
    We want to talk about whether there are any key physical 
plant features that distinguish assisted living from 
institutional nursing facility models. We would like to bring 
up the topic of whether there should be a Federal floor in 
terms of services that are offered by Medicaid-participated 
assisted living facilities, and also should there be a Federal 
ceiling, a maximum level of care that would distinguish 
assisted living from independent living with home care 
services?
    And then, finally, a topic we would like to get to, 
assuming there is time, is are there any minimum explicit or 
implicit Federal expectations or requirements for State 
oversight and monitoring of assisted living?
    So, with that, what I would like to do now is turn to some 
of our colleagues who come from State government to begin to 
talk about some of this, starting with, for example, the 
essential services, the core philosophy, and so on, answering 
the question, ``What is the definition of assisted living in 
your State?'' And then moving on to some of these other 
issues--consumer disclosure standards, et cetera.
    And so, Christy, Irene, Kevin, and Krista, as our 
representatives from the States, why don't you begin? And 
Christy, let us start with you.
    Ms. Christy Allen. Sure. I will. We were talking 
beforehand. In the State of Tennessee, our oversight of the 
long-term care system is shared among several different 
agencies. There is the Department of Health that is responsible 
for the licensure and the annual survey process.
    So my piece of it is almost purely regulatory. We do work 
closely, though, with our Department of Finance and 
Administration's TennCare Bureau, which is the Medicaid 
administrator for the State.
    Over the last couple of years, collectively, we have made 
some great strides in making assisted care more available to 
more people through the CHOICES program and then, last year, 
through the implementation of a new licensure law for adult 
care homes, which accept traumatic brain injury patients and 
ventilator-dependent patients.
    That is a very, very new program. We have received one 
application. I think the idea is that over time it will grow, 
and I know that Oregon was a model for us in connection with 
that.
    One critical area of the law that has helped get the board 
to start thinking differently about long-term care was the 
ability for a hospice patient to be admitted to and remain in 
assisted living so long as the facility could properly care for 
the resident's needs. And that sort of leads me into a 
discussion about what makes assisted living philosophically 
different from the other types of facilities that we regulate 
in my department?
    One of the key examples is in staffing requirements, where, 
for nursing homes, there is a rigid staffing requirement set 
out in the law and then repeated in the rules. For assisted 
living, there need only be a responsible attendant, as defined 
by the law, and whatever staff is appropriate to all of the 
residents' level of need.
    So that gives the facilities more flexibility in being able 
to develop individualized plans of care, the idea being that 
each resident will get the level of care that is appropriate to 
him or her and allow him or her to age in place in that 
facility. We have had a lot of discussions in the State about 
that, the overall idea being to retain as much independence as 
possible.
    One thing that I looked at before I came up today was sort 
of a comparison between different facility types and 
enforcement. Nursing home enforcement, nearly every--I will 
take that back. Many, many surveys result in several, several 
violations. We don't see that as much with assisted care living 
facilities.
    I think during calendar year 2010, there were only a few 
substantiated complaints. And of those, they resulted in under 
$10,000 total civil penalties. So that tells me that the 
regulations are probably appropriate to the type of facility 
and that facilities are meeting those regulations.
    I don't know if that is sort of what you were looking for, 
but I feel like that is a good balance. There are still 
applicable building and life safety standards. People still 
need to be able to get out in case of a fire. But they aren't 
as rigid as they are for some other facility types. So, you 
know, somebody who is in assisted living can have assistance to 
get out. They don't have to ambulate out on their own.
    Ms. Dentzer. And do you want to take up some of the topics 
about floors on services or ceilings on services? Is any of 
that dealt with in State statute?
    Ms. Christy Allen. That is not within any of our regulatory 
piece of the statute. Ours is purely minimum standards for 
licensure and minimum standards for quality of care.
    The payment aspect of it happens over with our TennCare 
oversight bureau. I am sorry, with our TennCare bureau, and it 
is primarily through the CHOICES program. And they do set that, 
I believe, in their rules every so often. They do look at that 
every year. But you will have to come back to me on that one.
    Ms. Dentzer. And in terms of the requirements for State 
oversight and monitoring, are the inspections required? How 
often? What is the----
    Ms. Christy Allen. The inspections are required annually. 
There is an annual licensure requirement. So like every other 
facility that is licensed, an inspection will take place every 
12 to 15 months. And any failure to comply with all of the 
standards that are adopted results in the facility being asked 
to submit a plan of correction within a certain period of time. 
And if they don't, then there are penalties that can 
potentially accrue.
    What we find is that when notified prior to leaving the 
facility of the deficiencies, they correct them. And again, I 
think, you know, in nursing homes you find a lot of 
deficiencies related to staffing ratios. You don't find that in 
assisted living, so long as there is an appropriate level of 
care.
    Similarly, there is a lot of emphasis in the Tennessee 
rules on the collaborative care plan. The physician working 
with the assisted care living facility, if appropriate, with 
the hospice provider, if that is involved as well. So that it 
is a personalized care plan with the oversight of the 
resident's physician.
    Ms. Dentzer. Okay. And then just finally to clarify, you 
mentioned the adult care homes.
    Ms. Christy Allen. Yes.
    Ms. Dentzer. That is a separate category, separate and 
distinct from assisted living, even though it is going to look 
and smell a lot like assisted living, it sounds like?
    Ms. Christy Allen. It will look like it, but it is very 
different. It is there are single-family residences in which 
24-hour residential care, including assistance with activities 
of daily living, is provided in a home-like environment to no 
more than five elderly or disabled adults.
    So it is almost like it is a combination of the Green House 
model with an assisted living model, and it is a small home, 
single-family residence. And I think the intent is that people 
will care for people not related to them in a very small number 
and create as much of a home-like environment as possible.
    Again, that is very new. We have one pending application. I 
look forward to seeing how that program grows over time.
    Ms. Dentzer. Great. Okay. Well, thank you very much.
    Let us move on to Krista, and give us a sense of the lay of 
the land in Arkansas, Krista, if you would?
    Ms. Hughes. In Arkansas, the licensure and regulatory 
agency for the assisted living industry is the Office of Long-
Term Care, which is located within the Division of Medical 
Services, or the Medicaid agency.
    We in the Division of Aging and Adult Services administer 
the Medicaid waiver, called Living Choices, and so we operate 
with an interagency agreement with Medicaid, and we have to 
stipulate how we ensure the quality of care, how we ensure 
qualified providers, the plan of care, the annual level of care 
determinations, and the financial accountability of the 
providers. That is pretty much our role.
    One of the things that--and just correct me if I get off 
base from what you are wanting. When I started looking at the 
regulations, you know, I actually managed some assisted living 
properties in a former life. And so, you read them from 
different perspectives, depending on what hat you are wearing, 
and I had to brush up on this.
    And what I noticed when I started looking at the 
regulations, we have a different set of regulations for 
residential care facilities, which were our 1970s version of 
boarding care homes and the preemptive entity for what is now 
assisted living. But we still have regulations governing 
residential care facilities. There is a moratorium on the 
development of any residential care facilities in Arkansas, 
going forward.
    Then we also have two different levels of care for assisted 
living in our State. We have Assisted Living Level I. That has 
its own separate regulations. And then we have Assisted Living 
Level II, which does bring in nursing services into the 
assisted living facility. That has a separate set of 
regulations.
    So I didn't bring my regulations. There are a lot of them. 
But what I did notice in reading them is that, philosophically, 
the assisted living regulations, it just has totally different 
language. It speaks to self-direction, the personal decision-
making authority. It speaks to the configuration of the 
apartment being such that it maximizes one's choice and chance 
for independent living.
    I mean just the entire set, throughout the entire set of 
the regulations, the wordage is just so utterly different. So 
that is the philosophy. I am trying to go through my notes. So 
that is the philosophy.
    Ms. Dentzer. No, very helpful.
    Ms. Hughes. In terms of core services, we do have core 
services stipulated, and that includes 24-hour staff; 
assistance with obtaining emergency care; assistance with 
social, recreational, and other services; assistance with 
obtaining transportation; linen service; and three meals a day. 
So that is our base or the floor. In addition to that, 
facilities can provide other services on a negotiated basis 
with an individual and their families.
    We, like Tennessee, have a flexible staffing pattern within 
the regulations, but we do have a floor on that as well. So, 
regardless, we do say ``staff to meet your needs,'' but we also 
do have a floor for the staffing as well.
    Arkansas does, by law, require a disclosure statement, and 
the disclosure statement has to speak to--is that me? I am 
going to try that.
    Okay. The disclosure speaks to that you have to show that 
you are licensed. You have to show what services you provide. 
All of this is in advance to any level of move-in. The services 
have to stipulate, the ones that I just mentioned, the core 
services and any others that can be negotiated. It speaks to 
staffing, what is required in the regulations what you have in 
your facility.
    It also stipulates that you have to tell whether or not 
your staff can sleep on the premise, which I found interesting. 
And it then speaks to physical plant features of your building, 
whether or not you are sprinkled. If so, to what degree. Do you 
have smoke detectors? Where are they? Do you have an emergency 
evacuation plan, and what is it?
    So that is primarily for general facilities. And then on 
top of that, we have specialty care units, Alzheimer's 
specialty care units, and there is a separate disclosure 
statement for those. And it goes more, the very first one, in 
fact, stipulates you have to discuss your philosophy of care 
and the services, your therapeutic interventions, the level of 
training that your staff have. You know, just several different 
things in addition to the regular disclosure statement.
    Ms. Dentzer. Let us move to Kevin. Sorry. Violating my own 
rule here. I think you heard that. So, Kevin, please take it 
away.
    Mr. Coughlin. All right. Thanks, Susan.
    You know, I think, starting out with the essentials of 
assisted living, in our State, we don't have the term 
``assisted living'' in any of our regulations, but we have 
three models that sort of fall under that umbrella. I am mostly 
going to talk about the residential care apartment complex 
because that is one of our newest models that came more out of 
some of the new way of thinking of assisted living.
    But I think some of the essentials are many things that 
Krista talked about with self-direction, independence, 
accessibility, home-like. The provisions of care need to 
include personal care, supportive care, and nursing care. And 
there is within the regulations the ability to age in place.
    And I think with assisted living, it is important that we 
don't sort of force all assisted living to have to do certain 
things. I think the beauty of assisted living is communities 
can sort of define the type of care that they can provide and 
can become experts in that area. And then they don't get 
themselves into problems with not being able to provide some of 
the provisions that do take place with aging.
    So there is that ability to have both aging in place or to 
have certain things that could happen that could potentially 
lead to a discharge. And I think that is where that disclosure 
statement is very important, that when that does occur that we 
do have good disclosure statements.
    Wisconsin does not have a regulation for disclosure 
statements, but it is captured in the admission agreements. A 
lot of that information does have to be disclosed in those 
admission agreements.
    And I think one of the things I do want to talk about is 
sort of that quality oversight. And what we have really focused 
on in Wisconsin is that all agencies that are involved with 
assisted living have a role in quality, and it is not just the 
regulatory agency. But with regulations, we have tried to 
develop a new model that looks at both regulatory oversight, 
along with providing technical assistance.
    What we have found is some of our surveyors are some of the 
best experts in this field, and they can offer a lot to the 
assisted living communities. So we have integrated technical 
assistance as part of our survey process, and we have also done 
a ``one size does not fit all'' in this setting. And we have 
had a less-intensive survey process for those communities that 
really have shown compliance, good compliance history with us. 
We go back on consecutive surveys and they are still in good 
compliance, they can reach sort of a less-restrictive 
oversight.
    And what that has allowed us to do is really focus on some 
of the communities in our State that aren't doing as well, and 
we have been able to really shift those resources and also 
using very creative enforcement action sanctions that can help 
a facility fix their systems to sustain compliance or a very 
progressive enforcement action that could lead to these people 
not doing this business because if they continue to harm our 
citizens, they shouldn't be in this field.
    And I think sort of with that process, we have also done a 
lot with collaboration, sharing our information with lots of 
different stakeholders. We have a very good relationship with 
the Medicaid program. They get all of our inspection reports. 
And what we have found is that has also built quality, where 
they are no longer publicly funding individuals in a facility 
that does not have good compliance history.
    That, as well as our advocacy groups. We have a very strong 
relationship with our ombudsman program. Wisconsin ombudsmen 
have been in assisted living for a very long time, and working 
together with the ombudsman program, again, has allowed us to 
help improve the overall quality. The ombudsmen get in and do a 
lot of training, providing technical assistance to the 
industry.
    And then also collaboration with our assisted living 
associations and the communities, sort of getting this all on 
the same page. I think as we have developed respectful 
relationships, we have been able to tackle some very difficult 
issues that have come down in this field. The whole thing about 
how much nursing should be in assisted living, how can we get 
better standards of practice implemented.
    And I think the biggest part is really trying to get 
quality, the assisted living communities themselves to do real, 
internal quality assurance, quality improvement within their 
own organization because that is where it is going to really 
happen. And if we can, as a State regulatory agent, be a change 
agent in that area, we can help do that.
    So that is kind of one of the big areas that I think has 
helped in Wisconsin is that collaboration across all spectrums. 
And I just want to kind of end with a statistic that we have 
had 31 consecutive years of growth in assisted living, and in 
the last 8 years, we have had a 50 percent increase in the 
number of beds in assisted living.
    And at the same time, we have had a 40 percent decrease in 
the number of the incidents of complaints. And for that to sort 
of happen, actually, and it happened during a time where we 
introduced the 1-800 number and an online complaint number. So, 
for that to happen, I think it is showing that there is a real 
positive movement toward improved quality in our State.
