State Funding for Assisted Living Facilities to Provide COVID-19 Economic Relief

The costs to operate assisted living facilities (“ALFs”) and ensure the health and well-being of ALF residents throughout the pandemic have substantially increased.  Certain states have employed relief funding in the form of grants, loans, special Medicaid payments, and funds that must be used for the purchase of COVID-19 supplies and equipment for the ALF’s “high risk population.” These programs may provide relief to ALFs even if they are not enrolled in any Medicaid program.  Of importance is that several programs require applications by the ALFs and relief funds may become depleted by the first to apply.

Although not exhaustive, the following exemplifies actions states have taken to provide financial assistance to ALFs as a result of the COVID-19 pandemic.


Governor Steve Bullock announced that $123 million in grant funds (funded through the CARES Act) would be made available to various families, small businesses, non-profits, health services centers, and individuals heavily impacted by COVID-19.  As of May 7, 2020, individuals and businesses are able to apply for these grants through nine new programs created in response to the COVID-19 emergency.  The grant programs that are most relevant to ALFs include the following:

Stay Connected Grants – The Stay Connected Grants range from $500-$2,000 per applicant and are available to reduce social isolation among Montana’s seniors.  Eligible applicants include area agencies on aging, assisted living facilities, nursing homes, and tribal elder services.  The grant funds can be used to fund technologies and other efforts to encourage physically distant forms of social interaction for elderly Montanans during the COVID-19 public health emergency.  The current funding available is $400,000.

Montana Business Stabilization Grants – The Montana Business Stabilization Grant program will provide working capital for Montana-owned small businesses with 50 or fewer employees that have sustained a loss of revenue due to COVID 19.  The current funding available is $50 million, and the maximum award amount per business is $10,000.


Minnesota lawmakers passed an emergency law authorizing $200 million in grant funding to support eligible health care organizations in covering their costs related to planning for, preparing for, or responding to the COVID-19 outbreak. ALFs are specifically included as eligible organizations.  The grant funding is split into two streams: (1) a $50 million COVID-19 Response Grant for Short Term Emergency Funding, and (2) a $150 million COVID-19 Health Care Response Grant.

The $50 million COVID-19 Response Grant for Short Term Emergency Funding was awarded on April 8, 2020 on an emergency basis to provide cash flow relief to health care organizations, including ALFs, to cover their highest priority needs.  This grant opportunity is currently closed.

Although the initial grant funds are no longer available, the Minnesota Department of Health is now accepting applications for funding from its $150 million COVID-19 Health Care Response Grant, which is intended to cover provider (such as ALF) costs related to planning for, preparing for, or responding to the COVID-19 outbreak.  The Minnesota Department of Health will award the funds through a Request for Proposal (“RFP”) process, and applicants must submit RFP responses via an online application.  There is no deadline for submitting an application for the grant funds, but the Minnesota Department of Health recommends applying as soon as possible.

New Jersey

Governor Phil Murphy announced a source of emergency funds to assist New Jersey’s health care organizations, including ALFs, with expenses related to the COVID-19 pandemic.  Specifically, the New Jersey Health Care Facilities Financing Authority approved a $6 million COVID-19 Aid Program, which provides loans to health care organizations to offset some of the unforeseen expenses incurred by the pandemic.

The no-interest loans have no application, no fees (both initial and annual), and are secured by federal and state grants and other financial aid received by the recipient health care organizations as a response to COVID-19, as well as grants from other private and public sources related to COVID-19 resilience and anything acquired with the proceeds thereof.  The loan will specify how the requested funds will be used – for example, the construction or renovation of any building, acquisition of any equipment, including ventilators, acquisition of any supplies, medications, or personal protective equipment, hiring of any staff, consultants, or temporary workers, etc.  ALFs can apply for the COVID-19 Aid using the Emergency Loan Application form.  Moreover, principal payments would be required within 30 days of receipt of any COVID-19 Aid by the recipient ALF in the amount of such COVID-19 Aid received, if any, until the loan is fully repaid.

North Carolina


North Carolina Medicaid issued Special Bulletin COVID-19 #82 addressing hardship advances and retroactive targeted rate increases for adult care homes (“ACHs”) (as well as skilled nursing facilities).  North Carolina Medicaid is directing increased financial assistance to North Carolina ACHs to support the increased cost of care for COVID-19 positive (“COVID+”) residents in congregate care settings.  This targeted assistance is applied retroactively to April 1, 2020 and addresses (1) the cost associated with heightened safety and health practices required to limit the spread of COVID-19 in a congregate care facility where at least two individuals have been confirmed as COVID+ (a “COVID Outbreak”), and (2) facilitating the safe and timely discharge of COVID+ patients from acute health care settings to residential settings for convalescence and/or rehabilitation (“COVID Response”).

