A reader wrote to NC Health News after noticing the ongoing moratorium on new beds in Alzheimer's special care units in the 2019 legislative budgets. What’s the rationale behind the moratorium, and what does it mean?

By Emily Davis

North Carolina is greying, and with it, more people are predicted to develop Alzheimer’s disease and other forms of dementia. According to the Alzheimer’s Association, approximately 170,000 people lived with Alzheimer’s disease in North Carolina in 2018. This statistic is projected to increase by 23.5 percent in 2025, to a total of 210,000 diagnoses.

Despite this expected growth, the proposed state budget has extended a multi-year moratorium on the creation of special care units in nursing and adult care homes, which care for people with Alzheimer’s disease and other forms of dementia.

The little moratorium that could

Special care units, or SCUs, exist as units within adult care homes, nursing homes and combination facilities. According to the N.C. Department of Health and Human Services (DHHS), they provide dementia care that promotes a consistent environment, individualized care plans, mobility and minimal use of physical restraints or psychotropic medications.

Skilled Nursing Facilities Versus Adult Care Homes Adult care homes are facilities licensed for seven or more beds and provide 24-hour care. They are meant to assist residents with “activities of daily living” (ADLs), such as medication management. There are 595 licensed adult care homes in N.C. Skilled nursing facilities (SNFs), also referred to as “nursing homes,” have residents living there who are usually sicker and need to require some nursing “skill” in order to justify the higher level of care and the increased cost associated with that. Combination homes operate both adult care and skilled nursing beds. There are 438 SNF and combination homes licensed in N.C., and 176 are combination homes. Requirements: N.C. licensure rules for SCUs in adult, nursing and combination homes require an admitted person to have a diagnosis of Alzheimer’s or one of six related dementia disorders and an assessment by a nurse to determine if the facility can meet the resident’s needs.

The suspension on SCU licensure began in 2013. The moratorium was scheduled to run until 2016, but further extensions were made in 2014, 2015 and 2017 which continued the ban until this year. This year’s budget kept with tradition and re-extended the moratorium until 2021.

SCU’s are still being built, though. During the moratorium, DHHS has developed a process for granting exceptions and issuing these licenses to facilities with the approval of the DHHS secretary, given the increased access to beds is necessary in an area.

When you have a hammer, everything looks like a nail

“In the past, folks could add special care unit beds at will,” said Jeff Horton, executive director of the North Carolina Association of Long Term Care Facilities.

Sen. Ralph Hise (R- Spruce Pine) said the original 2013 moratorium came at a time when lawmakers were trying to get a handle on the growth of special care units in the state, and on long term care overall.

Policymakers in 2013 focused on avoiding any unwanted “woodwork” effect, in which people with disabilities living at home would, upon qualifying for Medicaid assistance, come out of the woodwork seeking this paid care.

“Because special care units are reimbursed at a higher rate than [what] assisted living is, we needed a hold on that, to get a sense of where that cost is,” Hise said.

The Medicaid rate for people in adult care homes is $1,182/ month, but for Medicaid-eligible people in a special care unit, the monthly rate is 22 percent higher, at $1,515.

“Anytime you don’t extend the moratorium, there will be a cost in the state budget that’s coming forward,” Hise said. “It’s been the easier path to extend that moratorium because of the cost of Medicaid and other issues in the state.”

A not-so-final report

As a part of the SCU moratorium, the DHHS was ordered to submit a report this year. With the new budget, another one is due in 2021.

The report was required to include the number of SCU units in the state, their capacity, anticipated growth of patient population, and the number and acceptance of applications received for new units under the moratorium.

In order to figure out how many SCU beds the state needs for those in need of their services, DHHS regulators calculated the current average occupancy of SCU beds. The calculations were based on self-reported data and reflected a one-day census “snapshot” from 2017.

Despite the moratorium limitations, the state is likely experiencing no shortage of beds. DHHS found the average occupancy of adult care beds in SCUs was about 79 percent, and the average occupancy in skilled nursing and combination SCU beds was 74 percent. The DHHS report did, however, acknowledge that “contextual differences such as geographical distances, urban versus rural, need, and payor source can play a role in whether need is being met throughout the State.”

“We are at a good place nationally on the percentage of our population in those [special care units] compared to other states,” Hise said.

Calculating anticipated growth in people who will need SCU services was a trickier task, as it involved predicting public health trends and choices, but the DHHS report’s projected increase to 23.5 percent by 2025 could mean an increased demand of as many as 2,000 new SCU beds, if the trends of capacity and demand remain consistent.







SCUMoratorium 2019DHHSReport (PDF)

SCUMoratorium 2019DHHSReport (Text)