    Ms. Collins. I am left handed. There we go.
    In Alabama, we have the regulatory agency is our State 
health department. These are their regulations, which they are 
currently in the process of updating. So we are excited about 
that. Our assisted living association is certainly working with 
them, along with others that are very interested in assisted 
living.
    We do not have any of our Medicaid dollars paying for our 
assisted living beds. We have two types of assisted living, if 
you will. One is just a standard assisted living, which can be 
any array of situations, and that is all of these are licensed. 
But the SCALF assisted living, which is specialty care, is one 
that has to come through and be approved through our 
Certificate of Need Board to get beds in that. Both of those 
are under the purview of the health department.
    The surveys that are conducted through these different 
assisted living groups are done by nurses through the health 
department. However, like Kevin and others have said, we also 
have in our agency the ombudsman program, which is a huge role 
in overseeing. They are in there at least twice a year, in all 
of the facilities that we have across the State.
    We have about 10,000 assisted living beds in our State. 
They are, as I said earlier, different types of structures. So 
there are definite rules and regulations about the way the 
facility has to operate, about the staff that operates, the 
administration that takes place. And again, as has been 
mentioned earlier, we are very much concerned about the 
individual's rights and the ability to have a continuum of care 
in the manner in which they choose.
    So this is going to be something that I think we will 
probably hear today quite a bit from all of the agencies that 
are represented.
    Ms. Dentzer. Well, all of you have struck--I will get this 
right eventually here. All of you have struck some common 
themes about the independence focus, the quality of life focus 
that you want to preserve intact in assisted living. And what I 
would like to do is move to a discussion of how that squares 
with whether----
    Oh, I am sorry. Julie, my apologies. Thank you. I have been 
prompted. I didn't mean to cut off representation from Oregon. 
So, please.
    Ms. Strauss. That is okay. So, Oregon, we are very, very 
proud of the fact we had the first home- and community-based 
waiver. In Oregon, we currently serve 23,000 people in the 
waiver. Only 4,700 people in nursing facilities. So we have a 
very exciting community-based care system.
    As far as you asked the characteristics of an assisted 
living facility versus another community-based setting, our 
assisted living facilities are required to be at least an 
economy apartment. They have to have their own bathroom. They 
have to have a kitchenette. We do have a floor of services that 
are required to be provided. We do not have a ceiling.
    We have a uniform disclosure statement that we use. It is a 
standardized form by the agency, and then we have a specific 
set of criteria that must also be in the resident agreement, 
which includes the move-out protocols, the services that are 
available, as well as any fees, deposits, and it has to list 
the resident rights, as we have in our rules with regard to the 
bill of rights for residents.
    That being said, right now in assisted living facilities in 
Oregon, 40 percent of the residents are Medicaid eligible. So 
we feel very strongly about the issue of access to independent 
and high-quality, high-choice facilities.
    We do both a policy--in the area that I work, we do both 
the policy. We do the Medicaid contract. And we do the 
surveying. And so, we are in the facilities every 24 months, 
and we use a regular oversight process, as stipulated. And we 
work together with the industry and the advocates to come up 
with the guidelines and the principles for the monitoring of 
that facility.
    Like Wisconsin, we see partnerships in the ombudsman's 
office, as well as in the Medicaid case managers at the local 
level. Everyone has a responsibility to have eyes and ears and 
everything else to help make sure that quality is happening.
    In addition to that, I wanted to mention one of the reasons 
that we believe that Oregon is very, very successful with our 
community-based care is a progressive nurse delegation policy 
that we have that enables our facilities to better serve 
clients with lay staff who have oversight and delegation by a 
trained RN and the documentation as such.
    Ms. Dentzer. Say a little bit more about what exactly that 
is and what it means.
    Ms. Strauss. What nurse delegation is? Nurse delegation is 
by State law, we have stipulated what services that are 
regularly administered by a registered nurse, can be delegated 
to a non-RN. So the nurse explains the task and then monitors 
as an individual performs the task to ensure that a resident is 
safe. And then the nurse goes in and regularly checks to ensure 
that the delegation is appropriate and occurring and reviewing 
change of condition.
    We do have other forms of what might be considered assisted 
living, but in Oregon, we stipulate in our rules what 
constitutes an assisted living facility different than our 
residential care facilities, which are a congregate living, 
that they exist under the same rules. And I think that is it.
    Ms. Dentzer. Okay. Great. Well, thank you, again, all of 
you.
    As I was saying, there are obviously some points of 
convergence here in terms of the desire to create choice and 
sense of autonomy, et cetera. There are also some differences 
among the various States in terms of who does the regulating, 
what the degree of regulation is, et cetera.
    I want to just move to the question of how this intersects 
with Federal expectations or requirements. Are there any 
minimum explicit or implicit Federal expectations or 
requirements for State oversight and monitoring of assisted 
living? Should there be?
    How does this--if we were to think about this going 
forward, how would this be structured, et cetera? And maybe 
Barbara and perhaps Henry would want to speak to some of that 
with respect to older populations as well as younger disabled 
populations?
    Ms. Edwards. Well, here is where it starts to get even more 
complicated. We have already heard different approaches, and I 
don't know that we know that every State even licenses assisted 
living specifically. So lots of difference at the State level.
    And one of the interesting elements now is that Medicaid is 
a fairly important funder of services for individuals in the 
community, doesn't have an assisted living service, doesn't 
define assisted living, doesn't define what an assisted living 
facility is, doesn't define a group home, doesn't define--that 
is not the way the Medicaid program is structured.
    So from the Medicaid program perspective, what we have are 
services that can be made available to individuals by States 
through the State plan or through waiver programs that offer 
alternatives to institutions. So we have institutions that are 
defined, and those are the places where Medicaid services can 
be provided, including room and board. And then over the years, 
Congress has made more options for States to offer people with 
alternatives to institutional services for long-term services 
and supports, but there is not a definition of those settings 
and those issues.
    What the law tends to refer to is home and community based 
or noninstitutional. And within that, then there are a very 
broad array of services that can be offered by States to 
individuals who meet certain need levels that are defined by 
the State, and those services can be provided.
    So trying to think how to be helpful on this, the issue we 
tend to wrestle with in our policy tends to be more about what 
is home and community based? What are the characteristics of a 
home- and community-based housing and residential option versus 
what is institutional?
    And there is one place in our guidance where we have 
specifically referenced assisted living services. That is in 
our 1915(c) waiver application and guidance. And in that case, 
what we are really describing there is a bundle of services 
that could be delivered to individuals who might be residing in 
a particular type of facility. And in the guidance, the 
facility is referred to as--actually isn't really described. It 
is more the bundle of services that are available to that 
individual in that setting.
    We ask States that, if the settings are larger facilities, 
that they describe how they are going to assure home and 
community--that, in fact, there are home and community 
characteristics for that individual's experience in that 
residence. So that makes this a difficult, to some extent, an 
issue or makes it flexible because States can define how they 
regulate their housing. And then the Medicaid services can fit 
into those settings in a fairly flexible set of ways.
    So we have actually made more comment in guidance with 
regard to the characteristics of the setting than we have not 
by name, but just the characteristics of what is home and 
community based and what we are looking and what we perhaps 
would not be looking for. So if that is helpful, I can share 
some of that. But we don't come at it from the same 
perspective.
    Ms. Dentzer. For all intents and purposes, assisted living 
is home or community based for----
    Ms. Edwards. Services, there are some services in Medicaid 
that are to be delivered to individuals who are living in a 
home- and community-based setting. So I would put it this way. 
For assisted living to qualify as a place in which those 
services could be reimbursed by Medicaid, that assisted living 
facility would have to have the characteristics of home and 
community.
    So that is what becomes important is what is the experience 
of care for the individual who is living there? Is it a home- 
and community-based setting, or is it more of an institutional 
setting? And for us, home and community based means person 
centered rather than provider centered. It means that it is 
home-like, and we have sometimes offered examples of what we 
think home-like means.
    Access to privacy, a lockable apartment, access to 
facilities that are normally available in a home--a kitchen, 
bathroom, eating--that people have the ability to come and go, 
that they have the ability to participate in community 
activities in an unscheduled way. In other words, that the 
provider doesn't decide when individuals will go into the 
community, but individuals can have some choice in that, in 
those decisions, and that in an assisted living we would assume 
then there might be some assistance with those choices, but 
that individuals have a significant amount of ability to direct 
their own life and their experience of their community 
integration.
    So we are interested in those characteristics of the home. 
And on the basis of that, Medicaid services to support that 
individual can be made available by the State.
    Ms. Dentzer. Has there ever been an instance where an 
assisted living facility was judged to be institutional, and 
therefore, services to a person in that setting could not be 
provided, to your knowledge?
    Ms. Edwards. I am not sure I can speak to that directly. 
Again, States identify the housing options that are made 
available to individuals, and we ask that they help us 
understand how they assure home and community nature of those 
settings.
    There are certainly some cases where we might not think a 
setting looks like it is home and community based. But we, at 
this point, don't have regulation that defines what those look 
like, and it certainly isn't done by the name of the 
institution or the facility. Again, we don't define what an 
assisted living facility is, nor a group home specifically. So, 
instead, we are looking at the characteristics.
    We are, and I want to sort of stress that we are in a 
regulatory development process at CMCS with regard to a variety 
of Affordable Care Act provisions that expand State options 
with regard to home- and community-based services. And so, I 
can't comment a lot about what we are thinking about in terms 
of guidance.
    We have issued a new set of proposed regulations around 
community first choice. That at least begins to lay out some 
proposed regulations that might have some impact, and again, we 
are in the process of inviting comment from all interested 
parties. And so, again, I can't comment a lot on how we are 
developing policy. I can talk a little bit about the dialogue 
we have had with stakeholders in the past through advance 
notice of proposed rulemaking that was issued in 2009 and some 
of the comment and dialogue we have had around that.
    So this is an area of great interest to us and great 
interest to stakeholders, to States, to individuals, to 
providers, and we really do welcome--we have had a rich 
dialogue with individuals about what it means to be home and 
community based. What we have learned is that there is not 
consensus about what that means, that sometimes preferences 
vary on the basis of age.
    Sometimes preferences vary even from community to community 
within individuals with disability. We may hear sort of a 
strong view from individuals who represent or are people with 
cognitive or with developmental disabilities. We hear different 
things from people who represent those who are elderly. We hear 
different things from individuals who are younger adults with 
physical disabilities.
    And the challenge for Medicaid is to develop policy that 
assures access to services across all of those populations in a 
way that is reasonable and we think reflects the intent of the 
law.
    Ms. Dentzer. Great. Thank you.
    Henry.
    Mr. Claypool. Well, Barbara has covered quite a bit of 
ground there. So maybe I will pick a few points to underscore 
how we think about assisted living and the tensions that the 
Medicaid program confronts when it is asked to finance these 
services.
    I offer a disability perspective. Home- and community-based 
services arguably came out of the need to have an alternative 
to an institutional setting for people, and many of them were 
people with disabilities. And perhaps most notable in that 
group is individuals with developmental disabilities and their 
need to move from large institutional settings to home- and 
community-based settings that serve people with developmental 
and intellectual disabilities.
    And that movement, I think, has shown that the level of 
care, the types of needs that individuals have, and our ability 
to serve them in the community can vary, from individual's 
families choices and preferences. But we hear from individuals 
with developmental disabilities and their advocates that we 
should continue this movement toward smaller, more integrated 
settings to serve individuals with developmental and 
intellectual disabilities.
    The same can be said for individuals with physical 
disabilities that, some unfortunately, may end up in an 
institutional setting like a nursing home when there is a lack 
of service or an unavailability of housing, which results in 
their institutionalization.
    And we hear often from the advocates and some of the 
service providers that there is a need to move away from 
providing nursing home services, but that the home- and 
community-based services need to have specific characteristics. 
There is a strong preference for individualized community-based 
arrangement.
    People with disabilities that are younger or on a different 
trajectory in their life's needs, and they do not want to be 
institutionalized, maximize their independence by living in a 
community-based setting where they will have full access to 
community supports, et cetera.
    And then, on the other end, I see an aging population that 
is losing some function perhaps and interested in building a 
support system that will allow them to maintain their 
independence as long as possible and forestall what has been 
assumed in our society that one goes to a nursing home when 
your needs are such.
    And these two are perhaps not in conflict, but they need to 
be reconciled. And the place that they end up being reconciled 
oftentimes is in Medicaid policy, and it creates a real 
challenge for the agency to align its policies in such a way 
that accommodates all the interests, preferences, and choices 
of these individuals.
    It is interesting, though, when I hear the States going 
around and talking about the kind of the values that they hold 
around their assisted living systems that they articulate many 
of the things, obviously, that we hear from home- and 
community-based services advocates. But I would offer up the 
concept of a person-centered planning process. I don't know if 
it exists in many of the States already.
    But this concept that Barb has mentioned does allow the 
individual to articulate their needs and talk about what their 
expectations are for the future. And it is, I think, a very 
empowering model that really does help move towards things like 
self-direction or greater independence on the part of the 
individual.
    So there is much more that I think we can touch on, but I 
will let Susan get back to addressing some of the issues at 
hand.
    Ms. Dentzer. Thank you, Henry, for that very helpful 
perspective.
    Believe it or not, we have already exhausted our first 
hour. But I don't want to let this go without asking Barbara 
Lyons just perhaps to offer some comments from the perspective 
of the Kaiser Commission and your own expert perspective.
