Unlocking Medicaid Secrets for Assisted Living Success

assisted living business documents assisted living facility license assisted living facility requirements assisted living license application process assisted living licensing department assisted living policies and procedures how to obtain an assisted living license residential assisted living facility residential care licensing state department of health assisted living Nov 06, 2024

Starting an assisted living business is a rewarding venture that allows you to make a significant impact on the lives of seniors. However, before you can open your doors, you'll need to navigate the complex process of obtaining the required licenses. Licensing is a crucial step that ensures your facility meets all necessary standards and regulations for providing care. In this guide, we'll walk you through the steps you need to take to secure your assisted living facility license.

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Step 1: Establish Contact with the State Department of Health

Your first move towards acquiring a facility license should be reaching out to your state’s Department of Health. This department is your go-to resource for understanding the specific requirements in your state. Establishing a relationship with them early on is essential because they can guide you through the entire licensure process and connect you with the appropriate licensing agency.

Most states have a dedicated department for healthcare facility licensing. Once you’ve made contact, you'll likely be directed to a webpage or provided with a PDF that outlines the necessary documentation and instructions for completing your application. Building a good rapport with your contacts here is crucial as they will be instrumental in helping you navigate the licensing process.

Step 2: Gather the Necessary Documentation

Each state has its own set of requirements for licensing an assisted living facility, and these requirements can vary depending on the type of care you plan to provide. While specific requirements may differ, there are some common elements most states will require:

General Information: Business name, physical addresses (including additional locations if applicable), phone numbers, email addresses, and details about key individuals involved in the facility, such as owners, directors, or managers.
Type of Care Provided: Outline the types of residents your facility will serve, such as those requiring memory care, assistance with daily living activities, or independent living arrangements.
Ownership Disclosure: Provide a detailed breakdown of your organization’s ownership structure, including any partners or stakeholders.
Administrator Information: Include details about the facility’s administrator, such as their full name, professional license number, contact information, and relevant qualifications.
Proximity to Services: Document the proximity of your facility to essential services like hospitals, pharmacies, and emergency services, along with estimated travel times.
Floor Plan: Submit a detailed floor plan of your facility, including common areas, living spaces, dining areas, and outdoor spaces, following state requirements.
Building Inspection: Prepare for inspections by the state or fire department to ensure your facility meets all safety codes and regulations.
Articles of Organization: Include legal documents related to your business entity's formation, such as the articles of organization and operating agreement.
Lease Agreement: If leasing the facility, provide a copy of the lease agreement, showing your legal right to operate the facility at the specified location.
Policies and Procedures: Prepare a comprehensive document detailing your facility’s operations, including staff guidelines, resident rights, admission and discharge policies, safety protocols, and emergency procedures.

This list may vary slightly depending on your state, but having these documents ready will help streamline the licensing process.

Step 3: Understand the Communication Process

Effective communication with your state’s licensing department is key to a smooth application process. Some states may require communication through a specific portal rather than email, which can be challenging if you’re unfamiliar with it. Be sure to clarify the preferred method of communication and monitor the portal regularly for updates or requests for additional information.

Staying on top of this communication will help prevent delays and keep your licensing process on track.

Step 4: Prepare for Inspections and Timelines

One critical part of the assisted living licensing process is the facility inspection, usually conducted by the state or fire department (or both). These inspections ensure your facility complies with all safety and regulatory standards. Depending on how busy your local department is, the inspection phase can take anywhere from 2 to 10 weeks.

On average, the entire licensing process can take 4 to 8 weeks from the time you submit your application, but this timeline can vary depending on your state’s backlog and the complexity of your policies and procedures.

Step 5: Store and Organize Your Documentation

To make the licensing process more efficient, create a centralized storage system for your documentation. Using a cloud-based platform like Google Drive allows you to organize, update, and access all your essential paperwork quickly. This approach not only speeds up future submissions to lenders or other entities but also makes it easier to maintain compliance with state regulations.

Final Thoughts

One of the biggest takeaways from this guide is the importance of starting the assisted living licensing process as early as possible. Even if you’re still searching for the perfect facility location, it’s wise to contact your state’s Department of Health and begin gathering the necessary documents. Taking a proactive approach will save you time and reduce stress, leading to a smoother experience when launching your business.

By understanding the licensing process and preparing in advance, you'll be better equipped to provide exceptional care to your residents while ensuring that your facility operates legally and efficiently. Whether you’re starting a new business or acquiring an existing one, mastering these procedures will help you navigate the complexities of the assisted living industry and create a safe, compliant environment for your residents.

If you need help creating a business plan as you get started with your licensing process, download our Business Plan Checklist. It provides a comprehensive guide to creating a successful business plan, helping you lay a solid foundation for your facility.

Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.

