Level of Care Assessments for U.S. SNFs and ALFs: Why One Workflow Does Not Work Everywhere

For skilled nursing facilities and assisted living providers, a Medicaid Level of Care assessment can determine whether an admission, continued stay, or HCBS service moves forward on time.

The challenge is that “Level of Care assessment” is not one national process. States set their own Medicaid eligibility criteria, assessment tools, documentation requirements, reviewers, submission routes, and operational timelines. A packet that works in one state may be incomplete or misaligned in another.

For admissions directors, business office managers, clinical leaders, and multi-state operators, this creates a direct financial risk. A resident may clearly need the care requested, but the facility can still lose time, admissions capacity, or reimbursement when state-specific requirements are missed.

Important: This guide addresses Medicaid Level of Care assessment and authorization workflows for U.S. skilled nursing facilities and assisted living providers. Requirements vary by state, payer, program, setting, resident category, and service line. Confirm final requirements with the relevant state Medicaid agency, MCO, assessment vendor, provider manual, and legal or compliance advisor.

What a Medicaid Level of Care assessment does

A Medicaid Level of Care assessment determines whether a person meets the clinical, functional, and program-specific criteria for a Medicaid-covered setting or service.

For SNFs, the assessment may support a determination that the resident meets the state’s nursing-facility level-of-care standard. For ALFs and HCBS providers, it may support eligibility for waiver services, managed long-term services and supports, personal care, assisted living services, or another state-defined Medicaid benefit.

The federal government does not impose one universal LOC assessment form or clinical evidence standard.

MACPAC identified at least 124 functional assessment tools in use across the 50 states and the District of Columbia, with states using an average of three tools for different long-term services and supports populations and purposes. Read MACPAC’s analysis of Medicaid functional assessment tools.

That is why a single national Level of Care packet is rarely reliable for facilities operating in more than one state.

Why LOC requirements vary by state

States have substantial responsibility for defining and administering Medicaid long-term services and supports.

Medicaid.gov explains that states establish their own nursing-facility level-of-care criteria and select the tools used to assess whether people meet those criteria. The federal framework sets Medicaid coverage and facility requirements, but it does not prescribe a single national LOC assessment process. See Medicaid.gov’s guidance on institutional long-term care and PASRR.

State-specific variation may include:

• The assessment tool or scoring methodology
• Functional, clinical, cognitive, behavioral, and psychosocial evidence requirements
• Whether the assessment is administered by the state, MCO, local agency, or contracted vendor
• Required physician, hospital, nursing, therapy, or discharge-planning records
• Submission portal, file format, and records-retention requirements
• Standard and expedited review pathways
• Continued-stay, redetermination, and reassessment timelines
• The connection between LOC, PASRR, Medicaid eligibility, and prior authorization
• State provider-manual updates, assessment-vendor changes, and MCO policy changes

The operational point is simple:

A resident’s clinical needs may be similar across states. The Medicaid approval pathway is not.

What the variance looks like

States may use state-developed tools, vendor-administered assessments, interRAI-based instruments, algorithmic eligibility tools, or program-specific functional reviews.

The following examples illustrate how different the operating models can be. They are not a complete state directory and should be confirmed through current official state guidance.

The name of the tool is not the central risk. The operational risk comes from assuming the process is static.

A state may change its assessment vendor, portal, form, evidence requirements, internal review workflow, service definitions, or MCO delegation model. When that happens, a previously effective packet can become outdated quickly.

What an incomplete LOC packet costs

A delayed Level of Care decision is not merely an administrative problem.

When required documentation is missing, unclear, outdated, or submitted through the wrong process, the facility may face:

• Delayed admissions
• Delayed Medicaid authorization
• Delayed billing
• Noncovered days
• Extended hospital discharge delays
• Census disruption
• Higher Medicaid AR
• Increased staff time for resubmissions and payer follow-up
• Avoidable family, hospital, and referral-source frustration

You can estimate the financial exposure using this formula:

Revenue at Risk = Daily Reimbursement Rate × Days Delayed × Concurrent Pending

Example

Assume:

• Medicaid reimbursement rate: $250 per day
• Delay caused by resubmission: 7 days
• Pending admissions affected: 3

$250 × 7 × 3 = $5,250

In this example, a seven-day LOC delay across three pending admissions puts $5,250 in reimbursement at risk, before accounting for staffing costs, hospital coordination, missed census opportunity, or subsequent accounts-receivable follow-up.

Use your own actual reimbursement rates, typical delay periods, and pending-admission volume to calculate the facility’s risk.

The 2026 prior-authorization timeline

LOC assessment requirements vary by state. However, certain payer prior-authorization decisions are now subject to federal response timeframes.

Under CMS’s Interoperability and Prior Authorization Final Rule, CMS-0057-F, impacted payers generally must send standard prior-authorization decisions within seven calendar days and expedited decisions within 72 hours. The operational provisions generally became effective January 1, 2026.

