Evictions & Denied Entry to Assisted Living for Medicaid Beneficiaries/Applicants

Introduction

Joann has lived in an assisted living residence for two years, paying out of pocket until she could no longer afford it. Due to her limited financial means (income and assets), she is now a Medicaid beneficiary. The assisted living facility, however, is refusing to accept Medicaid as payment. The facility has presented her with a discharge notice, or in other words, an eviction notice for “nonpayment”, giving her 30 days to move out. What should Joann do? She cannot continue to pay privately and she has nowhere to go.

Bill, who can no longer live at home alone due to progressing Alzheimer’s disease, recently become a Medicaid beneficiary. His family is desperately looking for an assisted living facility to accept him as a new resident. One after another, facilities are rejecting him since he is on Medicaid. What happens now? What can the family do?

Sadly, the above scenarios are quite common. This is because, plain and simple, private pay clients are often more desirable to assisted living providers. According to the Genworth 2024 Cost of Care Survey, the nationwide average cost of assisted living is $5,900 / month. For a Medicaid beneficiary, an assisted living facility tends to receive an amount well below that of the private pay rate. And unfortunately, unlike with nursing homes, which are regulated (checked up on) by the federal government to ensure they are complying with critical laws, there is no federal oversight of assisted living facilities to ensure the rights of assisted living residents are protected.

Are there Eviction Protections for Medicaid-Funded Assisted Living Residents?

Yes, as of March 2023, the HCBS (Home and Community Based Services) Final Rule, a set of federal rules established by CMS (Centers for Medicare and Medicaid Services), became effective, and among these rules is minimal eviction (involuntary discharge) protections for Medicaid beneficiaries who live in residential facilities that are provider-owned or controlled, like assisted living facilities. For these protections, one must receive assisted living services via a Medicaid HCBS program. This includes 1915(c) HCBS Medicaid Waivers, 1915(i) HCBS State Plan Option, 1915(k) Community First Choice State Plan Option, and 1115 Demonstration Waivers through which HCBS are provided.

To be clear, assisted living residents who receive Medicaid-funded assistance, like personal care assistance and / or homemaker services, via Medicaid’s Regular State Plan are not extended these protections under the HCBS Final Rule. However, the majority of states provide Medicaid-funded assisted living services via 1915(c) HCBS Medicaid Waivers.

Per the HCBS Final Rule, Medicaid-funded assisted living residents must have “comparable protections” from eviction as those that exist in landlord-tenant laws. In other words, their eviction protection should be equally strong as those that exist for the typical renter (i.e., house / apartment) in the state, county, and city in which the assisted living facility is located. At a minimum, an assisted living resident should not be evicted without a written discharge notice from the facility and an opportunity to appeal the decision. An “appeal” is a legal process through which a decision can be challenged, reviewed, and potentially changed.

While some states include residents in residential facilities, including assisted living facilities, under local landlord-tenant laws, not all states do. In these states, Medicaid-certified assisted living facilities must provide Medicaid-funded HCBS residents an agreement in writing (i.e., residency agreement, lease) that details the process of eviction and appealing eviction that are “comparable” to the landlord-tenant laws.

State-Specific Eviction Protections

States may have eviction protections for Medicaid-funded HCBS assisted living residents beyond that of the minimal federal protection. According to the Kaiser Family Foundation (KFF) Medicaid HCBS Program Survey 2024, approximately 50% of states offer eviction protections for assisted living Medicaid beneficiaries who cannot pay their monthly fees. In this situation, 15 states require that the resident be moved to a new living arrangement. Furthermore, 9 states prohibit assisted living facilities from evicting Medicaid beneficiaries, given they are paying their state-specified room and board payment, and 2 states prohibit eviction of those who receive home care via a Medicaid managed care plan, given they pay the required payment as determined by their managed care plan. Furthermore, KFF reports that Kansas does not allow eviction for any reason.

Reasons Assisted Living Facilities Evict Residents

Assisted living facilities evict residents for a number of reasons. Depending on the state and the nuances of the situation, these evictions may or may not be legal or may fall into a gray area. We explore the first two reasons more fully in the following sections.