Expedited Hardship Advances

The Expedited Hardship Advance process enables an eligible provider to receive an interim payment of up to 125% of two months’ reimbursement based on the ACH’s prior claims history.  In order to be eligible, the ACH  must (1) be an enrolled provider, (2) request the Expedited Hardship Advance, and (3) either be confirmed by the North Carolina Department of Health and Human Services, Division of Public Health as meeting the definition of COVID Outbreak or confirmed by North Carolina Medicaid as volunteering to be a COVID Response site.  Once the Expedited Hardship Advance is released to the ACH, it becomes a receivable owed by the ACH to North Carolina Medicaid; however, no interest or penalty will be assessed on this special receivable.

ACH COVID Outbreak Site Personal Care Services (“PCS”) Reimbursement Increase

An ACH COVID Outbreak site may also receive increased service hours and an increased unit rate for individual PCS for every resident (not just the COVID+ residents) in the ACH.

An ACH COVID Outbreak site will be assigned NPI-specific rates, which permits the increased reimbursement rates for services rendered.  The current 15-minute unit rate will be increased to $7.50 per unit for all Medicaid PCS beneficiaries in an ACH COVID Outbreak site, and the ACH should still bill its usual and customary charges.  It is important to note that an ACH COVID Outbreak site may bill up to 100 additional service hours per month for each beneficiary with current prior approval up to 80 hours per month, but only 40 additional service hours per month for each beneficiary with current prior approval greater than 80 hours per month.  ACH PCS providers will receive a rate letter confirming their provider-specific increased rate, which will apply retroactively to claims submitted with dates of service on April 1, 2020 or later.

Moreover, on May 11, 2020, North Carolina Medicaid announced in Special Bulletin COVID-19 #88 that to strengthen infection prevention and management activities, PCS provider base rates will be increased 10% in addition to any recently implemented rate increases for all claims submitted with a date of service on or after April 1, 2020 (which base rate increase will also be applied to recent NPI-specific targeted base rate increases granted to ACH COVID Outbreak sites).

Legislative Relief Package

Governor Roy Cooper signed into law two relief bills, House Bill 1043 (also referred to as the “2020 COVID-19 Recovery Act”) and Senate Bill 1043, in response to the COVID-19 pandemic.  In particular, the 2020 COVID-19 Recovery Act directs that the Office of State Budget and Management allocate $50 million (which funds were received pursuant to the CARES Act) to health care entities (e.g., adult care homes) for (i) the purchase of supplies and equipment necessary for life safety, health, and sanitation, and (ii) for the purchase of protective equipment that meets the federal standards and guidelines from the Centers for Disease Control and Prevention.

The North Carolina Assisted Living Association (“NCALA”) alerted its members that “the [2020 COVID-19 Recovery Act] did not specify the process, procedure, or method to implement the use, purchase, and distribution of these funds and supplies to adult and family care homes.”  Therefore, the details about accessing such funds will need to be developed by the relevant stakeholders.


The Washington Department of Social and Health Services (“DSHS”), on behalf of the Aging and Long-Term Support Administrative Home and Community Services Division, notified Medicaid contracted providers (including ALFs) of temporary Medicaid rate increases.  The letter, in part, explains the following updates:

Rate Increases

DSHS will be issuing a temporary rate increase to ALFs serving residents whose care is paid by Medicaid.  For ALFs, there will be an additional rate of $9.31/day (including Specialized Dementia Care).  The temporary rate increase will be retrospective to March 1, 2020 and continue to be available through June 30, 2020.

Retainer Payments

DSHS will also temporarily pay retainer payments to ALFs for 70% of the Medicaid resident’s current daily rate for a maximum of 30 consecutive days in the following specific pandemic-related circumstances (so long as certain criteria are met): (1) the ALF was prevented from providing services to a Medicaid resident due to the provider temporarily closing in response to local, state, federal, or medical requirements or orders, or (2) the ALF was prevented from providing services to a Medicaid resident due to the resident temporarily leaving the facility because of a positive or suspected COVID-19 diagnosis.


ALFs should continue to monitor state initiatives pertaining to the COVID-19 pandemic as states introduce programs that provide critical funding.  It is important to recognize that certain programs require action and, even in some cases, applications by the ALF to access such funding.

If you have specific questions or require further information, please contact Hedy S. Rubinger or Gregory M. Gaylis. Please refer to AGG’s Coronavirus (COVID-19) Resource Center for additional legal alerts.

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