    As you look across the States and think about Federal 
policy, Medicaid policy, obviously, a greater shift toward 
home- and community-based services overall, and particularly in 
the context of the Affordable Care Act, what rises to the 
surface for you as issues?
    Ms. Lyons. Yes, thanks, Susan.
    Let me just start by saying what I was struck by, as we 
were going around with the States, is again the variation that 
exists out there across the States and within the Medicaid 
program. There is always just a tremendous amount of variation.
    As we have tracked long-term care services and supports, 
particularly over the past decade, I think it is important to 
at least acknowledge the really significant growth that we have 
seen in home- and community-based services. It has been, you 
know, pretty phenomenal over this past decade. That is one of 
the most fastest-growing parts of the Medicaid program if we 
look over the last decade.
    Whereas, on the institutional side, we have seen virtually 
no growth over the last decade. It has remained very flat. So I 
think that that kind of progress is important and moving in the 
direction that both folks under 65 and over 65 want to go in, 
in terms of where they are served and able to live and 
function. So that is pretty important.
    When we look at the data and break it apart a little bit, 
we do see a difference between the under 65 population and the 
seniors in that, as Henry described, the under 65 population 
making that transition much more readily than what we see among 
seniors. And to some extent, that reflects the supports that 
are out there for the under 65 population, for seniors who are 
aging, and they often don't have the supports in the community.
    And as we have looked at different home- and community-
based waivers and programs that are out there, the two things 
that just really stick out for us in terms of enabling people 
to stay in the community are, number one, housing. Just 
couldn't be more critical for folks. As we looked at Money 
Follows the Person programs, that housing and ability to 
connect the Medicaid agency with the housing agencies at the 
local level is just absolutely pivotal.
    And then the second factor that is really critical are the 
workers. And so, I was interested in Julie's comments about the 
nurse delegation because having the workers to assist people 
when they need it in the community is, again, just another 
really, really critical aspect for moving forward.
    The ACA does present opportunities for States to continue 
to move in this direction. But I would be remiss if I didn't 
say that right now there is this huge budget crisis at the 
State level, which has, I would say, dampened some of the 
progress that we have seen moving forward over the past year, 
as States have wrestled with the economic impact of the 
recession.
    Still, I think the goal is to move forward and keep moving 
in the direction of making more community-based services 
available going forward. And so, as States and the Federal 
Government deal with this crisis, we would hope not to lose 
ground in the interim.
    So I will stop there. Thank you.
    Ms. Dentzer. Well, thank you all, and you can begin to see 
how difficult it is to wade deeply into this topic in a short 
time frame.
    We are going to move to the next area of discussion, 
though, now, which is essentially dealing with the question of 
the supply of assisted living in the sense that do we have any 
estimate of a national demand for affordable assisted living? 
Is there any Federal program that calculates this, or have we 
begun to even think through what the role of affordable 
assisted living broadly should be in the context of not just 
the move to home- and community-based services, but the aging 
of the baby boom, as has been mentioned.
    What are the primary sources of Federal funding that can be 
used for the development of affordable assisted living? Grants, 
tax credits, et cetera. Does the Federal Government, in fact, 
have more plans to develop more assisted living for residents 
who are living in subsidized housing?
    So those are the kinds of questions we have to verge into 
here. And then, of course, not just dealing with the Federal, 
how are the States approaching the challenge of developing 
affordable assisted living?
    So, with that, Michael Vaughn, why don't you talk a bit 
about HUD's role in all of this?
    Mr. Vaughn. Well, HUD has two main areas where we intersect 
with this sector. The first is in our own inventory of public, 
Section 8, Section 202 affordable housing. And in that area, we 
have been working to expand the range of home and community 
services. We have been successful in broadening the options 
available under the Section 202 program.
    And I said I would give some examples. I wanted to give one 
in that aspect. In Columbus, Ohio, we had a 202 project called 
InCare Suites. It was a $3.5 million award of a grant for a 39-
unit independent living community. The residents, 69 percent of 
the residents were Medicaid eligible. And of the 39 households, 
some were active and independent. Ten percent had actually left 
a nursing home, and quite a few were receiving intensive 
Medicaid home- and community-based services.
    So we are trying to broaden the newer aspects of assisted 
living, as Barbara mentioned and Henry mentioned, to our 
overall inventory.
    The second main area where we are involved is more in the 
construction of traditional--and financing of traditional 
assisted living facilities that are affordable. And I think in 
introducing, you said, well, what is the Federal Government 
doing, and what are the States doing? It has all got to be 
together, it doesn't happen at all is, I think, what we have 
found.
    We have low income tax credits, obviously, from the 
Department of the Treasury. They are an important aspect of all 
of these. Home grants from HUD that most of these go toward 
traditional affordable housing, family affordable housing. But 
also some of them are used for elderly, which can have these 
home- and community-based services, or for pure assisted 
living.
    Our Section 202 program, again, is a program for the 
elderly. Section 811 for people with disabilities as well. 
Approximately $350 million annually from HUD. And of course, 
that program has faced budget pressures. These can be combined 
with other programs from the State.
    The office I am in oversees the insurance, mortgage 
insurance under the Section 232 program. We have insured $17.1 
billion in residential care facilities. Two-thirds of them are 
nursing homes. Approximately $5 billion of that is new 
facilities.
    We have had a tremendous increase in demand for the 
program. We have gone from about 200 or so applications a year 
to over 700. We have had a lot of trouble keeping up with it, 
but we have recently made the decision to prioritize projects 
with tax credits associated.
    I don't know if a lot of people know this, but HUD has a 
Section 542 risk-sharing program that is administered primarily 
by the State housing finance agencies. We partner with them, 
and we take a 50/50 risk. A number of the projects done under 
that program have been--37 of them--for affordable assisted 
living facilities.
    Public housing authorities in HUD, they are our partners, 
and they are extremely creative in using the different 
sources--Medicaid waiver, the other home funds, et cetera--for 
either adapting their elderly projects or doing new from 
scratch assisted living projects. And there is even a program 
under the Federal Home Loan Bank Board, which I have seen. I 
was a HOPE VI grants manager, and I would see these lists of 
the sources.
    And Robert has been a consultant for putting these things 
together, and you usually have to have four or five before it 
works. But the Medicaid waiver is an important element going 
forward, as can be public housing operating subsidies, as can 
be Section 8 funds or the vouchers following the people, as 
Barbara mentioned.
    So there is a panoply of things that can come from HUD, and 
creative people have put them together with a great deal of 
success.
    Ms. Dentzer. To your knowledge, does HUD have an estimate 
of national need for affordable assisted living?
    Mr. Vaughn. Well, I was looking at some of the material 
from other people on this panel, people from AHFA, et cetera, 
and one of the statistics was that 25 percent of the present 
residents of nursing homes could be taken care of in a lower-
acuity setting. And since there are about 1.5 million residents 
in skilled nursing facilities now, that would be 375,000 
people. Or if you think of a traditional assisted living 
facility of about 100 units, that would be 375,000 people.
    That actually ties in a little bit, if you want to 
extrapolate from the other end. I am one of these people that, 
if you work something statistically from two different 
directions and you come up with the same answer, it might be 
right.
    Illinois has a program, a Medicaid waiver program where 
they have taken a lot of people out of nursing homes, and they 
have financed a total of 124 facilities. Well, if Illinois is 3 
percent of the national population, which it is about, that 
would get you about to 3,700 facilities nationwide.
    And there was one other estimate that we noted, the Center 
for Excellence in Assisted Living projected 67,000 units needed 
over the next 15 years. So that would be about double what we 
are talking about as immediate need. So those numbers aren't--
you know, they kind of jive in a way.
    So that is not an official estimate. That is looking at 
some statistics.
    Ms. Dentzer. Well, from our industry members present, what 
is your sense about, first of all, that question in particular, 
your sense of estimated national need for affordable assisted 
living? And then what about the availability of funding and 
financing through various sources to actually build those 
facilities?
    I know the current environment is, we hope, an anomalous 
environment. But it better be, going forward, right, if we are 
going to meet this national demand.
    Brenda, do you have thoughts?
    Ms. Bacon. Well, there are approximately a million people 
in assisted living today, and about 120,000 of those are 
covered under the Medicaid waiver. Proudly in our Brandywine 
communities, we have 305 people that live there under the 
Medicaid waiver, and I think that the numbers that Michael 
reviewed are really important numbers for us.
    Certainly, for us as an economy, the American taxpayer to 
think about because nursing home care, as we all know, is far 
more expensive and a far less advantageous environment for the 
kind of individuality and care that we are talking about. And I 
was interested to hear Barbara say that preferences vary.
    And in a nursing home, you don't have the ability to have 
your preferences vary. It is very expensive institutionalized 
care. But a lot of people need to be there, whether they need 
to be there or not for their needs, but because of the funding 
source. That is the only way they can access Medicaid if they 
can't afford to be a private payer.
    So we believe that were there better access to community-
based funding and other sorts of funding to help people afford 
assisted living, it would not only save the Medicaid program a 
lot of money and, therefore, the taxpayers a lot of money, but 
provide a better way of life for individual choices and people 
making decisions about how they want to spend their life.
    Ms. Dentzer. So, in your view, what does that require then? 
More Federal investment in these affordable housing options or 
what precisely?
    Ms. Bacon. It does require more investment, something that 
I know we don't have a lot of these days. Certainly whether you 
are speaking of the elderly or the developmentally disabled 
communities, the access to that kind of care in the long run, 
as we all know, saves us money.
    So the more we can invest in that, the better off we are 
going to be in the long run. I think the short run is our 
challenge, of how do you get those dollars where they need to 
be to help us out as we go forward? Particularly with the 
growing wave of elderly and particularly with the growing wave 
of Alzheimer's development, which is just an offshoot of the 
population aging.
    If we can keep people with Alzheimer's in communities where 
they are receiving a lot of care and as well as care for their 
spirit and keeping them as active as they can be, rather than 
putting them in an institution, their lives, their families' 
lives are so much better, and we save a lot of money.
    So the assisted living community would very much like to 
see access expanded for assisted living for all of our elderly 
and for disabled populations in the communities that can best 
meet their needs. We are not suggesting everybody can be just 
thrown into one community, and it all works. It really needs to 
be tailored to meet the needs of the population it is trying to 
serve.
    Ms. Dentzer. How do you see this, Howie Groff?
    Mr. Groff. I want to preface this just so everybody 
understands. We operate in four States. We operate nursing 
homes and assisted livings. But the assisted living residences 
we operate go in communities from 500 to 500,000, and there are 
varying differences.
    And as Michael talked about, there are a number of Federal 
programs that are available to us, but it is very difficult. 
Let me just start with HUD, wonderful program, under Section 
232, but it is arguably an 18-month process. I understand they 
have been inundated because of the economy.
    Fannie Mae and Freddie Mac are Federal lending institutions 
that we could utilize, but they don't finance new construction. 
So that is not even available to us. A lot of communities can 
use USDA financing, but they require a guarantee of some sort. 
And the question is with the state of the municipalities today, 
do they have the wherewithal to do that?
    We could look at municipal bonds to develop affordable 
assisted living. Right now, as we see in the State of Illinois, 
they have been trying to finance their way out of their debt. 
It is kind of leading the people to say, wait a minute, this 
whole rating system needs to be put aside.
    Tax increment financing is available. There are communities 
out there that are very cooperative with that, but there are 
also communities that refuse to do that.
    Providers want to go to state housing authorities. Coming 
from Minnesota, we have the Minnesota Housing Finance Agency. 
They could be an FHA lending enabler, correct? They have chosen 
not to because they see that in conflict with other low-income 
housing. So they have never done elderly buildings. That is a 
choice they have made.
    The last thing I would suggest is as we look at affordable 
assisted living, we also need to look at going back to what 
Barbara said. Right now, Medicaid pays for services only. So 
there is this whole housing component. ``Where am I going to 
live? How am I going to get fed? Who is going to keep the 
lights on for me?''
    And I think we need to address those needs in more creative 
ways. So the question is, could the elderly get access to 
housing vouchers that are under the HUD program right now that 
we are using for low income? What if we got real creative and 
looked at food stamps as a bucket of money to tap for the 
nourishment part of that component?
    The point being, where we operate nursing homes, we have an 
all-inclusive rate which includes the housing and food 
component. We don't see that right now today in assisted 
living.
    So I think there are some programs that exist out there, 
but right now, we are fragmented and disjointed. I think we 
are, quite honestly, more focused on trying to define assisted 
living rather than looking at, hey, we have got a whole bunch 
of these programs out here that are working. What can we do to 
take the best of the best and replicate those processes?
    I think that, Michael, you were getting at that same point. 
There are some very creative things going on, and let us see 
what we can do to replicate those and also tap into that money 
that already exists. In this economy, we can't ask for more.
    Ms. Dentzer. What about those of you, again coming back to 
those of you from State governments, do you see these issues of 
the existence of funding options, but so many constraints 
against using them that it is really not meeting the need? 
Christy.
    Ms. Christy Allen. I am constantly hearing from people who 
want more options for needs, and Tennessee has been able to do 
a lot in that regard through the home- and community-based 
waiver program. And we know that doesn't pay for room and 
board, and that remains an issue for families around the State.
    We also--on the issue of availability, we are also a 
certificate of need State. So availability is determined 
largely by the group of people who sit on that particular 
board. So there are all manner of concerns and interests that 
go into talking about availability.
    Ms. Dentzer. To clarify, so assisted living is subject to 
the certificate of need requirement?