The rule applies to state Medicaid and CHIP fee-for-service programs, Medicaid and CHIP managed-care plans, Medicare Advantage organizations, and certain Qualified Health Plan issuers. It does not apply to prior authorization for drugs. Read CMS’s CMS-0057-F fact sheet.

CMS also requires impacted payers to provide a specific reason when they deny a prior-authorization request. The agency’s Prior Authorization API FAQ describes the required response information and related implementation requirements.

This rule does not mean every state LOC process follows an identical seven-day decision cycle. Some LOC, eligibility, waiver, assessment-vendor, or utilization-management processes operate under separate state or program rules. Permitted extensions and additional-information requests may also affect the timeline.

The operational implication remains important:

When an LOC-related request is subject to a federal or payer decision clock, incomplete documentation leaves less time to correct gaps before an admission or service start is delayed.

What to track for every request

For each LOC or payer authorization request, track:

• Submission date and time
• State program, payer, and reviewing entity
• Standard or expedited request status
• Required assessment and supporting documents
• Receipt confirmation
• Requests for additional information
• Reviewer contact and escalation path
• Decision due date
• Approval, denial, or pending date
• Denial reason, if applicable
• Resubmission, reconsideration, or appeal deadline
• Impact on admission date, service start, billing, and expected reimbursement

PASRR: a separate admission requirement

Preadmission Screening and Resident Review, commonly called PASRR, is related to SNF admissions but is not the same as a state Level of Care assessment.

PASRR is a federal requirement for applicants to Medicaid-certified nursing facilities who may have a serious mental illness, intellectual disability, or related condition. Its purpose is to determine whether the person requires nursing-facility services and whether specialized services are needed.

The federal PASRR framework is set out in 42 CFR Part 483, Subpart C.

The process generally includes:

• Level I screening to identify whether an applicant may have a serious mental illness, intellectual disability, or related condition
• Level II evaluation when the Level I screen indicates that a more detailed review is needed, subject to applicable exceptions and state procedures

PASRR follows a consistent federal framework, but states administer it through their own forms, contractors, referral routes, timelines, exemptions, documentation standards, and submission systems.

That means PASRR should be handled as a distinct admission gate in every state—while still following the state-specific process required to complete it correctly.

PASRR controls to build

For every relevant SNF admission, identify:

• Whether a Level I screen is required
• Who is responsible for completion and review
• Whether the result triggers a Level II referral
• Which state entity or contractor performs the Level II evaluation
• Whether an applicable exception may apply
• What documents must be retained
• How the outcome affects admission timing, care planning, and specialized-service obligations

A completed LOC assessment does not replace PASRR. A completed PASRR does not necessarily replace state LOC, Medicaid eligibility, or payer authorization requirements.

Build a state-aware LOC process

The answer is not one oversized checklist that attempts to serve every state.

A more reliable approach combines a common operating framework with state-specific documentation and submission modules.

Maintain a state LOC matrix

For each state where your organization admits Medicaid residents, maintain an up-to-date operating matrix.

This matrix creates a shared reference point for admissions, clinical staff, business-office teams, billing specialists, and finance leaders.

Use state-specific packet templates

Build a packet template for each state and program your facility serves.

Depending on the state and service, the packet may include:

• Current LOC or program referral form
• Face sheet and payer information
• Physician orders, medical history, or discharge summary
• Nursing assessment
• Medication profile
• Functional and ADL documentation
• Cognitive, behavioral, and psychosocial records
• Therapy assessments, where relevant
• Hospital documentation, where applicable
• PASRR screen, referral, or determination
• Current eligibility and authorization information
• State-specific evidence supporting the requested level of care

The goal is not to create more paperwork. It is to ensure the reviewer receives the information needed to make the correct decision without preventable requests for additional documentation.

Separate clinical and submission readiness

A resident may be clinically appropriate for your facility but not yet ready for a state or payer decision.

Use two distinct admission statuses:

This distinction reduces tension between admissions, nursing, billing, and finance teams. It also makes it easier to identify why an admission is delayed and who owns the next action.

Monitor change continuously

State Medicaid processes can change with little operational warning.

Assign a named owner to monitor:

• State Medicaid provider bulletins
• MCO provider notices
• Assessment-vendor updates
• State portal or form changes
• PASRR contractor changes
• Waiver and managed-LTSS notices
• Provider-manual updates
• Payer denial and request-for-information patterns

The owner’s job is not to make legal interpretations. It is to obtain official guidance, update the internal process, and ensure staff know what changed before it affects an admission.

Three preventable LOC delays

The following examples are illustrative and are not client case studies or legal advice.

1. One packet was used for two states

A provider operated in two states and used one standard LOC packet because the residents had similar clinical needs.

One state required more detailed functional, cognitive, and behavioral documentation. The broad clinical picture was sound, but the packet did not present the evidence in the required format or level of detail.

The reviewer requested additional information, delaying the decision.

Prevention: Use state-specific templates, evidence checklists, and reviewer-feedback logs.

2. PASRR was buried in the packet

An admissions team treated PASRR as another document within the broader Medicaid packet. During a staff handoff, the required screening or referral was not completed on time.

