SIC 8052
INTERMEDIATE CARE FACILITIES



This industry includes establishments that provide inpatient nursing and rehabilitative services, but not on a continuous basis. Designated in particular are facilities certified under the Medicaid program to deliver intermediate care to the developmentally disabled.

NAICS Code(s)

623311 (Continuing Care Retirement Communities)

623210 (Residential Mental Retardation Facilities)

623110 (Nursing Care Facilities)

Industry Snapshot

The Code of Federal Regulations (4-1-93 Edition) has defined an intermediate care facility (ICF) as "a proprietary facility or a facility of a private nonprofit corporation or association licensed or regulated by the State…for the accommodation of persons, who, because of incapacitating infirmities, require minimum but continuous care but are not in need of continuous medical or nursing services. The term also includes additional facilities for the nonresident care of elderly individuals and others who are able to live independently but who require care during the day."

ICFs provide inpatient nursing and rehabilitative services, predominantly to individuals with developmental disabilities. Though they operate 24 hours a day, services are not provided on a continuous basis. Personnel in ICFs must include 24-hour staff in addition to a licensed nurse on duty full-time each day. The term "developmental disabilities" generally refers to mental retardation. Therefore, ICFs often are designated as ICF/MRs—Medicaid-funded facilities that provide residential care and services for individuals with developmental disabilities. ICF/MR services were used primarily by the aged (34.9 percent) and the disabled (6.9 percent), and not by low-income children or low-income adults.

Approximately 2.5 percent of the national population can be classified as mentally retarded. Although the majority of individuals with mental retardation or related conditions are able to live with their families or other adults in ordinary homes, other individuals with developmental disabilities are cared for in ICFs. Alternatively, individuals with developmental disabilities who require continuous medical or nursing care can be placed in nursing facilities. Many patients reside in ICF/MRs from youth until old age.

ICFs also can provide care to individuals with cerebral palsy, epilepsy, or other severe impairments of the central nervous system, not attributable to mental illness, that result in physical, mental, and behavioral disabilities comparable to those caused by mental retardation.

The individuals with developmental disabilities in ICFs typically require both health care and special services due to limited capabilities for self-care—housekeeping, language, social, and vocational skills. The health care offered by ICFs must include a consultation by a registered nurse at least once a week on the delivery of health care to individual inpatients and a licensed nurse on full-time duty for each day shift. Other services that ICFs provide include habilitation (training) in daily living, self-help, socialization, prevocational skills (such as focusing on tasks and observing time schedules), and vocational skills. Some ICF programs sponsor sheltered workshops, whereby disabled individuals receive less than minimum wages, calibrated to individual productivity, for economic output; and supported employment, whereby disabled individuals join nondisabled persons in work settings. ICFs sometimes provide recreational activity centers for inpatients and respite care (temporary care of individuals with developmental disabilities who generally reside with and are cared for by their families).

Organization and Structure

Licensed ICFs are categorized into three types by the California Department of Developmental Services (CDDS): larger facilities (more than 16 beds) that provide developmental, training, habilitative, and supportive health services to adults and children who have a primary need for developmental services but intermittent need for skilled nursing services; smaller, habilitative units with 4 to 15 beds that provide the aforementioned services, plus personal care in the least restrictive community setting to the above, who also have an ongoing but predictable need for intermediate care for skilled nursing services; and finally, smaller units that provide the same services outlined above, except that they include nursing supervision and require recurring but intermittent nursing services not available above.

The Medicaid program, which is federally supported but state administered, is the primary source of economic aid for the ICF population, although other funds are available. In general, individuals with developmental disabilities qualify for Medicaid benefits by meeting the disability and financial criteria established for the Supplemental Security Income (SSI) funding. ICFs must meet federal standards intended to ensure that residents live in a safe environment, are supervised by qualified staff, and receive appropriate habilitation and medical treatment. Individuals who meet the disability criteria for Medicaid funding generally must be both mentally impaired (with an IQ of 50 or less) and functionally disabled (incapable of performing the ordinary activities appropriate for persons of their age). Financial eligibility is based upon the economic resources of the developmentally disabled individual and, if the developmentally disabled individual is a child less than 21 years old and living in the family household, on the economic resources of that individual's parents. Once a developmentally disabled child has been institutionalized for a month or more in an ICF or a comparable Medicaid institution, only income actually provided by the parents is considered in determining that child's financial eligibility for Medicaid.

Background and Development

Prior to the development of ICFs, care of individuals with developmental disabilities had been the responsibility of individual states. Most individuals with developmental disabilities who did not live with their families were placed in large state facilities, generally in rural and isolated locations, that emphasized custodial care rather than treatment. By the 1950s, parents and advocates of individuals with developmental disabilities began to push for the reform of such large state institutions and for the development of community-based services, whereby individuals with developmental disabilities could receive special services but continue to live at home. In 1962, a panel appointed by President Kennedy recommended that only developmentally disabled individuals whose specific needs were appropriately met by institutional services should be placed within state facilities. This panel also recommended that federal and state agencies and local communities cooperate in the establishment of community services for individuals with developmental disabilities. In the 1960s and 1970s, with the press reporting on the often harsh conditions to which institutionalized individuals with developmental disabilities were subjected, the movement to reform and provide alternatives to large custodial facilities gained momentum.

Until the 1970s, individual states bore the economic burden of providing for individuals with developmental disabilities. In that decade, however, Congress began enacting legislation to provide federal funds for the treatment of developmentally disabled individuals. In 1971, Congress authorized the use of federal Medicaid funding for the services to be provided by ICFs. The purpose of Congress' substituting federal for state funding was to encourage reform by imposing federal standards on state facilities. Throughout the 1970s, federal expenditures on ICFs rose rapidly, initially due to an increase in the enrollment of individuals with developmental disabilities who qualified for Medicaid benefits. In 1981, the congressional Omnibus Budget Reconciliation Act authorized home-and community-based waivers whereby states could apply Medicaid funding for individuals with developmental disabilities to services provided in noninstitutional settings. Since that time, increasing numbers of individuals who otherwise would have been directed to ICFs are being treated within their homes and communities.

