Filling Your Assisted Living Facility with Medicaid Residents

May 27, 2024

Medicaid can be a vital revenue source for your assisted living facility. When you have Medicaid residents, you receive payments from different channels, primarily through a daily rate and a resident's Social Security contribution. For instance, you might receive around $100 per day per resident from Medicaid, totaling $3,000 monthly. Additionally, residents contribute a portion of their Social Security income, often around $800, bringing the total to $3,800 per month per Medicaid resident.

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Certification Process

Your facility must be certified to accept Medicaid residents. This involves applying through your state’s Medicaid office or third-party administrators. The process requires strict adherence to guidelines and thorough documentation. It’s crucial to follow all instructions meticulously to avoid delays, as I experienced in my Colorado facility, where certification took longer due to administrative hurdles.

Finding Medicaid Residents

Once certified, finding Medicaid residents is pretty straightforward. Partner with healthcare providers such as rehab facilities and hospitals, as they can refer patients to your facility. Work with social workers and case managers to help their clients (your residents). And highlight that you accept Medicaid in your marketing efforts to attract potential residents.

Maximizing Revenue

While Medicaid rates might be lower than private pay rates, you can maximize revenue by placing two residents in one room. This strategy can effectively double your income per room. For example, two residents, each contributing $3,800, would generate $7,600 from one room. This approach can be particularly helpful in states where private pay residents willing to pay higher rates are harder to find.

Pros and Cons of Medicaid

The high demand for Medicaid means a large pool of potential residents, and regular payments from Medicaid can provide financial stability. On the downside, managing Medicaid billing and staying compliant with state regulations can be time-consuming, and some reimbursement rates may be lower than private pay, which can affect profit margins.

The Importance of Staying Updated

Staying updated with state regulations and billing practices is essential to ensure timely and full payments. Any lapse in updating PARs (Prior Authorization Requests) or PETIs (Personal Expenses and Trust Income) can disrupt your revenue flow. If you need help figuring out the process, check out the Assisted Living Investing Mastermind program to help you get started.

Final Thoughts

Accepting Medicaid residents can be a strategic way to fill your assisted living facility and ensure a steady income. Despite the administrative work and lower reimbursement rates, the benefits of consistent occupancy and predictable payments make Medicaid a viable option for new assisted living facilities. If you’re ready to explore this option, download our comprehensive Underwriting Calculator to start planning your Medicaid strategy today. Share your experiences with Medicaid in assisted living or ask questions in the comments below—we're here to help you succeed.

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