CMS is responsible for oversight of  state Medicaid programs. A state Medicaid program can  have multiple HCBS programs operating under different federal  authorities. 3. 5. States Reported Spending $10 Billion on More than 130 Programs Covering Assisted Living Services in 2014

		Forty-Eight States Reported Spending $10 Billion on Assisted Living Services for More than 330,000 Medicaid Beneficiaries in 2014; Spending per Beneficiary Varied Widely by State

Forty-eight state Medicaid agencies reported collectively spending about  $10 billion in state and federal Medicaid funds for assisted living services  in 2014, according to our survey. State Approaches for Overseeing Health and Welfare of Beneficiaries in Assisted Living Services Varied, Including Monitoring Incidents of Beneficiary Harm

		Oversight by State Medicaid Agencies Varied in the Functions Delegated to Other Agencies, the Information Used, and the Actions Taken to Correct Any Identified Problems

State Medicaid agency approaches for oversight of assisted living  services varied widely in terms of who provided the oversight for their  largest programs, according to their responses to our survey. In many cases, the state Medicaid agency did not review all  information sources reviewed by other agencies. State Medicaid Agencies Varied in How They Monitored Incidents of Potential or Actual Harm to Medicaid Beneficiaries Receiving Assisted Living Services

For their largest HCBS programs that covered assisted living services,  the 48 states varied in how they monitored “critical incidents” that caused  actual or potential harm to Medicaid beneficiaries in assisted living  facilities. The number of  critical incidents reported in these states ranged from 1 to 8,900. States also cited lacking a system to collect critical  incidents (9 states), and that the system for reporting could not identify  whether a resident was a Medicaid beneficiary (5 states). State Medicaid agencies also varied in whether they made information on  critical incidents and other key information readily available to the public. For example, 34 of the 48 states reported that they made critical incident  information available to the public by phone, website, or in person, and  the remaining 14 states did not have such information available at all. In its  guidance implementing the 2014 requirements, CMS noted that state  associations and state representatives’ work groups had agreed that  “health and welfare is one of the most important assurances to track, and  requires more extensive tracking to benefit the individuals receiving  services, for instance by using data to prevent future incidents.” As a  condition for approval of their HCBS waiver applications for each of the  requirements, states must identify and agree with CMS on the type of  information they will collect to provide as evidence that they will meet the  requirements. In  particular, CMS noted the state provided insufficient information regarding  the number of unexpected or suspicious beneficiary deaths. Despite the importance of state critical incident  management and reporting systems to protecting the health and welfare  of beneficiaries, CMS lacks written requirements that states provide  information needed for the agency oversight of state monitoring of critical  incidents. Such a system is also consistent with federal internal  controls standards which specify, in particular, the need for federal  agencies to have processes that identify information needed to achieve  objectives and address risk. Without annual critical  incident reporting, CMS may be at risk of (1) not having adequate  evidence that states are meeting CMS requirements to have an effective  critical incident management and reporting system and of (2) being  unaware of problems with states’ abilities to identify, track, and address  critical incidents involving Medicaid beneficiaries. We found that CMS was not always requiring  states that contracted with managed care organizations to provide  long term services and supports to report to CMS sufficient  information on critical incidents and other key areas needed to  monitor beneficiary access and quality. HHS concurred with this recommendation and stated that the agency  would take this recommendation into account as part of an ongoing  review of its 2016 Medicaid managed care rule. In particular, CMS now has multiple requirements for states  to safeguard beneficiaries’ health and welfare, including requirements to  operate an effective critical incident management and reporting system to  identify, investigate, and address incidents of beneficiary abuse, neglect,  exploitation, and unexplained death. However, CMS’s ability to effectively monitor how well states are assuring  beneficiary health and welfare is limited by gaps in state reporting to  CMS. Lacking clear guidance on the reporting of deficiencies may  result in a delayed recognition of problems that may affect beneficiary  health and welfare. In its written comments, the department concurred with two  of our three recommendations, specifically, that CMS will clarify  requirements for state reporting of program deficiencies and ensure that  all states submit required annual reports on time. A number of states in our survey cited common factors as creating the  greatest challenges to a beneficiary’s ability to access assisted living  services, including  the number of assisted living facilities willing to accept Medicaid  beneficiaries (13 states or 27 percent of the 48 states) program enrollment caps (9 states or 19 percent of the 48 states) beneficiaries’ inability to pay for assisted living facility room and board  (9 states or 19 percent of the 48 states), which Medicaid typically  does not cover  low rates the state Medicaid program paid assisted living facilities (8  states or 17 percent of the 48 states).
Why GAO Did This Study