1. Nonpayment – Failure to pay fees within a specified period of the due date (i.e., run out of money, lose Medicaid coverage). Some facilities try to evict a private pay resident for “nonpayment” when they run out of money and transition to Medicaid.

2. Changing Care Needs – The facility is unable to meet a resident’s changing care needs. In other words, a resident requires more care than the facility can provide.

3. Closing – The facility is changing its use and will no longer operate as an assisted living residence or the facility is closing.

4. Resident Behavior – The resident exhibits behavior that is dangerous to themselves or to others or fails to follow facility policies, as written in one’s assisted living agreement.

5. Illegal Activity – The resident fails to comply with state/local law.

Eviction of A Private Pay Resident Who Becomes Medicaid-Eligible

With Medicaid’s asset limit of $2,000 (in most states), it is not uncommon for a senior to enter an assisted living residence as a private pay resident and then apply for Medicaid once when they’ve “spent down” their assets. When a private pay resident becomes a Medicaid beneficiary, an assisted living facility may not want to accept the change in payment. As mentioned previously, the rate for services, as well as for room and board, is typically less for a Medicaid-funded assisted living resident than it is for a private pay resident. However, based on federal law, an assisted living facility licensed to accept Medicaid payments must accept the Medicaid rate as “payment in full”. This means that the assisted living facility is fully paid and no existing debt remains.

Regardless of the law, an assisted living provider might still refuse Medicaid as payment and then attempt to evict the resident for not paying their monthly fees. Given a Medicaid-certified facility must accept the Medicaid-rate, “nonpayment” is not a valid reason. Afterall, it is the assisted living facility that is refusing to accept the payment. If a facility is trying to evict a resident for this reason, they should not move out. Instead they should contact their local Ombudsman, an independent agency that addresses and resolves complaints made by or for persons residing in long-term care facilities, like assisted living residences.

Note: Some assisted living facilities that accept Medicaid may only be partially certified. This means that the facility limits the number of Medicaid-funded assisted living residents, or in other words, limits the number of units available to these persons. Therefore, a private pay client that has become a Medicaid beneficiary might be told that there is no Medicaid-certified unit available and the facility might proceed in trying to evict them. If this happens, the assisted living residence’s certification should be double checked and the next available certified unit should be requested.

Eviction Due to Inability to Meet a Resident’s Needs

While evicting an assisted living resident for an inability to meet their changing care needs is a valid reason for eviction, assisted living facilities may use this reason dishonestly to “boot” an undesirable resident. This could be because they transitioned to Medicaid from private pay or the resident is difficult and the facility does not want to deal with them. While federal protections require that nursing homes document the reasons a facility cannot meet a resident’s needs, this is not federally required of assisted living residences.

If an involuntary discharge notice is received for this reason, one should not move straight away. One should first read the resident agreement to learn how evictions are handled. Furthermore, a physical exam by a doctor to evaluate if they think assisted living is still a feasible option is suggested. One should also contact their local Ombudsman to file a complaint and start the appeal process, if need be.

Can an Assisted Living Facility Refuse to Accept a Medicaid Beneficiary?

Yes, in most states, an assisted living facility can refuse to accept a Medicaid beneficiary. However, per the KFF Medicaid HCBS Program Survey 2024, two states (Oklahoma and New Jersey) require that assisted living residences accept Medicaid-funded persons who are enrolled in Home and Community Based Services as new residents. Furthermore, an additional eight states require that assisted living residences that receive Medicaid payments accept Medicaid beneficiaries who are receiving Home and Community Based Services. These states are Arkansas, Maine, Maryland, Nevada, New Mexico, Rhode Island, Texas, and Vermont (limited to persons with Intellectual and Developmental Disabilities).

Important: Some assisted living facilities may try to enforce a “duration of stay”. This is a period of time in which an assisted living resident is required to pay privately before the facility will accept Medicaid. While these provisions are legally prohibited, some assisted living facilities my still include a duration of stay provision in their admission agreement. One should read through the admission agreement and refuse to sign any duration of stay agreement.