Medicaid spent $8.3 billion or 7.7 percent of its $108.3 billion budget for ICFs for the mentally retarded in 1994, according to the Health Care Financing Review statistical supplement published in October 1996. ICF/MR costs rose $6 per aged person from $13 to $19 during the period 1987 to 1994. In 1994, Medicaid served 159,000 ICF/MR persons, up an average of 4.5 percent per year for each year during the previous decade. In 1995 there were 200,000 ICF/MR recipients for whom $10.4 billion was paid by Medicaid to vendors. This amount represented 9 percent of the total payments to all Medicaid vendors for all Medicaid services. By 1996 the total of Medicaid recipients in ICFs/MR had receded to 100,000.

Current Conditions

The nursing and residential care facilities market, of which ICFs are a part, took in an estimated $116 billion in 2001, up 6.8 percent from $108.6 billion the previous year. Medicaid spent $9.3 billion, or 6.1 percent of its $152.6 billion budget, for ICFs for the mentally retarded in 1999. All 50 states have at least one ICF/MR facility. Of the 40.4 million enrollees in Medicaid in 2003, 4.3 million were aged and 7.7 million were blind or disabled. ICF/MR benefits served approximately 129,000 people with mental retardation and other related conditions in 2003. Medicaid spending on intermediate care facilities has continued to rise over the last several years, as ICF facilities continue to decline.

The trend of mergers in this sector in the late 1990s continued into the new millennium. In 2001, Universal American Financial Corp. and its CHCS Services acquired the assets of Living Strategies Inc., an employer-sponsored elder-care programs provider. Sun Prairie company purchased 12 assisted living centers from Alterra Heathcare Corp. in 2001. Res-Care Inc., offering services to the mentally disabled, was also purchased in 2000 by an investment group for a reported $700 million.

Industry Leaders

National leaders in sales among companies with interests in ICFs were Genesis Health Ventures, Multicare Companies Inc., Carondolet Health Corp., United Health Services Inc., RehabCare Corp., and Turtle Creek Health. Others included Eger Lutheran, Charter Care Corp., Penninsula United Methodist, Waterfront Health Care Center, and Dover Nursing.

Genesis Health Ventures Inc. provides basic and specialty health care services for the elderly. Under the Genesis ElderCare name, the company owns or manages 250 geriatric care facilities, including primary care physician clinics, pharmacies, medical supply distribution centers, rehabilitation clinics, and infusion therapy services. Revenues for fiscal year 2002 were $2.6 billion, up 2.1 percent from 2001.

RehabCare Group Inc., a major provider of contract rehabilitation services, provides services for more than 3,000 hospitals, long-term care units, and outpatient facilities across the United States. RehabCare's subsidiary Health Care Staffing Solutions provides temporary therapist and nurse staffing services to nursing homes and hospitals. RehabCare had revenues of $562.6 million in 2002.

United Health installed a private ATM and Sonet network to increase communications efficiency among its hospitals, corporate headquarters, and 25 physicians throughout its region. United Health evolved rapidly into a comprehensive delivery system by using a variety of methods to bring about real integration between physician and nonphysician leaders.

Workforce

ICF employees include administrators and managers; nursing aides, orderlies, and attendants; licensed practical nurses and registered nurses; food service workers; cleaning supervisors, janitors, maids, and housekeepers; laundry and dry cleaning workers; maintenance personnel; and recreation workers.

In 1992, the average number of employees per establishment was 45 (compared to 13 employees per establishment for service industries as a whole). In proprietary establishments, the average number of employees was 50; in tax-exempt establishments, the average number was 46. In 1995, ICFs accounted for a total of 212,800 employees, of which 191,400 worked in nonsupervisory positions. The states with the greatest concentration of ICF employees were Ohio (23,402 employees, or 9.3 percent of the national total), Illinois (20,656 employees, or 8.2 percent of the national total), and New York (16,789 employees, or 6.6 percent of the national total).

In 1996, ICFs employed 220,700 persons who earned an average of $8.51 an hour and worked an average of 31.8 hours a week. By 1999, ICFs in the United States employed 202,200 people.

Further Reading

Centers for Medicare & Medicaid Services. Intermediate Care Facility for People with Mental Retardation Program, 2003. Available from http://cms.hhs.gov .

Daykin, Tom. "Sun Prairie, Wis., Company Expands Chain of Assisted Living Centers." The Milwaukee Journal Sentinel, 4 July 2001.

Green, Meg. "Universal American Buys Elder-Care Service Company." Bestwire, 26 November 2001.

Health Care Financing Administration. Medicaid Recipients by Type of Service. 2003. Available from http://www.hcfa.gov .

——. Medicaid Vendor Payments by Type of Service. 2003. Available from http://www.hcfa.gov .

——. The Medicaid Program. 2003. Available from http://www.hcfa.gov .

"Res-Care Accepts $700 Million Buyout Offer." New York Times, 13 April 2000.

State of California. Department of Developmental Services. "ICFs." 2003. Available from http://www.dds.cahwnet.gov .



User Contributions:

1
Allen Metzner
I am searching for information on ICF facilities that care for adults that do not have a developmental disability. Specifically I am interested in Mental Health facilities that care for people that have frequent need of medical intervention. An example is an individual who has schizoaffective disorder and who has brittle diabetes. This person may require insulin coverage frequently and is not able to self administer the insulin.

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