The number of individuals receiving long term care services from Medicaid in community residential settings is expected to grow. These settings, which include assisted living facilities, provide a range of services that allow aged and disabled beneficiaries, who might otherwise require nursing home care, to remain in the community.
State Medicaid programs and CMS, the federal agency responsible for overseeing the state programs, share responsibility for ensuring that beneficiaries' health and welfare is protected. GAO was asked to examine state and federal oversight of assisted living services in Medicaid. This report (1) describes state spending on and coverage of these services, (2) describes how state Medicaid agencies oversee the health and welfare of beneficiaries in these settings, and (3) examines the extent that CMS oversees state Medicaid agency monitoring of assisted living services.
GAO surveyed all state Medicaid agencies and interviewed officials in a nongeneralizeable sample of three states with varied oversight processes for their assisted living programs. GAO reviewed regulations and guidance, and interviewed CMS officials.

What GAO Found

State Medicaid agencies in 48 states that covered assisted living services reported spending more than $10 billion (federal and state) on assisted living services in 2014. These 48 states reported covering these services for more than 330,000 beneficiaries through more than 130 different programs. Most programs were operated under Medicaid waivers that allow states to target certain populations, limit enrollment, or restrict services to certain geographic areas.
With respect to oversight of their largest assisted living programs, state Medicaid agencies reported varied approaches to overseeing beneficiary health and welfare, particularly in how they monitored critical incidents involving beneficiaries receiving assisted living services. State Medicaid agencies are required to protect beneficiary health and welfare and operate systems to monitor for critical incidents—cases of potential or actual harm to beneficiaries such as abuse, neglect, or exploitation.
Twenty-six state Medicaid agencies could not report to GAO the number of critical incidents that occurred in assisted living facilities, citing reasons including the inability to track incidents by provider type (9 states), lack of a system to collect critical incidents (9 states), and lack of a system that could identify Medicaid beneficiaries (5 states).
State Medicaid agencies varied in what types of critical incidents they monitored. All states identified physical, emotional, or sexual abuse as a critical incident. A number of states did not identify other incidents that may indicate potential harm or neglect such as medication errors (7 states) and unexplained death (3 states).
State Medicaid agencies varied in whether they made information on critical incidents and other key information available to the public. Thirty-four states made critical incident information available to the public by phone, website, or in person, while another 14 states did not have such information available at all.
Oversight of state monitoring of assisted living services by the Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health and Human Services (HHS), is limited by gaps in state reporting. States are required to annually report to CMS information on deficiencies affecting beneficiary health and welfare for the most common program used to provide assisted living services. However, states have latitude in what they consider a deficiency. States also must describe their systems for monitoring critical incidents, but CMS does not require states to annually report data from their systems. Under federal internal control standards, agencies should have processes to identify information needed to achieve objectives and address risk. Without clear guidance on reportable deficiencies and no requirement to report critical incidents, CMS may be unaware of problems. For example, CMS found, after an in-depth review in one selected state seeking to renew its program, that the state lacked an effective system for assuring beneficiary health and welfare, including reporting insufficient information on the number of unexpected or suspicious beneficiary deaths. The state had not reported any deficiencies in annual reports submitted to CMS in 5 prior years.

What GAO Recommends

GAO recommendations to CMS include clarifying state requirements for reporting program deficiencies and requiring annual reporting of critical incidents. HHS concurred with GAO's recommendations to clarify deficiency reporting and stated that it would consider annual reporting requirements for critical incidents after completing an ongoing review.