    Ms. Christy Allen. Yes, every single healthcare facility 
type is. It is through the health services and development 
agency, which is maintained in a separate agency. So I do think 
that Tennessee has done a very, very good job of rolling out 
its CHOICES program statewide and getting as many people as 
possible to take advantage of it. But there is still an element 
of it that is private pay. And in a State where there are a lot 
of people with lower income and lesser means, that is a 
difficult challenge.
    Ms. Will. Susan, if I may?
    Ms. Dentzer. Patricia.
    Ms. Will. We have talked a lot about and ought to talk a 
lot about gaining access for people who can't afford the 
product type. I think what many people don't realize or 
remember is that the average means of the people that we serve 
in market rate assisted living is decidedly middle class.
    We have seen a number of studies that have come out, one 
very recently by Boston College, and the income, the mean 
income of a person living in assisted living is under $25,000 a 
year. We are fortunate in our industry in that our seniors of 
this generation were savers. We worry a lot about the explosion 
in the baby boom population and a different set of lifestyle 
habits.
    And our seniors in the main were homeowners, very large 
penetration of home ownership. And even those with modest homes 
have been willing to sell their homes and use their equity, pay 
down effectively their equity to live in assisted living.
    I think it is important to realize that because we 
recognize and all need to work together to find solutions for 
people who aren't in that position. But in the main, the 
industry is serving today people of relatively modest means.
    Ms. Dentzer. Modest means at least in terms of income----
    Ms. Will. In terms of incomes and even assets. If you look 
at people who have sold homes, we are not talking about--we are 
talking about on average enough for someone to stay the average 
length of stay, which is about 2 years, 2 to 3 years in 
assisted living.
    So I think that it is just important, yes, we need to 
explore all the means of access that we could find with all of 
the creativity of crossing programs, as Illinois has done. But 
we have a customer base today who, by choice, is using the 
resources that it has to be in our communities, and they are 
not necessarily affluent.
    Ms. Dentzer. Just to recap, you said the mean income is 
under $20,000 a year?
    Ms. Will. Twenty-five.
    Ms. Dentzer. Twenty-five. You are characterizing that as 
middle class. That doesn't sound so middle class in this day 
and age.
    Ms. Will. For a senior, it would be.
    Ms. Dentzer. Okay.
    Mr. Polivka. It is about the median for all people over 65, 
$24,000. But they are benefited from their housing equity.
    Ms. Will. Right. And that is a generation where we have 
very high penetration of home ownership and very high savings 
rates.
    Ms. Dentzer. Well, I believe if Senator Corker were here, 
he would remind us that this is an environment of fiscal 
straits and not an environment in which we are likely to see a 
lot of new Federal funding come in.
    So just to talk about ways where it might be possible to 
free up existing pools of Federal funding or work through 
existing programs and make those more accessible, less 
constrained, I would love to hear any perspectives from either 
our provider side or the State side about how it might be 
possible to free up a little bit more of this, to support the 
creation of more assisted living or affordable housing.
    Larry.
    Mr. Polivka. I have felt for 20 years that Medicaid was a 
tremendous potential resource for funding people living in 
assisted living. And I am a little surprised to hear that the 
number at this point is 125,000. I thought it would have been 
much higher than that by now.
    I know that, in the case of Florida, it is somewhere in 
excess of 25,000 at this point. You have got an assisted living 
waiver with 5,500 people in it. You have got a diversion 
managed care program with about 10,000 in assisted living. You 
have got an assistive care services program with about 13,000 
people in it that is funded through Medicaid with a match 
arrangement.
    So it is over 25,000 people out of the 82,000 people in 
assisted living in Florida are Medicaid supported. I mean, that 
is really an explosion over about a 5- or 6-year period. And I 
know that, in the case at least, I think, of Oregon and 
Washington, that has been true for years.
    So I am a little bit concerned about this apparent real 
serious unevenness in the use of the Medicaid waiver and other 
options like assistive services to maximize that resource in 
assisted living.
    Ms. Dentzer. Do we even know how authoritative those 
numbers are, the 125,000?
    Ms. Bacon. I believe that the 120,000 are the people under 
the 1915(c) waiver. So those are the waivered slots for 
assisted living in each State, and there are 41 States that 
have that waiver program. I am not referring to those other 
programs that you might be talking about.
    Mr. Polivka. Right.
    Mr. Jenkens. So, Susan, I guess maybe partially in answer 
to Larry's comment. In working to help States create affordable 
assisted living programs for many years under the Coming Home 
program, there is a little bit of a cycle that we get into.
    So States, like Arkansas, create a terrific assisted living 
Medicaid waiver benefit. They ask providers then to develop 
programs to participate in that. Providers, very few providers 
actually jumped in in Arkansas and other States because of a 
number of structural impediments to their doing that, including 
what Michael cited as the seven to eight layers of financing 
you might have to put together to create an affordable unit for 
people with an SSI level of income.
    So you don't get the full utilization of the slots that are 
available, which then limits the uptake that Larry mentioned. 
And so, I think it really gets back to what Howie said. We have 
to make it simpler or at least as simple to develop affordable 
assisted living as it is to provide nursing home services, and 
part of that is the payment source. It is complex.
    Lenders are afraid of the risks that are involved in it. 
Providers are afraid of the risks that are involved in 
potentially capitated Medicaid waiver programs or capped 
Medicaid waiver programs.
    So, in my experience, there are resources out there. There 
are more resources that could be directed or redirected from 
institutional sources, but we have to make it simpler if we 
want normal human beings to develop affordable assisted living.
    Ms. Dentzer. Larry, to come back to what you were saying, 
you said you had long thought that Medicaid could take on a 
greater role.
    Mr. Polivka. Oh, yes.
    Ms. Dentzer. Did you mean in paying for the housing 
component?
    Mr. Polivka. Yes. We created an extended congregate license 
in Florida in 1990 for the purpose of opening up assisted 
living to more impaired people, both coming in and remaining 
and aging in place. The whole notion was that the waiver would 
come right behind it to fund it.
    And we were really drawing on the Oregon experience that 
had already been in place for 4 or 5 years funding assisted 
living and adult foster homes very extensively in that State. 
That was really the launching pad, as I understand it, for the 
transformation of the Oregon system in the mid 1980s was 
assisted living and foster care, Medicaid funded.
    And my question in response to Robert is with this variance 
across the States. I am not so sure it is a matter of all these 
layers and complexity. I think it is a matter of State policy, 
in large measure. I think the Feds at CMS have been open to 
this for a long time, in part because of the kind of 
flexibility you describe, Barbara. I think it is a problem of 
State initiative, fundamentally.
    Mr. Reed. Yes, I agree with that. It is an issue of State 
policy and how they manage their system, how people access the 
system.
    One of the things that I think we haven't talked about here 
yet is that most people who enter assisted living enter it in a 
traumatic event. You have to have a traumatic event to leave 
home. And while assisted living may be more attractive in many 
cases than nursing homes, it is still not home.
    So something traumatic happens, and people have to access 
the long-term care system, and it is very complex in many 
States. And I also agree that Medicaid is the funder of many 
assisted living slots in Washington and Oregon and other 
States, but the Medicaid money does not build the buildings. 
They buy these slots from private providers, and I think it is 
important in Washington and Oregon to say that they have 
negotiated deals with the private providers, saying you can 
take some Medicaid clients, but not all Medicaid clients.
    If you are a nursing home, you would take one Medicaid 
resident, you would take them all. In assisted living, you can 
take two or three or four. And what happens a lot with private 
providers is they have people who spend down. And instead of 
kicking that person out, they allow them to become Medicaid 
eligible and take a lower Medicaid rate for that person to stay 
there.
    I want to just mention one other thing. I think we need to 
look at assisted living as not a continuum. It is part of the 
array of servcies. Continuum implies that you go there and move 
on. The assisted living concept is aging in place, and that 
works better in theory sometimes than it does in reality. But 
it is important to view assisted living as one of the array of 
services and that one size does not fit all.
    Some people choose to live in that setting. Some people 
prefer to stay home. Some people even may prefer to go to a 
nursing home. But that should be a personal choice. And so, the 
importance of a good long-term care system is to provide 
options that are viable to consumers that they can choose where 
they want to be and where they feel most comfortable to meet 
their quality of life needs.
    Mr. Jenkens. So I think there are really terrific examples 
across the States of individual programs that have addressed 
many of the concerns that we are listing. I think the challenge 
is to put them together consistently enough through 
reimbursement and financing programs to allow the development 
to take place.
    So, just as an example, I think a real challenge that 
willing providers face when they want to develop an affordable 
assisted living program is that people have to be nursing home 
eligible. They go through a crisis, as Charley said, and they 
need a placement within 2 days. They have to be out of the 
hospital.
    In nursing homes, there is a retroactive payment provision 
for people who are accepted in and then qualify for Medicaid. 
In most assisted living programs in States, there is not a 
retroactive provision. So people, by necessity, go to a nursing 
home. That is where the funding source is. And then they don't 
come out.
    Michael talked about the 1.5 million people living in 
nursing homes. About 1 million of those are Medicaid funded. 
Less than 5 percent of Americans say they want to live in a 
nursing home. So I think you can kind of gauge the size of 
demand by those numbers and then understand, well, how do we 
get actually the supply to meet the demand?
    And we know the demand is out there. So there is an issue 
with getting the supply on the table, and I think we can solve 
it. There are good examples. We just have to put our minds to 
it.
    Ms. Dentzer. Michael.
    Mr. Vaughn. Yes, I said I wanted to give some examples, and 
I think an example here is helpful. It is an example both of 
the complexity and of the chances we have, the opportunities we 
have. It is when HUD recently did mortgage insurance for a 120-
unit facility. Sixty percent of the units will be leased to 
Medicaid-eligible residents at Medicaid reimbursement rates, 
with the remaining 40 percent leased to private pay.
    The financing of it was--had tax credits so that that same 
group basically had an income restriction as well. It pretty 
much went hand-in-hand. The funding for the project was a $12 
million HUD mortgage, Section 232; $11.2 million in low-income 
housing tax credit proceeds; $1.24 million from the Tax Credit 
Assistance Program under the American Recovery and Reinvestment 
Act; and $195,000 in Illinois tax credit funds. And again, 
based on the Medicaid waiver program.
    And they have done a fair number of these around the 
country, but not in relation to the demand that is out there.
    Mr. Polivka. I think that is proof the stimulus worked.
    [Laughter.]
    Mr. Vaughn. It worked in this one.
    Ms. Dentzer. Eric, let us take a comment from Eric, and 
then I think Barbara, as I understand, has--oh, this Barbara 
has new data. Okay. It is not clear which Barbara has the data, 
but we will go to Barbara Edwards.
    Go ahead, Eric.
    Mr. Carlson. Thank you. First, I want to supplement my 
introduction. I am also here representing the Assisted Living 
Consumer Alliance, which is a national group of nonprofit 
organizations and individuals working together to improve 
standards in assisted living.
    And I want to add something to this conversation, to say 
that it is important that we do identify what is assisted 
living. We are talking about what we need to do to increase 
access to assisted living. It is a good thing.
    But I think it has come out from some of the discussions we 
have had over the last hour and a half, in practice, assisted 
living can be very different. It would be terrific if we were 
able to arrange for increased funding for a single occupancy 
model that provided an adequate level of services to folks. 
That would be fantastic. But if, instead, we are talking about 
increasing access to a model that is providing shared occupancy 
with staffing that may or may not be adequate, that is not such 
a good thing.
    I would like to emphasize it is about more than just the 
money when we are talking about the programs so that we do have 
some understanding what exactly we are funding here. And when 
we have talked about the State models, I think we have 
understood that there are some differences.
    From a consumer perspective, we are much more supportive of 
a model that has a little more structure and, say, the Arkansas 
and Alabamas that have a couple of different levels and that 
have standards that are more commensurate with the care needs 
of the individuals, as opposed to a one-size-fits-all licensing 
standard that may just require that there at least be someone 
awake and on duty and then, after that, leaves a lot of 
discretion up to the individual facility.
    Because, in practice, you get bad results sometimes, and 
the flexibility that you have in the regulations allows, in the 
best-case scenario, a provider to do a tremendous job. But that 
is where you have the biggest problems, too, when you have 
people that aren't up to the challenge and, particularly with 
Medicaid funding, aren't up to the challenge of providing care 
for individuals who, by definition, have conditions that would 
warrant admission into a nursing facility.
    So particularly in an environment where we want maybe not 
just to spend so much money, but to make sure that the money 
that we are spending is spent intelligently and well, it is 
important that we look at this. I am most familiar with 
Medicaid, but I think in all these programs when we are putting 
together these funding sources, we should make sure that the 
end product is something that is productive for folks.
    And I do think, particularly when we are talking about 
Medicaid and dealing with folks who have a significant level of 
care, that we need to have some assurance that there are some 
standards there and that the care is appropriate for people's 
needs.
    Ms. Dentzer. Reactions to that from--Larry.
    Mr. Polivka. Eric, I am sensitive to your concerns, but--
and this has been part of this debate for a long time, in terms 
of how we regulate and how specific do the standards become and 
how far do we get beyond what CMS is working with now in terms 
of HCBS definitions. Is there any evidence that this 
flexibility and wide range of approaches and definitions has 
really resulted in bad outcomes?
    I mean, I have been looking at this for a long time, and I 
would certainly be interested in knowing if we have got 
substantial evidence. But I, frankly, have not yet seen it, and 
I have been looking for a long time.
