Assisted living regulations come of age.

As the "new kid" in the long-term care continuum, assisted living is facing many of the same regulatory challenges that other long-term care alternatives have had to address. For nursing home providers, in particular, the questions now being asked of the assisted living industry must sound familiar: What is the "right" amount of regulation to impose on assisted living? Would such regulations truly guarantee a consistently high quality of care?

The very nature and philosophy of assisted living also poses its own quandaries. In writing regulations for assisted living, each state must address how to place "restrictions" or limitations on an entity that is defined by its creativity and its flexibility, to tailor a model based on residents' needs. This issue, more than any other, has presented and will continue to present both a challenge and an opportunity for state regulators. Staffing ratios, staff training and the administration of medications are among the key areas where these issues will have a significant impact on assisted living.

Many states have recently revised their assisted living regulations in an attempt to keep pace with the growth of the industry and the changing needs of the residents it serves. While all states have regulations that may be applicable to assisted living facilities in one way or another, 24 states now have regulations specific to them. Another three states have new rules pending.

1999 is expected to be a watershed year for regulating assisted living. Even as states are working to sort out their regulations, federal attention is now turning toward the industry in earnest. The General Accounting Office, the Institute of Medicine and the Department of Health and Human Services/Office of the Assistant Secretary for Planning and Evaluation are all expected to release studies on assisted living this year. The result of these studies is certain to be a heightened interest in possible federal regulation.

Based on my research of state regulations over the past year, there are several key issues regulators will be facing when they either revise existing regulations or adopt new ones. First, the definitions of resident admission and retention criteria are among the most critical issues because they are largely responsible for how a state defines assisted living-as a medical or social model, as a nursing home replacement or as part of the continuum of care.

Interestingly, a recent survey of assisted living providers by the Assisted Living Federation of America and PricewaterhouseCoopers LLP found that 40% of responding facilities would admit or retain residents with greater needs if state regulations allowed them to do so. Providers also reported that about 12% of consumers who wished to move into their facilities in 1997 could not be admitted because their care needs exceeded the level allowed by regulations.

Another general trend is that regulators are making regulations more flexible or building in the use of waivers concerning such requirements as Certificates of Need (CON). While 38 states have a CON or health planning process in place for nursing homes, many states have provided a pilot project, expedited review process or exemption from the CON for assisted living providers. Only six states currently require a CON for assisted living.

Assisted living providers generally oppose the CON process because it can be costly, time-consuming and even prevent a provider from entering a promising market. Providers believe consumers are best served by an industry that is free to compete and explore innovative approaches to improve the quality and cost-effectiveness of its services. Also key in the argument against the use of CONs is that assisted living is intended to be a truly residential setting, with healthcare services provided more on the home healthcare model than that of nursing homes. About 86% of facilities in the recent ALFA survey reported the presence on their premises of home health providers who contract directly with the client.

Another regulatory issue in some states is that existing regulatory specifications may not accurately reflect current or modern assisted living services and facilities. While a modern assisted living facility may technically fall within a licensure category, it is unlikely that the regulations accurately reflect today's assisted living residences. This is particularly relevant in CON states, when a comparison of older existing facilities and new assisted living projects is not appropriate, so different is the array of service offerings.

The much-anticipated GAO report on assisted living is scheduled to be released in March. Certainly, heightened awareness of assisted living will bring about changes in the industry. What these changes will be, and how they will occur, is unclear. Now that there is a national focus on assisted living, will the industry take a different direction? Will states remain flexible enough to create a product that is reflective of its population, or will the thought that "Big Brother" is watching cause state regulators to adopt a more stringent approach to the regulatory process?

Assisted living is, to a large extent, caught in the middle between its need for flexible state regulations - in order to meet consumers' quality-of-life goals - on the one hand and the prospect of more federal involvement on the other. Providers hope to avoid the problems associated with the federal government's involvement in long-term care, since that experience was what led to the creation of the assisted living industry in the first place. What will remain crucial to the industry is an ability to demonstrate that what federal lawmakers may be looking for is already well on its way to being achieved.

Matthew Murer, Esq., is a healthcare attorney with Holleb & Coif in Chicago and author of a new Assisted Living Federation of America (ALFA) book entitled Assisted Living Regulations: A State-by-State Profile. For further information, call ALFA at [phone].