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Assisted Living: Understanding Assisted Living Licensure and Certification and its Intersection with Medicaid

The type of housing arrangement determines whether a provider needs licensure or certification in Wisconsin. Providers must understand the state's licensure and certification requirements to know if they need to apply for licensure or certification.

Wisconsin has different provider types for people who live in a setting and receive services. Determining whether licensure or certification is required is an important first step, as it also affects what Medicaid funding is allowed and which Medicaid rules apply.

Living settings

There are different provider types for individuals who reside in a setting and receive supports and services above the level of room and board. These supports and services are provided by staff employed by the entity that owns or controls the residence.

Whether a provider needs licensure or certification is determined by the statutes and administrative codes that govern adult residential care in Wisconsin. The Wisconsin Department of Health Services (DHS) oversees community-based residential facilities (CBRFs), residential care apartment complexes (RCACs), 1-2 Bed Adult Family Homes (AFHs), and 3-4 Bed AFHs. These housing arrangements must be licensed, certified, or registered depending on the type and follow the applicable rules and regulations.

Characteristics of a licensed/certified setting:

  • Individuals receive care, treatment, or services from the owner or operator, or from an agent of the owner or operator.
  • Someone coordinates or provides care for multiple residents in the same building.

Determining if you want or need to be licensed, certified, or registered is the first step when planning to open a new business. That determination impacts what type of Medicaid funding may be allowable for your housing development.

Community-based residential facilities (CBRF) are places where five or more unrelated people live together in a community setting. Services offered include room and board, supervision, and support services. It can include up to three hours of nursing care per week.

All housing arrangements meeting the CBRF definition must be licensed.

A residential care apartment complex (RCAC) is a place where five or more adults reside that consists of independent apartments with specific criteria:

  • Individual lockable entrance and exit
  • Kitchen, including a stove
  • Individual bathroom
  • Sleeping area
  • Living area

These facilities also provide tenants with no more than 28 hours per week of supportive, personal, and nursing services.

Registered RCACs may serve only private pay tenants. Certified RCACs may serve private pay tenants and tenants who receive public funding, including Medicaid waiver reimbursement.

All housing arrangements meeting the RCAC definition must be registered or certified.

A 1-2 bed adult family home (AFH) is a place where one or two adults who aren't related to the operator reside. They receive care, treatment, or services that are above the level of room and board.

Each 1-2 bed AFH must be certified by one managed care organization (MCO), county human service agency, or the IRIS (Include, Respect, I Self-Direct) program before serving residents in the AFH. An AFH can only be certified by one agency. Once the AFH has been certified, they may be eligible to admit residents from other MCOs, IRIS consultant agencies (ICAs), or county human service agencies.

All housing arrangements meeting the 1-2 Bed AFH definition must be certified.

A 3-4 bed adult family home (AFH) is a place where three or four adults who aren't related to the operator reside. They receive care, treatment, or services that are above the level of room and board. It may include up to seven hours per week of nursing care per resident.

All housing arrangements meeting the 3-4 bed AFH definition must be licensed.

DHS does not require housing arrangements to be licensed, certified, or registered when there are independent apartments, units, or houses wherein:

  • The individual has their own lease with the residential provider (landlord) and no services beyond typical shared amenities are provided by the residential provider.
  • The individual owns their own unit in a shared community.
  • Services above room and board - such as dressing, assisting with medication, and bathing are independently arranged by the resident and resident has full choice of the service provider.
  • The individual is not sharing any services with another individual.

Overview of IRIS and Family Care

When opening a housing development, consider what types of people may live there and what type of long-term care program they participate in. There may be restrictions on where an individual can live depending on which program they participate in. DHS oversees Wisconsin's two main adult long-term care programs: IRIS and Family Care. IRIS and Family Care do not cover room and board. Room and board are the responsibility of the program members who must pay these costs out of pocket.

  • IRIS: The member or their legal representative is required to coordinate services, manage budgets, act as an employer (recruit, hire, train, schedule and supervise staff), and complete paperwork. There is not a care team in IRIS, just a consultant. IRIS consultants do not directly coordinate services.
    • In IRIS, the services provided to Medicaid members are based on the long-term needs and goals of the individual self-directing their services. There is no guarantee or requirement that an individual will choose a specific living situation or care provider.
    • IRIS budgets cannot be pooled: Each participant must have their own budget based on their individual needs and must set up services individually based on their budget.
    • IRIS allowable settings include the member's own home, a licensed or certified AFH, or a certified RCAC.
    • CBRFs and registered RCACs are not an allowable setting for IRIS participants.
  • Family Care: The member works with a managed care organization (MCO) to define their needs and to find care settings within the MCO's provider network. Each member is assigned a care team, which includes a care manager and a nurse. The care team coordinates all services. Members can choose to self-direct services.
    • Providers would need to contract with MCOs to serve as both a residential and/or care provider for Family Care. MCOs decide on care providers based on a member's desired outcomes and care plan, the MCO's provider network, and other factors. There is no guarantee an MCO will choose to contract with a provider to serve its members.
    • Family Care members can live in their own home, a licensed CBRF, a licensed or certified AFH, or certified RCAC.
    • Registered RCACs are not an allowable setting for Family Care members.

HCBS requirements

The home- and community-based services (HCBS) settings rule establishes requirements for residential and nonresidential service settings in Medicaid waiver programs. The purpose of the settings rule is to ensure that people receiving services through HCBS waiver programs have access to the benefits of community living and are able to receive services in the most integrated settings.

The settings rule applies to all provider-owned or provider-controlled settings. A provider must demonstrate that it is in compliance with all applicable provisions of the HCBS settings rule before you can be licensed or certified to serve Family Care members or IRIS participants.

All providers interested in becoming HCBS compliant, in order to be eligible to be paid with Medicaid dollars, need to complete and submit the HCBS Compliance Review Request, F-20138 (Word). The license or certification does not guarantee HCBS compliance or a contract with a MCO or IRIS entity.

Licensure/certification requirements crosswalk

The Licensure/Certification Crosswalk for Assisted Living Providers, P-03766 (PDF) outlines the different provider types that are applicable when an individual resides in a setting and receives supports and services above the level of room and board from staff employed by the entity that owns or controls the residence. It also contains information regarding the HCBS settings rule.

Steps in the process

  1. Review applicable laws.
  2. If you need assistance determining if licensure or certification is needed, reach out to your Bureau of Assisted Living regional office.
  3. For providers interested in being a licensed CBRF, review the construction project plan review requirements.
    • DQA's Office of Plan Review and Inspection (OPRI) offers providers the opportunity to participate in a series of preliminary project meetings bringing building project stakeholders together to discuss the scope of the project, share schedules, responsibilities and expectations and to establish lines of communication. OPRI staff will answer questions regarding the various codes and regulations and explain what to expect during the inspection process.
  4. Submit a licensure or certification application.
  5. Providers interested in enrolling in Wisconsin Medicaid should review requirements and enroll in ForwardHealth.

Glossary

 
Last revised February 9, 2026