CurrentTennessee Department of Finance and Administration — Division of TennCarePolicy N/A

ACLF Rate Change and 2026 Maximum Room and Board Charges for Persons Receiving Assisted Care Living Facility Services in the CHOICES Program

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This policy establishes reimbursement limits for covered Assisted Care Living Facility services and maximum room-and-board charges for CHOICES members. It applies to ACLF providers and TennCare managed care organizations serving CHOICES members.

Policy Summary

PayerTennessee Department of Finance and Administration — Division of TennCare

PolicyACLF Rate Change and 2026 Maximum Room and Board Charges for Persons Receiving Assisted Care Living Facility Services in the CHOICES Program

Policy CodePolicy N/A

Change TypeReimbursement and room-and-board limit update

Effective DateJanuary 1, 2026

Next Review DateN/A

Key ActionLimit room-and-board charges for CHOICES members to the lesser of $2,385.60 per month or the lesser amount charged to a comparable non-CHOICES resident.

SourceLink

POLICY UPDATE CHANGES

The maximum monthly room-and-board charge for a CHOICES member is $2,385.60 for 2026, subject to the lesser-charge and private-room rules.

The maximum combined monthly payment to an ACLF is $3,883.37 for covered ACLF services and room and board unless a resident or family voluntarily elects a private room.

$1,497.77/moMaximum reimbursement for covered ACLF services

$2,385.60/mo2026 maximum room-and-board charge

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CurrentTennessee Department of Finance and Administration — Division of TennCarePolicy N/A

ACLF Rate Change and 2026 Maximum Room and Board Charges for Persons Receiving Assisted Care Living Facility Services in the CHOICES Program

Customize your policy alerts

Sign up for all Tennessee Department of Finance and Administration — Division of TennCare policy alerts

Know when Tennessee Department of Finance and Administration — Division of TennCare releases new policies or updates existing guidance.

Monitor payer policy activity

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Policy Summary

PayerTennessee Department of Finance and Administration — Division of TennCare

PolicyACLF Rate Change and 2026 Maximum Room and Board Charges for Persons Receiving Assisted Care Living Facility Services in the CHOICES Program

Policy CodePolicy N/A

Change TypeReimbursement and room-and-board limit update

Effective DateJanuary 1, 2026

Next Review DateN/A

Key ActionLimit room-and-board charges for CHOICES members to the lesser of $2,385.60 per month or the lesser amount charged to a comparable non-CHOICES resident.

SourceLink

POLICY UPDATE CHANGES

The maximum monthly room-and-board charge for a CHOICES member is $2,385.60 for 2026, subject to the lesser-charge and private-room rules.

The maximum combined monthly payment to an ACLF is $3,883.37 for covered ACLF services and room and board unless a resident or family voluntarily elects a private room.

$1,497.77/moMaximum reimbursement for covered ACLF services

$2,385.60/mo2026 maximum room-and-board charge

$3,883.37/moMaximum combined facility payment

80%Room-and-board limit of maximum PNA

30 daysAdvance discharge notice

Eligibility and Billing Limits

Eligibility and covered ACLF services

A CHOICES member may receive covered ACLF services when ALL of the following are met:

ALL of the following

Member is enrolled in the CHOICES program.
ACLF services are identified in an approved Person-Centered Support Plan.
Claimed costs are for actual covered care rather than room and board.

Room-and-board billing limits

Room-and-board billing is permitted only when ALL of the following requirements are met:

ALL of the following

Monthly room-and-board charge does not exceed $2,385.60 or the lesser amount charged to a comparable non-CHOICES resident.Lesser of $2,385.60 per month or the lesser comparable non-CHOICES charge
Any private-room differential is voluntarily elected by the resident or family and is limited to the difference between the facility's private-room and semi-private-room charges for non-Medicaid residents.
The private-room election is not a condition of admission.
The provider does not bill the member or family for covered ACLF services or shift covered-service costs to room and board.

Reimbursement and Cost Components

Covered ACLF service componentsmixedCovered

Personal care services	Personal care services
Homemaker services	Homemaker services
Medication oversight	Medication oversight

Non-covered room-and-board cost categoriesmixedNot Covered

Rent, mortgage payments, title insurance, mortgage insurance	Rent, mortgage payments, title insurance, mortgage insurance
Property and casualty insurance	Property and casualty insurance
Property taxes	Property taxes
Utilities, resident phone, cable TV, etc.	Utilities, resident phone, cable TV, etc.
Building and/or grounds maintenance	Building and/or grounds maintenance
Residents' 'raw' food costs including individual special dietary needs	Residents' 'raw' food costs including individual special dietary needs (the cost of preparing, serving, and cleaning up after meals may be covered under the 1115 waiver)
Household supplies and equipment necessary for the room and board of the individual	Household supplies and equipment necessary for the room and board of the individual
Furnishings used by the individual	Furnishings used by the individual (does not include office furnishings)