    Mr. Carlson. My understanding is that the Inspector General 
for HHS is taking a look at this this year, to take a harder 
look at the Medicaid fund and home- and community-based 
services and assisted living and adult day health care. I can 
tell you from my own experience in California and in talking to 
folks from other States that we do see programs. I am in a 
State that inspects assisted living facilities once every 5 
years, and I am well familiar personally with facilities that 
don't do a good job and with licensing agencies that aren't in 
a position to enforce standards upon those providers.
    And I think it is a question of maybe it is a burden of 
proof question. I think the jury is out on the question in both 
directions, whether the care is adequate or whether the care is 
inadequate. And so, I do think that there is an issue. I think 
the providers would recognize that there are good facilities 
and bad facilities in their particular States. I think 
consumers recognize that there are good and bad facilities.
    And I can look at a licensure system and see that, if it 
provides no standards, that is a real issue, particularly in an 
environment where many of the providers do not come from a 
healthcare background. And that is this issue here about the 
acuity of the residents increasing, which is a good thing that 
you have a system which doesn't force folks to go into nursing 
facilities and which allows people with greater care needs to 
stay, but you don't see the standards that match that.
    And I defer to some of the State regulators, but I think 
that the Alabamas and the Arkansas, not to pick on them or to 
praise them, however that is perceived, they have reasons to 
try to develop particular levels of care with standards that 
match the needs of the people.
    Mr. Jenkens. Can I expand a little bit on Eric's comment 
about Arkansas? Because I do think that is a terrific example 
of a regulatory system, especially one designed to help people 
at a nursing home level of care have additional options. And I 
want to compliment Charley for his pointing out that assisted 
living shouldn't be a stop on a continuum, that it is not--
people are not widgets to be moved along a continuum of care.
    They create homes, and they have harder and harder times 
creating homes as they are moved into higher levels of care. So 
assisted living should be an option within a set of community-
based and facility-based long-term care options.
    To do that, you have to have a regulatory structure like 
Arkansas's that really recognizes the significant level of 
acuity and services that will be required to provide, as Eric 
said, good quality care. And I would like to compliment 
Arkansas for doing that.
    And I think we need to think about that, especially within 
the Medicaid spectrum. How do we create an option that is good 
quality, truly operationalizes person-directed care, and then 
create a system that allows that to be developed in large 
numbers so that it can be a meaningful choice in communities?
    Ms. Dentzer. Barbara.
    Ms. Edwards. Thank you.
    I just wanted to offer a little bit of perspective on the 
issue of Medicaid and where Medicaid is serving. We serve 
almost a million people in HCBS 1915(c) waivers. So we don't 
have information at the Federal level as to what housing those 
individuals are in by type, but it has been a fairly robust 
program of providing those kinds of services to individuals in 
communities.
    And we like to see programs that offer individuals choice 
of where they live so that they may choose to stay in their own 
home, and services come in. They may choose to live with a 
friend, and services can support them. They may choose an 
assisted living setting, and services can be funded there as 
well. And there may be an adult group home. There may be a 
foster care arrangement.
    States make those decisions as to what options are going to 
be available. But I think from our perspective, we like to see 
that individuals have a choice. The fact that people have 
choice, though, is sometimes why it is difficult for Medicaid 
to be committed to the development of a new, say, an assisted 
living facility is that, again, the individual has the choice 
of where they want to live. At least that would be the ideal 
rather than the only place you can get that service is if you 
move into this building.
    That is when I think we hear from advocates and others some 
concern that that may not be the way they would like to see the 
systems develop. They would like choices. And if the only 
choice is I must leave my home and move into a place where we 
are then funding, that becomes just the same problems folks 
have with nursing homes. If I have to move there because it is 
the only place that there is funding available, that can be the 
same challenge folks have if the only place they can get 
support is in an assisted living facility or a group home 
rather than also having the choice of staying in their own 
home.
    So one of the challenges I think States have and one of the 
challenges of Federal policy is how to assure that people 
continue to have reasonable choice while still helping to 
develop sufficient capacity where investments may be needed to 
develop that capacity.
    Ms. Dentzer. Charley.
    Mr. Reed. Yes, I want to support that and support what Eric 
was saying before. I used to regulate the long-term care system 
in the State of Washington. And we were involved in developing 
assisted living early on. We regulated it.
    I want to talk now from a consumer standpoint about 
regulation. Regulation is very important to consumers. I have 
already told you that people enter the system at the time of a 
traumatic event. We have to have regulation over the admission 
policies to assisted living, so it is clear what it is you are 
getting for what it is you are buying and about what happens if 
you get to another level of care and you are getting 
discharged. It has to be very clear from the facility. That 
needs to be regulated by somebody to be sure that they are not 
only clear, but they are implemented.
    And then it has to be clear that your basic dignity is 
protected while you are in assisted living. I think that 
assisted living is a part of home and community services 
because of the privacy involved there. In general, you have got 
a key to the door. You have a private bathroom. You have your 
own cooking facility, and you get to decide when you want to 
have breakfast, what you want to have for breakfast. If you 
live in a nursing home, somebody decides that for you.
    So I think assisted living meets the test in my mind of a 
community service. But it is important that there is good 
regulation and just as important that there is enforcement. 
There is some talk today about a plan of correction. That is a 
nice idea as long as they correct the problem.
    I think the regulators have to be sure that they enforce 
what they find out. It doesn't do a lot of good just to find 
there is something wrong. Somebody needs to do something about 
that. And I assume that all the providers are well motivated, 
but sometimes they need to be reminded. There has to be a 
consequence for doing something wrong.
    And as a consumer, I want to see the consequences applied. 
If I develop some horrible situation because the facility has 
not met my individual needs that they have contractually said 
they are going to do, I want a consequence. And so, regulators 
have to be there to provide that consequence.
    And I agree that that is not very well done across the 
country, but it should be. And I think that regulation and 
enforcement is critical for States in all these settings, 
whether they are residential or assisted living or other 
community settings. It is important to the consumers.
    Ms. Dentzer. We are going to have more discussion on 
regulation, per se, in the last bucket of this conversation.
    Howie.
    Mr. Groff. I just want to make one comment. As we talk 
about it, and Charley just described your vision of assisted 
living, we need to remember that we do have many units where 
they are secured, where we take care of people with memory 
impairment.
    And in those units, we oftentimes don't design full 
kitchens out of concern for the safety of the residents. So as 
we define home- and community-based services, and as Brenda 
mentioned, we have over 120,000--I have got a number a little 
higher, but we will say it is north of 120,000--that are 
already being served in what we call assisted living.
    Eric, you are right. We don't have one definition. I am not 
sure we will ever get there, quite honestly. But set that 
aside, we are already taking care of these folks with Medicaid 
services. And if we aren't careful with our definition, we 
might have to find new homes for these people not because it 
was done intentionally, but it could be an unintended 
consequence.
    So I hope we work at that, Barbara, and look very hard at 
where are these folks being cared for today, and are they happy 
in those settings?
    Ms. Dentzer. Robert.
    Mr. Jenkens. Susan, one last comment from my side. Much of 
what we hear being discussed at the table, the need for simpler 
payment, the need for a definition, the need for good strong 
regulations, those are actually benefits from a lender's 
perspective. Lenders like something they can understand and 
analyze.
    And it is very hard for them in the current setting when 
there is no certainty, there is no certainty about either 
revenue or, in some cases, cost to really make an assessment, 
especially one that will last the 15, 20, or 30, or 40 years 
that they are committing their funds to, especially when 
Medicaid waivers are renewed on, I guess, a 5- and a 3-year 
basis. So aligning those two pieces will be critical. But what 
we are talking about here won't hurt investment, may actually 
help.
    Ms. Dentzer. Well, what would be the appropriate mechanism 
for alignment then? Is it regulations at the Federal level, or 
how does all of this come about?
    Mr. Polivka. What are you aligning?
    Mr. Jenkens. Payment sources, requirements, and lender and 
investor needs. So I think there is a terrific start to this, 
and I am not sure exactly where it is. Barbara, I don't know if 
you know, or perhaps Michael. But there has long been a hope 
for a very strong HUD and CMS workgroup around affordable 
assisted living and creating better alignment there.
    I think that is a start. Then having some capacity to 
modify or realign programs or at least elements of the programs 
that I think we have, those of us working in this industry have 
long identified. The Center for Excellence on Assisted Living 
put together a white paper on affordable assisted living I 
think 3 years ago. It is a terrific paper. It really points out 
all of the different pieces that we are talking about.
    And I think if we could get a workgroup together to 
actually look at those, some of it we may be able to solve 
quite easily within current programs and program rules. Some of 
it may be legislative. Some of it may be a new program.
    Ms. Dentzer. What is the status of this rumored workgroup?
    Mr. Claypool. HUD and HHS do have a working group that is 
focused primarily on the transition from institutional settings 
into the community. We haven't addressed assisted living as an 
issue.
    However, our Assistant Secretary for Planning and 
Evaluation--you may be familiar with the work that they have 
done--has commissioned a couple of recent papers. And I am 
sorry, I don't have them here to cite from them. But I think 
that is a clear indication that the department is looking at 
the role assisted living plays in Medicaid long-term services 
and support.
    Let me give you a broader perspective on where the HUD/HHS 
collaboration is. It came out of President Obama's year of 
community living. At the center of the initiative were 5,300 
housing vouchers that HUD made available for disabled families, 
I believe is the term that HUD uses.
    Of this 5,300 vouchers, 1,000 of those vouchers were set 
aside to coordinate with the CMS program Money Follows the 
Person, or a very similar State effort that was designed to 
provide the services that were needed by the individual when 
they moved into the community from an institution with the HUD 
voucher.
    HUD has made the award of these vouchers. And CMS now is in 
the process of looking at to what extent was the Money Follows 
the Person program really instrumental in influencing the take-
up of these vouchers?
    There are a number of other issues that we are dealing with 
in this working group, and I could quickly give an overview on 
some of them. We are dealing with issues around civil rights. 
That is something that I think we should be mindful of when we 
talk about assisted living, particularly when the resources 
that Eric mentioned aren't in place.
    If you develop a very congregated setting where people are 
going to be served and they don't have enough service, the 
Department of Justice may, indeed, come in and find that these 
individuals are not living in the most integrated setting 
appropriate to their need. We have seen that happen on the 
mental health services--there are Medicaid funds involved. But 
we are really talking about large congregate settings where 
services are provided to individuals without regard to their 
interest in living in scattered sties.
    So I know that the industry around the table aspires to 
much better, but it is something that we have to be mindful of. 
And this working group is tackling some of those issues.
    Our others are really focused on building partnership 
between the HUD programs, particularly the public housing 
authorities, and the Medicaid program and entities that are 
funded through the Medicaid program. There are a couple layers 
of complexity on the HUD side that I may get wrong. But the 
State housing finance entity has the ability to work with the 
Medicaid agency right now. And under the 811 program, it is 
supportive services for individuals with disabilities. Congress 
recently passed a law that now changes that program and really 
puts front and center this partnership between Medicaid and the 
housing State financing entity as the key objective.
    There are a number of other ways that they want to bring 
financing arrangements to the table, which HUD can hopefully 
underscore. But the point being, when you really have a program 
like 811 moving away from just funding providers that are going 
to create living arrangements for people that rely on Medicaid 
toward a more strategic approach that is looking at how we can 
leverage the limited resources that HUD is making available 
through a program like 811 and using things like tax credits to 
make that possible. We are beginning to, on the HHS side, 
really understand what it takes to build a strong partnership 
with the State housing entities, be they public housing 
authorities or at the financing level.
    This will take a while to mature. We tried to do this in 
the late 1990s, and we didn't get too far in our partnership. 
But Secretary Sebelius and Secretary Donovan remain very 
committed to seeing the partnership blossom. And perhaps the 
information that is gathered here today will be forwarded to us 
so we can examine the assisted living issue through our 
collaboration.
    Mr. Vaughn. To add on a little bit to what Henry said, we 
are committed to that partnership, and our agencies are 
pursuing it. But we have other partners who need to be at the 
table, and I will say it before Barbara does. The CMS works 
through the States. So, in order for these things to work 
effectively, HUD is in many ways able to provide the funding 
for the housing itself. But the services have to come from HHS, 
and HHS doesn't administer directly, as HUD does, but it goes 
through the States. So the States have to be at the table to 
discuss the waiver programs and how they work.
    Also, as you mentioned, the State housing finance agencies 
are the dispensers of the tax credit. So I think they have to 
be at the table, too, and our private sector partners, as well 
as our public housing authority partners. I think they need to 
be part of the discussion, as well as other people represented 
here at the table. So it shouldn't be a small group. It should 
be a larger one.
    Ms. Dentzer. It is, believe it or not, already almost 3:00 
p.m. It says it is on. There we go.
    As I say, it is approaching 3:00 p.m. I propose that we 
take a 5-minute break now, stretch break, et cetera. Reconvene 
here in about 5 minutes, and then we will move on to our last 
set of discussions around regulatory issues and disclosure and 
so forth.
    So see you back here in 5 minutes.
    [Recess.]
    Ms. Dentzer. If you all would go ahead and take your seats, 
we will get started in just a moment.
    [Pause.]
    Folks, if you would please go ahead and sit down, we will 
get started here momentarily.
    Anne Montgomery just asked me to mention to all of you that 
the Aging Committee is going to be compiling all of the 
questions and the responses that all of you sent in to the 
questions that the committee asked and will be sending that out 
to everybody. It will take about 3 weeks for you to get that 
back, but you will have that.
    And toward the end of our session today, let us try to 
devote perhaps the last 10 minutes or so to seeing if we can't 
surface a few points of consensus that came out of today's 
discussion as to how we keep the conversation moving forward on 
some of the issues that we have talked about.
