Report: Assisted Living Residents on Medicaid Were Evicted

[This article was originally published April 17, 2009. The links have been deleted or updated.]

A national assisted living company broke its promises to elderly New Jersey residents by throwing them out after allowing them to believe they could convert to Medicaid when their life savings were depleted, a report by the state's Public Advocate has determined. The report concludes that regulations in New Jersey and around the country are failing to protect elderly residents of such facilities.

The report caps an 18-month investigation into the practices of the Wisconsin-based company Assisted Living Concepts, Inc. The company has more than 200 assisted-living facilities nationwide, including eight in New Jersey, and several years ago launched an effort to purge its facilities of Medicaid residents. The Public Advocate's investigation was launched after numerous complaints that residents of Assisted Living Concepts facilities in New Jersey were being kicked out of their homes when they had drained their private resources and had to go on Medicaid, despite earlier pledges from the company that Medicaid recipients would be allowed to stay.

"Our investigation clearly demonstrates that Assisted Living Concepts broke its trust with dozens of elderly residents who believed they would be permitted to age in place once their private funds were exhausted," said Public Advocate Ronald K. Chen. "In reality, from mid-2006 on, the company began to execute a business plan that attempted to ruthlessly remove anyone once they reached the point where they could no longer pay with private funds and needed to rely on Medicaid."

Chen said the evictions were "part of a corporate strategy designed to extract the company from doing business with Medicaid and to drive out low- and moderate-income residents."

The report notes that the company broke no actual laws, although it contends that Assisted Living Concepts violated its licensing agreement with the state about how residents going onto Medicaid would be treated.

Like most states, New Jersey's system of regulating assisted-living facilities provides little meaningful protection to residents facing involuntary discharge. Federal and state laws give powerful protections to nursing home residents, but not to residents of assisted living facilities, even though Medicaid may pay for care there, depending on the state.

But the publicity surrounding Assisted Living Concepts' evictions may help to change this. Even the company's founder, Dr. Keren Brown Wilson, who has since left the company, is critical of its current policies. "I don't understand why you wouldn't want to find a way to avoid all this legal activity and bad publicity," the report quotes Wilson as saying. "As a business person, I just can't figure it out."

The report makes several recommendations, including that the state adopt legislation that would ban assisted-living facilities from discharging residents who convert to Medicaid.

For more information on how to fight an assisted living discharge, read this article.

To learn more about assisted living facilities, including what they cost, check out this story.