The clinical documentation and LOC materials were ready, but the admission could not proceed on the expected schedule because PASRR remained unresolved.

Prevention: Track PASRR as a separate admission dependency with its own owner, due date, status, document location, and escalation path.

3. A state process changed without an internal update

A state changed its assessment vendor, portal, form, or submission process. Staff continued using an outdated process until a submission stalled.

The delay was not caused by the resident’s need for care. It resulted from an outdated operational workflow.

Prevention: Assign responsibility for monitoring state and vendor updates and promptly update templates, contact lists, portal instructions, and staff training.

How LTCPro supports LOC workflows

LTCPro helps U.S. SNFs and assisted living facilities strengthen the operational controls around Medicaid admissions, Level of Care documentation, prior authorization, and claims readiness.

Depending on your state, payer mix, systems, and available documentation, LTCPro can help with:

• Organizing documentation needed for LOC and payer review
• Creating state-specific packet checklists and workflow controls
• Tracking authorization submissions, approval periods, follow-up actions, and renewal dates
• Monitoring missing documentation, pending decisions, and payer requests
• Coordinating admissions, clinical, business-office, and billing worklists
• Identifying recurring denial, delay, and request-for-information patterns
• Supporting claims readiness once authorization is approved
• Improving visibility into pending admissions, noncovered-day exposure, and Medicaid AR risk
• Establishing escalation workflows for overdue payer responses or incomplete submissions
• Improving visibility into pending admissions, noncovered-day exposure, and Medicaid AR risk, since unresolved noncovered days and pending admissions also affect what eventually shows up on a facility’s Medicaid cost report.

LTCPro does not determine a resident’s clinical Level of Care, replace state assessors or independent evaluators, complete mandated third-party assessments, make legal determinations, or guarantee authorization approval.

Final clinical, program, and payment decisions remain with the appropriate state Medicaid agency, MCO, assessment contractor, clinicians, and other authorized parties.

LTCPro’s role is to help facilities organize the documentation, tracking, communication, and billing controls that reduce avoidable authorization delays and reimbursement risk.

FAQ

Is a Medicaid Level of Care assessment the same in every state?

No. States select their own nursing-facility level-of-care criteria, assessment tools, reviewers, submission processes, and evidence requirements. MACPAC identified at least 124 functional assessment tools in use across the states and the District of Columbia. Read MACPAC’s assessment-tool analysis.

What is a Level of Care assessment for Medicaid?

A Medicaid Level of Care assessment evaluates whether a person meets the clinical, functional, and program-specific criteria for a Medicaid-covered setting or service. It may support nursing-facility eligibility, assisted living services, HCBS waiver participation, managed long-term services and supports, or another state-defined benefit.

Who performs a Level of Care assessment?

It depends on the state and program. The assessment may be completed or reviewed by a state Medicaid agency, MCO, local agency, hospital, contracted assessment vendor, case manager, or another authorized entity. Facilities commonly help gather and submit the required records.

How long do Medicaid payers have to decide a prior-authorization request?

For impacted payers under CMS-0057-F, standard prior-authorization decisions are generally due within seven calendar days and expedited decisions within 72 hours. Whether a particular LOC process qualifies as prior authorization, and whether an extension is permitted, depends on the payer and program. Read CMS’s CMS-0057-F fact sheet.

Is PASRR the same as a Level of Care assessment?

No. PASRR is a federally required screening and review process for certain applicants to Medicaid-certified nursing facilities who may have a serious mental illness, intellectual disability, or related condition. A state LOC determination, Medicaid eligibility verification, and payer authorization may still be required in addition to PASRR. See 42 CFR Part 483, Subpart C.

What happens if a Level of Care packet is incomplete?

The state, MCO, or assessment entity may request additional records, return the packet, delay the decision, deny the request, or require resubmission. This can delay admission, authorization, claim submission, and payment.

What should a facility track for LOC reassessments and reauthorizations?

Track the relevant program and payer, assessment type, authorization period, expiration date, reassessment due date, required evidence, submission deadline, reviewer contact, decision date, and any resubmission or appeal deadline. Use a worklist that alerts the responsible team before a required action is overdue.

Key takeaways

• Medicaid Level of Care assessments vary substantially by state. States use different tools, criteria, reviewing entities, documentation requirements, submission methods, and deadlines.
• MACPAC identified at least 124 functional assessment tools in use across the states and the District of Columbia, making one generic LOC packet unreliable for multi-state providers. Read MACPAC’s analysis.
• Under CMS-0057-F, certain Medicaid and managed-care prior-authorization decisions are generally due within seven calendar days for standard requests and 72 hours for expedited requests. Read CMS guidance.
• PASRR has a consistent federal framework but state-specific administrative processes. It should be managed as a separate admission requirement, not assumed to be part of the LOC process.
• Strong LOC operations use state-specific packet templates, a shared tracking system, named ownership, submission timestamps, payer follow-up checkpoints, and routine change monitoring.
• LTCPro can help organize the documentation, authorization tracking, payer follow-up, and claims-readiness workflow that supports timely Medicaid admissions and collectible reimbursement.