    We will move now to access and discharge issues that, 
again, impinge on many of the topics that we have been speaking 
about so far today. But, in general, what we want to discuss 
are issues along the following lines.
    Do States generally require Medicaid-participating assisted 
living facilities to disclose what their policies are with 
regard to retaining residents who spend down their private 
funds--we discussed this earlier--and become eligible for 
Medicaid? How does this work? Do States generally allow 
facilities to discharge individuals who start out as private 
pay and then spend down to Medicaid eligibility over time?
    When the facility is in a position to replace a Medicaid 
beneficiary with a resident who can afford to pay a higher 
rate, does the facility, in fact, have that latitude? So that 
is one of the questions we want to explore.
    Again, do all, many, some, no States have processes in 
place that permit Medicaid beneficiaries to appeal any 
discharge decisions by assisted living facilities? What is the 
legal position of facilities licensed to offer assisted living 
services with regard to discharging residents whose needs 
exceed State-licensed level of care requirements?
    How does the facility have to comply with other statutes, 
anti-discrimination, Americans with Disabilities Act, Fair 
Housing Act, and so on in this regard? Is there merit at all in 
requiring assisted living facilities that ask a resident to 
leave because he or she develops the need for services that 
exceed that facility's care standards to help with the transfer 
of a resident to another setting in which higher-level services 
could be provided?
    Or alternatively, could assisted living facilities, should 
they be asked to assist residents if they wish to age in place 
and bring in additional services?
    And then, finally, are negotiated risk agreements, as are 
used in some States, a mechanism whereby living facilities and 
residents can attempt to negotiate additional services for 
residents whose care needs are found to exceed State licensing 
levels of care?
    So this is kind of the body of the questioning that we 
would like to explore now. And I thought we would start off 
again with our providers on those perspectives to give a sense 
not only how they see things operating in their own State, what 
the legal environment is in their own State, but what ought to 
be the case.
    So, Brenda Bacon, if we could begin with you?
    Ms. Bacon. Susan, I could talk about this all afternoon. So 
I am going to warn you. Just to hit on a couple of the 
subjects, I think that disclosure and commitment to that 
disclosure are crucial in every State for every provider.
    I think that consumers have a right to know what your 
policy is, particularly since there is limited access to 
Medicaid waiver dollars. And you need to abide by that policy 
always. I think the State of New Jersey has taken steps, as 
other States have, but particularly in New Jersey, they require 
that 10 percent of the assisted living population have access 
to Medicare waivers. And I think that the communities in New 
Jersey proudly participate and actively participate in the 
Medicaid waiver program.
    I think each State has developed its own approach to the 
Medicaid waiver, and 41 of those have, and some have not. But I 
think in every State, they have developed a very robust program 
around regulation and around access. And I think people are 
very, very involved in that process in each State.
    There are two reasons I believe that people discharge from 
assisted living, which is their preferred setting. One is that 
their level of care is such that they need to be in skilled 
nursing. But, most often, there is a discharge, unfortunately, 
because they can't access Medicaid, and they have to go to the 
skilled nursing center where they can access Medicaid dollars. 
And that is unfortunate, and we have talked a lot about that 
today.
    So I think one of the main ways that we can increase the 
ability of people to choose the setting in which they want to 
live is to reduce the institutionalized hold on the dollars 
that they need. But in terms of policies of access and Medicaid 
acceptability, eligibility, commitment to stay, those need to 
be fully disclosed and honored, and I think everyone in the 
assisted living community certainly that I know of supports 
that.
    Ms. Dentzer. So, then as a provider, what laws do you have 
to operate under within the State to discharge a person?
    Ms. Bacon. Well, in our State, we are required to make 
plans for discharge if we cannot take medical care. In other 
words, if someone absolutely requires 24-hour skilled care, and 
even though we have 24-hour nursing onsite, we certainly don't 
have the intensity of medical care that a skilled nursing 
facility has.
    So everyone has an obligation in every State under every 
State regulation--to every 50 State set of regulations, they 
have to discharge if they can't care for them. I think beyond 
that, with the requirement for access to Medicaid funds, it is 
really what your State has developed in terms of its 
relationship and its State plan and its 1915 waiver in terms of 
how many waiver slots they have available so that people can 
stay in assisted living when they get there.
    Ms. Dentzer. So is there any ability for individuals on 
Medicaid to appeal any discharge decision?
    Ms. Bacon. Oh, absolutely.
    Ms. Dentzer. There is.
    Ms. Bacon. Absolutely. I have a person in one of my 
communities who has been there 11 years under a Medicaid 
waiver, and she will always be there. I have 305 people under 
Medicaid waiver, and they will be there as long as we can take 
care of them.
    If there is a discharge, whether it is a health discharge 
or any other kind of discharge, there are always consumer 
rights and resident rights policies in every State that I know 
of that allows them to question that discharge.
    Ms. Dentzer. Okay. Robert.
    Mr. Jenkens. Susan, I would say that I think there are some 
very good examples of States that do have discharge controls 
and reviews. I think Oregon is one of them. Not all States do, 
and I would say there is a great deal of actual I would term it 
``tragedy'' involved with some of the discharges that I have 
seen and heard about for people who either run out of funds or 
where providers decide that the Medicaid program is no longer 
sufficient to cover those costs.
    I would say that discharge to me is one of the single-
greatest issues facing assisted living and that for us to honor 
the values that assisted living was founded on--of home, of 
creating community, of integration in community, and aging in 
place--unless we address discharge issues and concerns, we 
won't get to what assisted living promised.
    Ms. Bacon. Can I just respond? There is one situation where 
one company very notoriously decided they were withdrawing from 
the Medicaid program, and New Jersey was kind of the epicenter 
of that. We understand that. I have seen all of the horror 
stories and the things that have gone on there.
    The State of New Jersey has taken very aggressive action 
against that company, and I know of no other company in the 
assisted living industry that supports what happened there.
    Ms. Dentzer. Larry and Martha, I want to ask you if this 
has perked up on your radar screen as well. But let us go to 
Larry first, and then we will----
    Mr. Polivka. One of the reasons we created the license in 
Florida in 1990 to allow people to age in place was that 4,000 
people a year were leaving assisted living against their wishes 
and going into nursing homes, most of them Medicaid placements.
    You know, this is an inherently difficult issue. I think 
you have to give assisted living facilities the ability to make 
a decision about who can stay there, given the level of 
services that they can provide. And that sometimes is going to 
result in some really difficult, unfortunate decisions.
    But if you can expand your Medicaid program to cover, to 
really accelerate the growth of it, you are going to be able to 
allow assisted living facilities to allow people to age in 
place under more, a wider range of circumstances than can now. 
But regulating discharge criteria is a really difficult issue. 
I think you really have to err on the sides of giving these 
facilities considerable autonomy in determining that as long as 
there are disclosure provisions that really do reflect the 
kinds of decisions that are made.
    Ms. Dentzer. Robert, and then we will come over here to 
Josh, and then to Martha.
    Mr. Jenkens. So I think Larry brings up a very important 
point. I think you want to set a minimum standard of what 
assisted living will attempt to provide, and then you want to 
create a great deal of flexibility for that provision of 
service either to be delivered or brought in safely and 
affordably.
    But I do think there is a role for the State to challenge 
providers because many of the providers' business models don't 
involve people with high levels of need.
    Mr. Polivka. Right.
    Mr. Jenkens. As a matter of fact, they see that as a 
marketing issue or a cost issue.
    I want to also say that it is not just providers, however. 
So, in my experience, regulators and regulations often are an 
equal impediment to people staying in place and expressing 
their choices and assuming some risks associated with staying 
in a lower level of care.
    So I think there is an equally important piece of this that 
is really around what do regulations allow as far as civil 
rights, as far as people expressing their preferences and 
taking on some of those risks. And I know we will get to the 
issue of negotiated risk agreements later. That is one tool 
potentially for that, but there are many others.
    Ms. Dentzer. Okay. Great. Josh.
    Mr. Josh Allen. You know, this topic has me chomping at the 
bit because nurses are often at the center of the conversation 
about whether or not someone needs to be discharged. And I 
think we should start with the term ``discharge.'' I think it 
is highly inappropriate for the setting, given that we are 
encouraging it to be a home and home-like. You don't discharge 
out from your home. You move out of your home.
    But Robert, I think, touched on a key point, which is, in 
my experience, it is actually not often the provider who is the 
challenge in this situation. It is the regulations that in some 
States are quite prescriptive in what can and cannot be done in 
assisted living.
    I have had the opportunity to work in a number of different 
States as an assisted living nurse. One of them, my great home 
State of California, has a literal laundry list of seven or 
eight things that simply are not allowed in assisted living. 
You know, case closed.
    You compare and contrast that to a State I have worked in, 
in Oregon, under the nurse delegation model that was brought up 
earlier. It is a good thing these mikes had off buttons, or we 
could have talked about delegation for hours.
    Under that type of model, there is much greater 
flexibility. Whether it is using negotiated risk or a service 
plan or whatever system you want to use, there is a much 
greater flexibility for a healthcare provider--a nurse, 
probably a physician being involved as well--to sit down with 
that resident and their family and the provider and make some 
decisions about what is appropriate for this individual and how 
can we meet their needs.
    So instead of just simply saying that if you have in the 
California example, if you have a G-tube, a gastrostomy tube, 
you cannot live in an assisted living community. Well, that is 
ridiculous. There are many individuals living with gastrostomy 
tubes in their homes, their true residential homes all the 
time.
    So to say that simply because you are in this licensed 
building it is inappropriate is, I think, largely just a sign 
of how old California's regulations are. Whereas, under a model 
where we could say what is unique about this individual? Are 
they receiving food and fluids through that G-tube? Are they 
receiving medications through that G-tube?
    Well, in some cases, the answer is no. So, for that 
individual, it could be perfectly appropriate for them to 
remain in that assisted living setting. In a State like Oregon 
and others that utilize nurse delegation, allow that 
professional nurse to use their judgment of how and when to 
train staff to provide assistance. I think these issues, they 
touch on everything we have been talking about today.
    When you guys are getting into financing and banks, as a 
nurse, my eyes kind of glaze over a little bit. It is not my 
area. But the way that assisted living has really innovated 
over the last 20 years is, in many ways, what makes it 
affordable.
    One of the reasons it is so expensive to live in a nursing 
home is because an overwhelming majority of the functions being 
provided for that resident have to be provided by a nurse. 
Medication management would be the classic and best example.
    Why spend all that money to have a bunch of nurses running 
around passing pills when study after study has shown it can be 
done very effectively by medication aides and medication 
technicians who have been trained or perhaps delegated to?
    There is a tremendous amount of innovation out there 
regarding the actual provision of services to residents. And I 
think if more States would take the time to learn from one 
another rather than sort of working in silos and trying to 
figure it out for themselves, but see what has been done, what 
has been done effectively, it touches on everything we have 
been getting into--from access to affordability to discharge to 
quality of care.
    At the end of the day, it goes back to the services being 
provided, and how can we provide them in a flexible way that 
can be tailored to the individual? Because if you want the 
opposite of that flexibility, quite frankly, you have a nursing 
home.
    Mr. Jenkens. Josh, can I throw in lenders really hate it 
when you violate those regulations?
    Mr. Josh Allen. Yes. Larry, I actually didn't catch your 
question. I don't know if you were being rhetorical?
    Mr. Polivka. Well, sort of, half and half. But they only 
inspect every 5 years in California. So who knows?
    Mr. Josh Allen. Well, the practical reality is--and I will 
speak from, I am obviously not a California regulator, but I do 
a lot of work in California. From a practical reality, they are 
in buildings much more than every 5 years. That is the minimum 
standard for regulatory inspections.
    They are also in the buildings for complaints, new 
licensure, 90 days after licensure, and a host of other 
reasons. But nevertheless, any provider, I would hope, tries to 
practice to the letter what those regulations say. And 
unfortunately, in that example, there is a very prescriptive 
list of what is and isn't allowed.
    Ms. Dentzer. Martha, I want to give you a chance to weigh 
in on this.
    Ms. Roherty. I think we had an all-State call a couple of 
weeks ago on assisted living, and one of the things that came 
out is, if the States have an up-front disclosure that is 
really robust, it really can help out the consumer.
    And so, we were kind of looking through what are some of 
the models for really a robust up-front disclosure? It would 
include like the preadmission process, the admissions process, 
what is going to trigger a discharge or a transfer, the plan of 
care, meaning the whole aging in place model and a consumer-
directed vision for the consumer.
    The staff training, the orientation of the staff, the CPR, 
if they have volunteers, that they are trained, what the 
physical environment looks like. The staffing patterns, the 
shift times, and then the residents' rights and who they can 
contact if there is a concern.
    But on top of that, the States were talking about the need 
to really disclose the cost up front because a lot of the 
people, like one of the States said that some consumers go into 
a facility that is a Cadillac, and they can really only afford 
a Chevy.
    Now who gets the burden of that transfer when that occurs? 
The State falls victim in a lot of cases because they are the 
bad guys that are not able to pay for the Cadillac, and the 
assisted living community is giving up that person's home. So 
if they knew more in advance what is included in the base rate 
and in the extra fees and everything right up front, I think we 
would have some more informed consumers, too.
    Ms. Dentzer. Eric, I want to bring you into this 
conversation. What is your perspective on this?
    Mr. Carlson. First, I would like to say that it is 
important to keep disclosure in perspective. It is a good 
thing, but not if it is in lieu of some solid base of 
standards. Not that everything needs to be standardized, 
obviously.
