Home Health Care Within Independent Living Communities

by Foley & Lardner LLP
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Operators Should Keep an Eye on Regulations and Regulatory Developments

The provision of home health care services within independent living facilities (ILFs) is becoming more commonplace in some areas, allowing some ILF communities (which in most states are unregulated) to provide services to residents that includes care similar to the care provided in a typical assisted living community (which are licensed and regulated). This may include coordinating the provision of such home health care services through truly independent third-party agencies or, in some instances, though affiliates of the facility operator or owner. That said, what may feel to some ILF operators as a useful and typical optional service made available to ILF residents comes with regulatory concerns that must be monitored.

Operators and facility owners who currently offer home health services (or who plan to do so) within ILFs, whether through affiliates or third parties, should recognize that this is an area where there is a strong potential for regulatory developments, particularly if viewed by regulators and the public as a loophole to avoid regulatory oversight.

Additionally, operators who provide (or allow third-party home health agencies to provide) such services should recognize that availability of home health services within an ILF may already escalate the level of licensing necessary (e.g., require licensing as an assisted living facility or the applicable state’s equivalent) in some states where regulators look to the levels of care being provided within the facility – without regard to whether such care is being provided by the independent living facility owner or operator itself or by a third party – to determine the applicable licensing requirements.

In states where home health service agencies can operate within an ILF without additional regulatory approval for the ILF, operators should nonetheless take care to make sure that the providers of such services are separate from the facility itself to guard against operation of a de facto unlicensed assisted living community. For example, operators should avoid any co-mingling of billing for rental fees and home health services, and should avoid arrangements that provide the operator a commission or any compensation from the home health service provider based upon charges to community residents or similar factors. Home health agencies that are leased or otherwise provided space within an ILF for marketing or administrative purposes should be subject to written, arms-length agreements that provide for fair market rental for the space (among other things).

The considerations described in this post are not a comprehensive overview of all regulatory concerns related to this issue and, of course, do not constitute legal advice. Substantial differences in legal requirements and regulations exist from state to state, and changes in laws and regulations are likely to occur in this area. Accordingly, operators are advised to become familiar with home health and assisted-living laws and regulations applicable to their communities and to closely monitor regulatory and legislative developments in this area.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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