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Transcript

00:00:01
[Music] hey guys it's brandon gustafson welcome back to assisted living investing today uh excited to have you on the channel i've got a really exciting topic that i can't wait to get into with you uh the secret about assisted living and medicaid and how it works i'm really excited to get into this one for you make sure you visit me on assistedlivinginvesting.net we'd love to see you over on the website uh to get some free resources and subscribe to my newsletter for future content

00:00:39
make sure you give me a big thumbs up like the video comment down below subscribe to the video make sure you ring that bell uh to be notified of new and future content as i get it out there and then make sure you follow me on all my other social media platforms in our last video we got into how the process for getting certified as a medicaid profi provider what it looks like how it works what can you what you can expect for that process and how you can just kind of go about it and learn what that

00:01:06
process is like like i said today we're going to get into the secret about medicaid payments and assisted living i'm going to get into this and kind of explain to you the process of exactly how it works so you understand what it's like and so it's not scary when somebody tells you yeah i've got a lot of medicaid residents in my facility i want to give you a good overview of exactly what this looks like so you understand it and can know what to expect is you get residents that

00:01:31
might be medicaid or you're looking at purchasing a facility that is a medicaid facility uh what that means and what that's going to do to your bottom line so i'm excited to get into that with with the channel today so first billing medicaid uh what is that what's that like uh what does it look like so after you become a certified medicaid provider you are able to start building medicaid the services that you're renting you're able to start kind of doing that process uh the state uh like i mentioned is

00:01:58
going to set a daily rate uh for what you can bill your assisted living services uh the services that you're rendering to your residents you know let's let's just say it's a hundred dollars per day um just so we get round numbers there's 30 days in a month that's three thousand dollars per month per resident that's kind of how it works um that would be a high rate i'm typically seeing things that are probably closer to 70 80 a day per resident but each state is going to be

00:02:26
different so you want to look at what your rates are for the state you can actually find those online um if you know what to look for googling something like daily medicaid rates for assisted living in my state and you can start kind of digging into that and finding out what that information looks like and so you can have a good expectation of of what to expect as you're doing things in your specific state if you're under contract with a with another person you can also ask them what the medicaid billing

00:02:54
process is what the daily rate is that they get for each of their residents you're then going to work with each of your residents case managers you're going to provide them with information on the amount of care that you are giving to your resident the amount of care that you're giving to each of your resident it's extremely important that you document all this for multiple reasons one you need to do it your rendering services you need to have those those medical records on file in

00:03:20
case you know somebody comes in and asks for them like a doctor or an attorney or something like that i just want to make sure everything is there but it also is extremely important because your reimbursement rate is often going to be tied to the amount of care that you are providing to your resident so the more that you document the more information you want to still be truthful but the more that you're putting in there the more accurate you are with exactly what you do the likelihood of you receiving a higher

00:03:47
amount of reimbursement it's going to go up and that's what you want to do so make sure you're documenting everything that you do make sure you're directing your administrator your caregivers to document everything that they are doing all the care that they are rendering to your residents make sure that that is documented in your um your electronic healthcare record you want to make sure that that information is in there so the actual process for medicaid billing you're going to log into that medicaid

00:04:16
portal so you get in there um you know whether it's the state system or the mco system you're going to log in to it and and get in there then you're going to enter the residence information so this could be their name it could be their medicaid number their id sometimes it'll ask for like date of birth a lot of the portals look the same and many of those portals aren't going to save that information for you so you don't have to enter it everything every single time you don't

00:04:42
have to um put it in there and uh you know just like remember uh whatever you don't have to have a separate spreadsheet that gives you the information a lot of times it's gonna save it for you which is gonna save you a lot of time but you gotta enter that residence information and then you're going to enter that cpt code which is like a care code the type of care that you're rendering in assisted living i can't remember exactly what the care code is but it's going to be consistent

00:05:05
you don't have to say you're not saying for every single care item that you did that we talked about just a second ago you're not entering a cpt code for those you're just entering the assisted living code and then the case manager has worked with you and with the state and have determined what that daily rate is is going to be for the resident based off the amount of care that they are receiving now you can go in and you can bill medicaid at any time like i mean you could do it every day if you really

00:05:34
wanted to generally the state the mco they're only going to process those payments like on a weekly basis so we typically are billing once or twice a month um just kind of depending on on what the process looks like and what we need if we need to get extra cash in there we were doing it more frequently now that we have things a little more stabilized we're just kind of doing it on a monthly basis and we just get one check at the beginning of the month for all the services from the previous month

00:06:00
you can go in there and you can bill as many times as you want just go in anticipating that you're only gonna get paid once a week so that you know you don't have some expectation where you're going to get a daily check for medicaid that's not going to happen but you can get it weekly if if that's what you need to do next is the payment breakdown for medicaid residents and this is the part that i think a lot of people just don't understand about medicaid and how it works and with your

00:06:24
residents this is the big secret that i've been teasing a little bit something that you know you probably don't know is you actually get paid twice you get paid two times for your medicaid residence uh part one is this medicaid payment that we've been talking about so you're gonna go through that whole billing process that i outlined just just a second ago you're gonna get that daily rate for them the second part is actually money that you receive from the resident or their payee now a payee is the person

00:06:52
that has been designated to be in charge of or manage your residence finances um so that's what a payee is um you may or may your residents may or may not have a payee but regardless this is the payment you are receiving directly from them now that payment that comes from the resident or their payee is coming from social security and it's also set by the state's department of health as far as how much you can actually bill them for and collect from them um and it's also kind of dependent on the