    I think that there is a false choice that suggests that, by 
extending any kind of standards, you are turning an assisted 
living facility into a nursing facility or something that can't 
be saved. There is a middle ground here, and to the extent that 
we rely on disclosure, I think we have an unrealistic 
expectation of how that works in practice.
    You are a consumer. There was a discussion here about a lot 
of these decisions being made in traumatic circumstances. You 
get a big stack of papers that describe how this facility is 
completely different from some other facility. Consumers aren't 
in a position to really process it.
    They should be able to process and can be expected to 
process some differences around the edges, but not at the core. 
I think that consumers legitimately expect that there are some 
similarities between assisted living facilities, that they 
share some concepts. And when you buy into an assisted living 
facility, you know what that means at some basic level.
    There may be differences. So I think that, myself and my 
constituents, the people I work with, really worry that there 
is too much of a focus on disclosure if we are ignoring 
standards because of that.
    And then as applied to a couple of these issues--requiring 
that Medicaid be accepted, for example. In some States it is 
beyond disclosure that Medicaid, when a person becomes Medicaid 
eligible--and again, I am not from these States, but looking at 
the regs and the policy--Illinois, New Hampshire, Oregon, I 
believe. No, Illinois, New Hampshire in any case require that 
Medicaid be accepted.
    What I see in Oregon is a statement saying that every bed 
has to be certified. I want to say that is an incredibly 
important thing for a consumer. That if you are in an assisted 
living facility, you enter as a private-pay individual, you 
spend your life's savings down to Medicaid eligibility, the 
facility is Medicaid eligible. You entered that facility 
knowing that it was Medicaid eligible, and then the facility 
says, ``I am sorry. We don't want Medicaid from you.'' Just 
look at that from that person's perspective.
    That is a hard, hard thing. And it strikes us as 
inappropriate to have a person pay their life's savings in such 
a way and then be told that they have to leave. There is 
something a little cold about that that I think is 
inappropriate from a policy perspective, from a human 
perspective.
    And then the level of care issue as well, I think it is 
important to--I would suggest here that I think that facilities 
and consumers benefit from a little more specificity as to the 
level of care that the facility can and cannot provide. Because 
when the continuum is so broad that you have got some 
facilities that provide very little and some that provide 
something close to a nursing facility level, it is difficult 
for consumers.
    And when they are told that they have to leave, it seems 
much more like an ad hoc decision that a facility is saying to 
them we are deciding in your case we don't want to provide care 
anymore. And I agree with the statement that all the States say 
that a facility has grounds to discharge when the facility can 
no longer meet the person's needs.
    But depending on what State you are in, it feels like an ad 
hoc decision because the facility in many of those States has 
the ability to provide care if it wanted to. The licensure 
standards allow for it, but the facility has self-defined 
itself as only providing a limited level of care.
    And I will also mention that the difficulty for the 
provider at that point of view is that it really does raise 
some ADA and fair housing issues because, if it is the State 
that is setting those levels, it is the State that is at risk 
for violating the ADA. It is the State that is not making a 
reasonable accommodation to allow people to stay.
    But if the State says we don't have any problem with you 
providing this level of care and the facility is saying we 
choose not to meet your needs--and I think it was mentioned 
earlier, there is a financial calculation about all of this and 
the type of level of care that you want to provide--the 
facility really has some issues.
    And then as far as the process is concerned, there is a 
tiny, tiny minority of States that allow an administrative 
appeal in these circumstances. I agree that there may be 
regulations. And so, there are resident rights. There is 
probably in the vast majority of States, there is a listing of 
justifications for transfer and discharge, but they tend to be 
loose. They may refer to the contracts and if the contract-
authorized discharge is okay, or it may allow discharge if the 
facility can no longer meet the person's needs.
    So there is a lot of wiggle room there, and then there 
really is no administrative process. And it puts a consumer in 
a difficult position. California is one of those States. And in 
my experience, when consumers get a notice that says you have 
to leave, and there is no particular explanation of how it 
might be appealed--the law has changed in the last year or so--
but they tend to just fold up their tent and say, ``Well, I 
have been told what the situation is. That is it.''
    Ms. Dentzer. So I would like to hear from some of the State 
folks here and get a sense is this an issue in your State? Is 
there a mass movement among facilities to discharge 
individuals? Is there not? Is it a nonissue? And where along 
this spectrum do all of you fall?
    Julie, maybe you could start by clarifying what is the 
situation in Oregon?
    Ms. Strauss. So, in Oregon, we do have rules specifically 
around involuntary transfers, as we call them, or involuntary 
move-outs. And in our State, we have voluntary Medicaid 
participation. If you sign a Medicaid contract, you have agreed 
that Medicaid is a payer source. In our rules, you can ask 
someone to leave for nonpayment.
    What we have said is, if Medicaid is a payer source and you 
have a Medicaid contract, you can't ask someone to leave if 
they become Medicaid eligible.
    Ms. Dentzer. You cannot?
    Ms. Strauss. You cannot. That is not a legitimate reason if 
you have a Medicaid contract. Of course, our uniform 
disclosures and our agreements require that you say up front, 
``Do you have a Medicaid contract?''
    We have been very, very fortunate for providers who have 
decided that they no longer want to participate in Medicaid. 
They have gone through what we call a ``gradual withdrawal 
contract.'' So they have said anyone who currently is living in 
our facility, we will go ahead and extend to them the courtesy 
if they spend down that they can continue to be in our facility 
and we will continue to accept Medicaid as a payer source until 
they leave.
    What we are finding in the transfer rolls, quite honestly, 
what we are hearing, we don't see a lot of involuntary move-out 
notices going for level of care. We probably see much more 
having to do with behavior associated with a safety issue, 
either to themselves or to others, because we don't require the 
level of staffing in a lot of those facilities. A risk 
agreement is great when you are talking about negotiating with 
a family and an individual about their risk. It is another 
thing when there are other residents or staff being placed at 
risk by that individual.
    And so, we are seeing a much higher occurrence of 
involuntary move-out notices for behavior rather than actually 
for medical service need, which seems to be the dominant topic 
here with regard to service level of need is more the behavior 
service than the medical service.
    Ms. Dentzer. Irene.
    Ms. Collins. Susan, in Alabama, again, we don't have 
Medicaid as a payee, or payer source. But we do have our bill 
of rights for our residents, and our ombudsmen are the voice 
out there for them if an issue does arise. And in addition, 
with the bill of rights, it is the same thing that Julie just 
said. In there, we are seeing more about behavior than we are 
about discharge for care. Same kind of thing.
    Ms. Dentzer. Krista and Kevin, what is the situation?
    Mr. Coughlin. In Wisconsin, two of our models, they are a 
little bit different. One model does allow for an appeal of a 
discharge, but that nonpayment issue is problematic sometimes 
because the person spent down, and then they don't--a facility 
doesn't have a contract for Medicaid.
    And in our State, we have Family Care is the Medicaid 
program, which is working very well. Right now, it does reach 
about 80 percent of the population as an entitlement. So, in 
those places when we have spend-down, many times they are then 
eligible, and then they can remain.
    We used to have a lot more discharges because of nonpayment 
because people had to go on a waiting list. So they went to 
nursing homes prematurely. But there is this issue does come up 
on occasion. I think disclosure is very important so people 
know ahead of time. But it is, when that happens, it is a very 
difficult situation. When somebody does get an involuntary 
discharge because--for whatever reason.
    I think what is nice about our regulations is we do have 
some flexibility. So, usually, if there is a barrier to the 
regulations, many times we can issue a variance, add some extra 
protection so that the person can stay so we don't have that 
move because transfer trauma can be very debilitating to an 
individual.
    And I don't see it as--we do have some cases of that 
occurring, but I don't see it as a huge concern. I think 
communities, when they can, want to retain those people as long 
as possible.
    Ms. Dentzer. And Krista.
    Ms. Hughes. In Arkansas, the Office of Long-Term Care, as I 
said, regulates and licenses the facilities. The ones that 
enroll in the Medicaid waiver enroll through my office with the 
Division of Aging and Adult Services. And actually, we don't 
even know how many units each facility--we don't ask them--we 
had not previously. We are now. We had not previously asked 
them to stipulate. So, really, you wouldn't know, even the 
long-term care surveyors would not know, going into a facility, 
which units were designated as Medicaid waiver units versus 
private-pay units.
    The State does not get involved with if a particular 
previous resident was a Medicaid waiver client and discharged 
for whatever reason. They would not even be required to put 
another Medicaid waiver client into that particular unit. It is 
just not ever seen to that degree.
    Ms. Dentzer. Okay. Let us move to the area of negotiated 
risk agreements. And Robert, I think you were starting to weigh 
in there?
    Mr. Jenkens. Sure. I think that----
    Ms. Dentzer. First of all, just so we are all on the same 
page, what are those?
    Mr. Jenkens. Sure. So negotiated risk agreements mean 
different things to different people. But, in essence, the 
concept of a negotiated risk agreement is to allow an 
individual to assert that they are willing to take on some risk 
because either the provider doesn't offer a service that they 
may be judged to need or the setting itself may offer less 
protection in the way of life safety, in the way of services, 
or regulation than some might judge them to need as well.
    So it is really a way to let a competent individual or the 
family make decisions the same way you or I do in our own home 
about what is good for us and what the balance is. So I don't 
know how many of you in this room have gone skydiving? Most 
nurses would not allow you to go skydiving if they were asked 
to weigh in on that. So it is really in that context.
    I would say that, in this sort of three-party structure of 
good, strong, minimum regulations, additional flexibility 
allowed on top of those through good disclosure, and I would 
like to put in a plug for AHRQ's disclosure collaborative that 
is producing what I think will be a model of disclosure 
standards. And then consumer choice in the form of some way for 
the consumer, whether it is negotiated risk agreements or 
something else, to really be able to assert some piece, their 
piece in the conversation between providers and regulators.
    And currently, in my opinion, consumers of assisted living 
don't have much of a voice in that conversation. So there is a 
paper funded by ASPE, of which I was an author, looking at 
negotiated risk agreements. This was about 5 years ago. The 
state of negotiated risk agreements, and then the pros and the 
cons around that.
    Ms. Dentzer. Josh.
    Mr. Josh Allen. I think one of the practical realities of 
negotiated risk is often the question of who are you 
negotiating with? The resident, at the end of the day, is the 
person you are responsible for, and they are the consumer. But 
virtually every assisted living resident I have ever talked to 
has had a family member involved in some shape or form or 
another.
    Sometimes it is a very clear legal relationship, you know, 
a power of attorney, for example, conservatorship. More often 
than not, I think it isn't. It is simply a relative who has 
helped mom or grandpa or whoever it is make their way into that 
assisted living community.
    And I am speaking from many, many examples of personal 
experience where we know what the direction is for a resident, 
but we have conflicting direction from a family member. An 
example that sticks out in my mind I will never forget was in 
an assisted living community in Los Angeles I worked with where 
we had a resident who was to be receiving Aricept related to 
Alzheimer's disease, medication.
    The family member who was the responsible party didn't have 
any real legal authority. But took it upon themselves to stop 
making the co-pays for that Aricept, and now as a provider we 
were sort of stuck in the middle of we know this resident needs 
it. The family, who is controlling the money--probably not 
entirely legally--doesn't want to pay for it.
    And those sorts of examples happen time and again. Issues 
related to driving, issues related to wandering, issues related 
to following physician-prescribed diets. There are dozens of 
very practical examples where negotiated risk could perhaps 
play a role. But one of the practical realities, one of the 
challenges is it is not always as simple as the provider, the 
resident, and the regulations. It is usually a much more 
complex relationship with family members and perhaps legal 
representation for the resident.
    That, at the end of the day, the care provider is stuck 
sort of wading through that somewhat tricky mess of figuring 
out at the end of the day who really should be making decisions 
for this resident. And this becomes even more tricky when we 
get into something we haven't talked about a lot today, but 
Julie started to bring it up, and that is the issue of memory 
care.
    Persons with dementia, Alzheimer's disease, without 
question one of the fastest-growing segments of the population 
that are in need of assisted living services. Who is making the 
decisions for that person?
    They rarely come to us with any sort of conservatorship. At 
most, there might be a financial power of attorney. And there 
are a number of logistical challenges to really successfully 
implementing anything that I would say resembles negotiated 
risk.
    And then one last comment. I think what is important to 
take away from the ideas behind negotiated risk is the concept 
of communication. Every State has different legal realities 
regarding negotiated risk.
    In California, for example, we cannot use negotiated risk. 
In other States, they require you to have negotiated risk. And 
again, that is, I think, appropriate based on what fits the 
needs of the consumers in each State. But the running theme 
with negotiated risk is that it encourages communication.
    Someone earlier brought up the service planning or the care 
planning process. That is really what needs to be happening is 
the provider, the resident, whoever else is involved in making 
these decisions, they need to sit down and they need to talk. 
It really is no more complicated than that.
    You know, we could spend hours going in circles about the 
details, but it really is that simple. If all those interested 
parties sit down and have a conversation about what is needed, 
what is allowed, what is not allowed, how are we going to 
figure this out, in virtually every instance, you can come to 
some resolution.
    And again, that starts to feed back into the discharge 
question. It starts to feed back into the level of care 
question. It is a very umbrella type of issue. When I worked in 
the corporate office for an assisted living provider as a 
nurse, one of my responsibilities was to get involved any time 
we were considering an eviction notice, an involuntary 
discharge, involuntary relocation.
