A “significant” bump in Ohio’s assisted living waiver rate isn’t just enticing existing operators to provide services to low-income older adults; it’s also attracting developers that want a piece of the affordable senior housing business, according to industry advocates.
A critical access rate increase for the Buckeye State’s assisted living waiver kicked in July 1 after being approved by the Centers for Medicare & Medicaid Services. LeadingAge Ohio President and CEO Susan Wallace said the increase makes it possible for low-income older Ohioans to access the full range of needed services in the communities and neighborhoods they call home.
“Many Ohio assisted living operators have been wary of taking on individuals with limited means because the low reimbursement previously offered through the program threatened their solvency,” Wallace told McKnight’s Senior Living. “Some operators have wanted to specialize in serving low-income individuals by pairing the assisted living waiver and other financing mechanisms.
“The critical access payment makes this type of development possible and will close a gap in Ohio’s home- and community-based service options.”
Ohio Health Care Association Executive Director Peter Van Runkle told McKnight’s Senior Living that his organization has been pursuing the increase for a while, but he was “shocked” at the number of providers that applied and were approved for the waiver.
In the past, Van Runkle said, providers typically “carefully limited” their waiver slots because reimbursement rates were so low. But as more and more providers began accepting more residents via waivers — whether by design or coincidence — interest in improving Medicaid waiver reimbursement rates also picked up.
Van Runkle said the two occurrences were on parallel paths until they came together to push the critical access rate to $145 daily for assisted living and $155 daily for memory care — an 80% increase to the base rate.
That piqued the interest of providers, with 127 of Ohio’s 800 assisted living providers qualifying for the critical access rate after documenting that at least 50% of their residents had been Medicaid beneficiaries during the prior fiscal year.
It’s also fueling an influx of outside developers.
“We’re not only talking about existing providers who are changing their business model or getting support for the business model,” Van Runkle said, adding that some outside providers now are looking at pairing the critical access rate with low-income housing tax credit funding to make affordable assisted living projects financially feasible. “We’re very excited about this. This has been a problem for years and years — the lack of access for Medicaid beneficiaries to assisted living.”
Senior living organizations previously supported revisions to dozens of rules for state home- and community-based waivers, including the assisted living waiver, which included “significant and historic investments” in the programs in Ohio’s biennial budget.
OHCA previously asked the state for another $600 million to help assisted living and other long-term care providers offset the increased costs of providing care. Rates were last updated in 2021 and based on 2019 pre-pandemic costs, but increased staffing and operating costs have hit providers hard, and many providers were not breaking even, Van Runkle had said.
The Ohio Assisted Living Association said it worked with the Ohio Department of Aging and the Ohio Department of Medicaid to help secure the increase.
“We will continue to collaborate with the departments and our providers to provide the ongoing information and resources necessary to deliver seamless and expanded services to our residents and families in Ohio,” OALA Executive Director Victoria L. Gresh, CAE, told McKnight’s Senior Living.
Van Runkle said the increased reimbursement rate not only is great from a policy perspective; it also is helping providers, which now are receiving rates that are closer to the actual costs of care and services.
“The shortfall is so much less,” Van Runkle said of the gap between actual costs versus reimbursement rates.
He added that he’s seeing a trend across the country toward better reimbursement for Medicaid assisted living services, adding that it provides a middle ground to improve access and provide better options for older adults who can’t stay home safely or don’t want to move into a skilled nursing facility.