00:07:22
amount of care just depends on the state and how they have things set up um in in idaho they do a separate thing that's called a share of cost and we build that directly to the resident in colorado the amount of care is actually roped into their um their daily rate and and it's administered to us that way so it's going to depend on the state and how much you are able to collect from them but you know it gets to the point where you're able to uh you're gonna get two payments which is great um so when the

00:07:51
state sets that amount of money that you could collect directly from the resident they set kind of how it works is they set a minimum amount of money that the resident needs and must have for personal funds and this can be things like you know going and buying toiletries going um going out to eat different things like that they'll tell them again let's just use a number um you get a hundred dollars per month that you get to use whatever you want uh for your personal use um other than that

00:08:21
you need to pay the rest to the assisted living facility who is giving you your care because they're paying for all of your your food you know air conditioning tv services all those things and so the state will tell you exactly what you can bill to each of your residents and you know say it's six seven hundred dollars a month you collect that to them just like you would collect your payments from your private pay residents so this means that uh while you're going through the process to become a

00:08:48
certified medicaid provider you're actually able to continue collecting money from your residence so that portion that is the the private pay the the person that is the resident's responsibility you can collect that money from them while you're still waiting on medicaid to get you certified um through the process and then you'll be able to back bill um for that money that you are waiting on with medicaid um so you're able to still have a little bit of cash coming in which is

00:09:15
which is helpful especially if you're trying to make payroll you're trying to buy groceries and things like that you're you're not going to just be out there alone waiting on medicaid to just process everything for you you can you can function and move along which is which is extremely helpful now overall in general your medicaid residents are going to pay less a less a lower monthly rate than your private pay residence but something that they have to consider is medicaid residents are they can have a

00:09:44
shared room and they're going to be more likely to share that room compared to a private pay resident so you're able to get multiple residents in in one room as long as you're kind of following the square footage rules and regulations that the state planning department has set forth they'll tell you how many how many square feet each resident needs there are certain guidelines you have to follow in each state for that so make sure you get with the planning department to figure out exactly what

00:10:11
that is but if you're able to get two residents in there and they're each paying you you know 27 2800 a month whereas with a private pay resident you're only getting 45 4 800 a month you're actually going to be making more per unit for each of your rooms there are certain regulations and things you've got to follow with medicaid you're tying it to a government agency for good or bad and so there are pros and cons to it but that's something that you want to consider a few

00:10:39
rooms that are big enough that you can have multiple residents in it going the medicaid route and having shared rooms might be a really good option for you so that you can maximize the amount of space that you have in the home and maximize the amount of residents that you're able to put into the facility so that's just something that you want to be aware of as you're getting into especially residential assisted living that you can take advantage of that as a strategy to get more residents in your

00:11:04
home and increase your cash flow now the process for collecting non-medicaid payments from residents is very similar actually to the process you go through for collecting it from your private pay residence this portion is is you know you're you're billing it to them you're sending them an invoice it says you owe me x amount of money you're sending that to them on the same day that you're sending it to your private pay residents they have to follow the exact same rules they can be

00:11:28
removed from the home if they're not fulfilling their obligation to pay you those types of things so they do have to pay you for that and it comes directly from from them or their payee we for our residents we do check payments we looked at doing some transfers and direct deposits and things like that but there are fees associated with it and we just weren't comfortable with carrying that or handing that off to our our residents we received some feedback that people weren't crazy about they

00:11:54
would probably continue doing check payments if we were to pass those fees along so that's what we decided to do but check with your bank check and see if that's something you could do with direct deposit we do check payments directly from them we'll bill them we'll give them an invoice say you owe us x amount of dollars we'll collect that money from them um we give them late fees you know typically what you would see with a private pay resident we're doing that with our medicaid residents for the

00:12:19
portion that they are responsible for so to just do a quick recap of this video we've been talking about the secret about medicaid payments and assisted living we went over uh how you build medicaid the payment breakdown for medicaid residents and collecting non-medicaid payments from the residents uh you know your private pay residents or your medicaid residents for their share of of the cost that they have to to pay you for next time we'll be actually getting into the process of getting your facility

00:12:44
licensed so we i referenced that a lot as we were going through these videos on medicaid and the process there but next time i want to start getting into the process for what you need to do to get your facility license so you can then kind of function and operate as a facility i hope this video was helpful i hope uh learning that secret about medicaid and how it works was was insightful for for you make sure you give me a big thumbs up make sure you like the video subscribe to the channel ring that bell

00:13:10
so that you get notified when i put future content out there make sure you comment down below let me know if this was helpful let me know what other information you want to learn about medicaid uh the process and and the little intricacies that happen with with medicaid and being a medicaid provider i'd love to share that information with you so make sure you comment down below uh make sure you follow me on all my other social media platforms links are down in the bio and also make sure you

00:13:33
follow me uh and and get on assistedlivinginvesting.net i'd love to have you over there for the free resources and to join my mailing list for future content i'm excited that you were here with me today i hope this content was helpful and i'm excited to see you next time thanks for watching have a great day thanks [Music] you

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