    And I can tell you, in 99.9 percent of cases, we were able 
to avoid ever writing that eviction notice. We didn't have to 
get the attorney on the phone to write a letter because we 
could sit down and we could talk. And sometimes the end of that 
conversation was the resident stayed, and we figured out a way 
to make that work, as in the case of the Aricept resident.
    Other times the decision amongst all of the parties was, 
you know what, dad is wandering. We have found dad outside a 
few times in the last couple of weeks, and there are some very 
real safety concerns. And as painful as that decision is to 
move out, everyone, at the end of the day, was in agreement. It 
was the right decision.
    Now it wasn't under the heading of negotiated risk, but I 
think the concept was there. To get people to sit down and talk 
and get all of the parties at the table. And you said what 
could we come to consensus to? I would certainly hope this 
group could come to consensus on that.
    Mr. Jenkens. Susan, just a quick comment on Josh. I think 
he summarized the findings, actually, of our study quite 
beautifully, which really is the conversation that is 
important. And I think what we need, again, whether it is a 
negotiated risk agreement or some other framework, is the 
requirement that the conversation take place.
    And I think in States that require a negotiated risk 
agreement, that provokes the conversation that says who should 
be included, including the consumer? I think in States where we 
don't have language around that, too often we get the eviction 
notice with no explanation, and the person is just, as we say, 
gives up and moves on.
    Ms. Dentzer. So can you give us a sense how many States are 
like California--if I understood you, Josh--don't allow 
negotiated risk agreements at all? How many allow them?
    Mr. Josh Allen. For point of clarification, what California 
does have, though, are very clear standards regarding the 
development of a service plan, which I would argue--I am a 
nurse, not an attorney. I am sure there are lots of them in the 
room. There is a legal difference between disclose and a 
service plan, but I think the concept is very similar.
    Mr. Jenkens. I am guessing Eric knows the number because I 
have forgotten.
    Ms. Dentzer. True? You know?
    Mr. Carlson. Yes, 16 or 17 States have something in their 
regulations that look something like negotiated risk. They may 
call it something different. It may be managed risk. It may be 
informed consent. So I think it is confusing to say that, say, 
16 States authorize it, and that is shown by this conversation. 
I think Robert started by saying, well, it is hard to say what 
negotiated risk is.
    And this conversation illustrates it because we started 
talking about a waiver of liability, and we ended up talking 
about a conversation. And those are very different. And I can 
say I think the conversation is great. That is obviously 
important. I would hope that we could come to consensus on 
that.
    But that is just light-years away from a consumer signing 
an agreement that says you, the service provider, will not be 
liable if certain bad things happen. It is hard to imagine any 
of us signing that in any other context--in a school context, 
in a service context. And again, we know how this happened. I 
would suggest that in the long-term care setting, it is usually 
the providers that present these agreements, and the consumers 
are not in a position to negotiate practically.
    I have written a Law Review article on this in the Journal 
of Health Care Law and Policy that lists all the states. But I 
just want to mention from a legal perspective, if it is a 
waiver of liability, legally, it is unenforceable. The only, 
only arena in which from a consumer's perspective you can have 
a waiver of liability like this is in skydiving or bungee cord 
jumping or anything like skiing, downhill skiing.
    But going to an assisted living facility is not like 
jumping out of an airplane. It can't be, and it isn't legally--
there was a case in Delaware that the facility had what I think 
we would recognize as a negotiated risk agreement that stated 
that the agreement absolved the facility from ``personal 
injuries or damages, even if resulting from negligence,'' and 
the contract said that this was in return for the resident 
having ``independence, control, and choice'' and ``a higher 
quality of life.''
    This was negotiated risk, and the resident in this setting 
suffered a fall, had irreversible brain damage. In its defense, 
the facility put forward this agreement and said, well, these 
guys made a choice. They made a contract with us at the front 
end and said in return for living in this more home-like 
environment with a less institutional setting, they have 
released us from liability for these bad outcomes. And the 
trial court in this case said it would be unconscionable to 
enforce this type of waiver of liability in a consumer setting.
    And so, my suggestion on negotiated risk is there needs to 
be some real clarity. I think all these States are playing a 
little fast and loose by putting these terms out there and 
being a little squishy about exactly what they mean. We need 
some real clarity.
    And if we are talking about a conversation, we should talk 
about a conversation. And if we are talking about a waiver of 
liability, we should talk about a waiver of liability. But we 
shouldn't talk about them both simultaneously without 
extricating them from each other.
    Mr. Polivka. Eric, I thought it was decided over 10 years 
ago that there was no waiver of liability? I thought, my 
assumption has been all along that you are talking about a 
continuing care planning instrument. You are not talking about 
a waiver of liability with a negotiated risk.
    I mean, I thought that was decided long ago.
    Mr. Carlson. Well, I would like people to be clear about 
that. Because what I heard, I think Robert stated it 
accurately, which is that classically that is what these 
negotiated risk agreements contain. The Law Review article that 
I have written cites multiple statements by provider attorneys 
and by insurance companies and provider magazines recommending 
negotiated risk agreements for exactly this purpose.
    And I agree in the public policy discussion when it comes 
up. I think people, in defending negotiated risk, say, well, it 
has nothing to do with waiver of liability. It is about 
negotiation and service planning, and that is why we have this 
confusion. We are talking about things without defining them 
adequately enough.
    If everybody in this room agrees that there shouldn't be 
any liability waivers, I think we should write a document and 
say no liability waivers, and that would be tremendous.
    Mr. Polivka. Well, it has never been found to hold in any 
litigation.
    Mr. Carlson. Pardon me?
    Mr. Jenkens. I think where we are with this right now is I 
think there is a role for, as Eric points out, additional 
clarity, some standards, and a definition of what is in it and 
what is out. So Eric cited a pretty egregious case. I think we 
can probably find those cases for almost any subject we would 
choose to discuss.
    I don't think that means that the concept of negotiating 
around risks from a consumer perspective so that they can make 
choices about what they are willing to risk or not risk is a 
bad one. I think we haven't found perhaps the right vehicle or 
at least the right middle ground in that vehicle to do that. It 
is a good area, I think, for further development.
    Ms. Dentzer. Well, just on that point, as we have about 8 
minutes left here, I gather there would be some consensus on 
having a conversation go forward on this topic in particular, 
whether it is a question of clarification at the Federal level, 
whether it is model legislation for the States. Something like 
that to do more to standardize these definitions or----
    Mr. Jenkens. Well, I think--you know, I think the first 
question is, is this important enough? Is there enough of this 
going on in the world to actually have that conversation? Eric 
and I could talk about this for the rest of our lives. We find 
it endlessly interesting.
    Ms. Dentzer. Or might there someday be enough of this going 
on in the world?
    Mr. Polivka. I think there are many other higher 
priorities.
    Mr. Jenkens. That is what I was going to say. I am not sure 
this is a priority among affordable financing, regulatory 
issues, et cetera.
    Ms. Dentzer. Okay. So in the interest of time, let me jump 
back then to the whole discharge area. Any sense of what this 
or another group like it could contribute there, or is that 
another one that is lower down on the list than, say, the 
financing or some of the other issues we talked about? Charley.
    Mr. Reed. Yes. One of the things that was touched on quite 
a bit, I think it begins with the admission criteria and how it 
is disclosed. I think that is the up-front place to start.
    But the other thing we haven't touched on very much is the 
responsibility that State Medicaid programs and long-term care 
programs have in helping out with this. If people really do 
spend down and become Medicaid eligible, the State has a 
responsibility for that person to help them understand what 
their options are and to help them get to those options.
    And so, it is no question that the assisted living facility 
has a responsibility, but so does the State. I think a lot of 
States haven't stepped up to that responsibility yet--that 
there is an obligation that States have to help people 
understand what their options are and how to actually take 
advantage of those options.
    Ms. Dentzer. Okay. Well, moving on, let us jump back to our 
conversation about financing, sources of Federal funding. There 
seemed to be some consensus around having more discussions on 
bringing more people, more entities to the table, whether it is 
the States, whether it is the Feds, et cetera, to get a better 
sense of the sources of financing that could be tapped and how 
they can be best utilized.
    Fair enough? Is that a fair summation of what there was 
clear agreement on? So that would be, if anything, a point of 
consensus this group, I think, would put forward.
    Moving to the first part of our conversation, which was 
around the whole question of what is assisted living anyway? 
What are essential services? What is the core philosophy? We, 
in that context, began to talk a bit about the notion of a 
Federal floor or ceiling. I didn't detect necessarily any 
consensus points there on discussing that going forward. But if 
there were, that is another recommendation that probably is 
worth putting forward.
    Any feedback there? Robert.
    Mr. Jenkens. I think there is a lot of value in discussing 
what a floor should be for the Medicaid-funded programs and 
then whether or not there should be a ceiling. And I think 
there has been a lot of discussion around that over the years, 
the assisted living workgroup initiated by the Special 
Committee on Aging, and then the CO has continued that.
    So I do think it is worth sorting out what is worth paying 
for and what truly brings the values of control and dignity and 
privacy to someone who is receiving Medicaid funding. I would 
be a strong supporter of that.
    Ms. Dentzer. Anyone violently opposed? Larry.
    Mr. Polivka. I am sort of two minds about this. I think 
that what CMS has laid out has been functional. It has worked 
well for a long time for those States that are willing to 
pursue expanded funding through their waiver programs for 
assisted living.
    The problem is, as I see it, and I may be overreacting, but 
in looking at long-term care trends, which I do fairly 
routinely now, it strikes me that States are really going to be 
moving towards managed long-term care designs because of the 
fiscal crisis and because the experience of States like Arizona 
and Wisconsin in developing their managed long-term care 
models. They seem to be cost effective. Some work better than 
others. I think Family Care is better than ALTCS.
    But what you are going to get with that movement is what 
has happened in those States, including Florida to a lesser, 
but substantial extent, and that is massive use of assisted 
living. That is where the expansion is going to occur with 
managed long-term care development, I think, based on the 
experience of the States that have already done it in the last 
10 years.
    As that happens, I think there will be increasing pressure 
on State and Federal officials, legislators, and CMS people, 
and everybody else to begin to look at the issue of floors and 
ceilings from a different perspective than we have since 1990. 
And I have been a pretty laissez-faire, had taken a pretty 
laissez-faire approach to this for the last 20 years. I think 
it has worked well.
    But that may be on the cusp of changing, as we see 
qualitative change in the design of long-term care systems and 
financing over the next 10 years.
    Ms. Dentzer. Josh.
    Mr. Josh Allen. I would just sort of repeat what I 
commented earlier that I think you have to be very careful on 
the services side when you start talking about ceilings. Again, 
these sort of magical lists or criteria that say, no, this 
person is no longer appropriate, I think that flies in the face 
of the concept of consumer-directed and autonomy and choice and 
decision-making.
    So I would just throw out a word of caution about the 
concept of putting a ceiling on what that setting may be for 
each person.
    Ms. Dentzer. And you are the person who wouldn't let 
anybody go skydiving, right?
    Mr. Josh Allen. I would let Robert go skydiving.
    [Laughter.]
    Mr. Polivka. But the problem with that is that you are 
going to have a lot of pressure to move people out of nursing 
homes en masse, and then you run the risk of losing the thing 
that really distinguishes assisted living from nursing home 
care. You are going to blur the boundaries, and you are going 
to lose the quality of life focus that really defines and 
justifies the assisted living model.
    So ceilings may not be the right way to talk about it, 
Josh. But you need to be concerned about at some point with 
these massive changes as they occur, what happens to the kinds 
of places where people live?
    Mr. Josh Allen. Well, but I would argue that many of the 
same types of nursing services and quality of nursing services 
are, in fact, provided in assisted living that just a short 10 
years ago or 20 years ago would have thought to have been only 
appropriate in a nursing home. So I don't know that the sign 
outside the door necessarily dictates whether or not services 
can be provided.
    I think what is different is the model on which they are 
provided. And the very simple example is you walk into 
typically any nursing home in the country, one of the first 
things you will see is a very large and expansive nurses 
station with hundreds and thousands of pieces of paper and 
people in nursing uniforms.
    Most large assisted living communities have those same 
nurses stations. They are just not there for you to see. They 
are hidden behind a wall in a way that is much more comfortable 
for the consumer and feels more like a home. So the same 
services, many of the same services are being provided.
    I don't think saying that just because assisted living 
would start to provide those services would make it no longer 
assisted living. I think it is how they are provided.
    Mr. Jenkens. I think the line is already blurred, and I 
think the Green House Project is a good example of that. In 
skilled nursing, we learned from assisted living and we brought 
it back into skilled nursing. And I think that is a good model, 
and I think we should blur the lines as much as possible to 
give people choices.
    Ms. Dentzer. And as we bring on remote monitoring and other 
technologies, things will change even further.
    Irene, a quick last comment because we are at 4:00 p.m.
    Ms. Collins. I was going to simply say that we have to 
remember the whole discussion is centered around the individual 
and personal choices.
    Ms. Dentzer. An excellent note to end on, lest we think 
this is about something else.
    Anyway, I want to thank all of you for a terrific 
discussion. I believe it is the case that this will not be the 
last of the roundtables or square tables the committee holds as 
it works its way through these issues.
    But thank you very much. It has been a very good and 
vigorous discussion, a candid one. And I am sorry we have to 
end it here, but we hope to continue going forward, and we will 
look forward engaging you all in the future.
    Thank you very much.
    [Whereupon, at 4:00 p.m., the roundtable was concluded.]

                                APPENDIX




                                  
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