Covered operational and staffing cost componentsmixedCovered

Salaries of personal care support employees, homemaker employees, other support staff and supervisors who provide oversight	Salaries of personal care support employees, homemaker employees, other support staff and supervisors who provide oversight
The cost of preparing, serving, and cleaning up after meals	The cost of preparing, serving, and cleaning up after meals ('raw' food costs are excluded)
FICA, staff health insurance costs or other benefits, worker's compensation, unemployment compensation	FICA, staff health insurance costs or other benefits, worker's compensation, unemployment compensation (as apportioned to support and supervision)
Staff travel	Staff travel
Resident travel (including vehicle depreciation)	Resident travel (including vehicle depreciation)
Administrative overhead costs of doing business	Administrative overhead costs of doing business, including office supplies and furnishings, percentage of administrative staff salaries, office telephone, recruitment, audit fees, operating fees/permits/licenses, percentage of office space costs, data processing costs, legal fees
Staff liability insurance/agency liability insurance	Staff liability insurance/agency liability insurance
Staff training/development/education	Staff training/development/education

Maximum covered ACLF services reimbursement

Monthly limit$1,497.77 per month

Covered servicesActual care provided in the ACLF, including personal care services, homemaker services, and medication oversight

Excluded costsRoom-and-board costs are excluded from the covered ACLF services reimbursement

Maximum Personal Needs Allowance

Monthly maximum$2,982 per month as of January 1, 2026

Calculation basis300% of the federal Supplemental Security Income (SSI) benefit rate

Provider Billing and Compliance Actions

Billing Rule

Separate covered ACLF services from room and board

Bill only actual covered care under the CHOICES ACLF services benefit, including personal care services, homemaker services, and medication oversight. Exclude room and board from the covered-service reimbursement claim.

Billing Rule

Apply the 2026 room-and-board cap

For 2026, limit room-and-board charges for CHOICES members to the lesser of $2,385.60 per month or any lesser amount charged to a resident not enrolled in the CHOICES program. A voluntarily elected private-room differential may be charged separately under the applicable private-room rules.

The $2,385.60 maximum equals 80% of the $2,982 monthly Personal Needs Allowance.
The maximum combined monthly payment to the facility is $3,883.37, excluding a voluntarily elected private-room differential.

Key Terms

Personal Needs Allowance (PNA)

DefinitionThe amount of money a CHOICES member is allowed to keep to meet community living expenses

CHOICES basisThe PNA is set at 300% of the federal SSI benefit rate

2026 amount$2,982 per month as of January 1, 2026

Covered ACLF services

DefinitionActual care provided to a CHOICES enrollee in an Assisted Care Living Facility

ExamplesPersonal care services, homemaker services, and medication oversight

Exclusion

Policy Summary

PayerTennessee Department of Finance and Administration — Division of TennCare

PolicyACLF Rate Change and 2026 Maximum Room and Board Charges for Persons Receiving Assisted Care Living Facility Services in the CHOICES Program

Policy CodePolicy N/A

Change TypeReimbursement and room-and-board limit update

Effective DateJanuary 1, 2026

Next Review DateN/A

Key ActionLimit room-and-board charges for CHOICES members to the lesser of $2,385.60 per month or the lesser amount charged to a comparable non-CHOICES resident.

SourceLink

On This Page

Annual adjustmentThe PNA changes each year in accordance with the federal SSI benefit rate

Maximum CHOICES room-and-board charge

2026 maximum$2,385.60 per month

Percentage rule80% of the maximum Personal Needs Allowance of $2,982

Lesser-charge ruleThe charge cannot exceed the lesser of $2,385.60 or the lesser amount charged to a resident not enrolled in CHOICES

Private-room differentialA higher charge may be voluntarily elected for a private room; it may not be a condition of admission and is limited to the private-versus-semi-private room difference charged to a non-Medicaid resident

Maximum combined facility payment

Monthly maximum$3,883.37 per month

Included paymentsThe combined payment consists of covered ACLF services paid by TennCare and room and board

Private-room exceptionThe maximum excludes a voluntarily elected private-room differential

Discharge notice for room-and-board delinquency

Minimum noticeAt least 30 days advance notice

TriggerThe notice applies when a participant becomes delinquent in paying the room-and-board charge

Provider actionAfter providing proper notice, the ACLF provider may take appropriate steps to discharge the individual

Denial Risk

Keep private-room election voluntary

Do not require a resident or family to pay a higher private-room charge as a condition of admission. The election must be solely the resident’s or family’s decision, and the additional amount must be limited to the difference between the facility’s private-room and semi-private-room charges for a non-Medicaid resident.

Billing Rule

Prohibit balance billing and cost shifting

Accept the amount of reimbursement provided under the CHOICES program for covered ACLF services as payment in full. Do not bill the member or family for any portion of covered ACLF services or shift covered-service costs to non-covered room-and-board charges.

Billing Rule

Apply patient liability correctly

Collect income exceeding the member’s Personal Needs Allowance as patient liability and deduct it from the amount billed to the MCO for covered ACLF services. Collect room and board separately from this patient-liability amount.

Documentation Required

Follow discharge notice requirements

If a participant becomes delinquent in paying room and board, provide at least 30 days’ advance notice before taking appropriate steps to discharge the individual from the facility.

Room and board is not included in the covered ACLF services benefit

Room and board

Housing costsRent, mortgage payments, title insurance, mortgage insurance, property and casualty insurance, and property taxes

Utilities and maintenanceUtilities, resident phone, cable television, and building or grounds maintenance

Food and household costsRaw food costs, including individual special dietary needs; household supplies and equipment; and individual furnishings

Patient liability

DefinitionIncome exceeding the member's Personal Needs Allowance

CollectionThe ACLF provider must collect the excess income as patient liability

Billing treatmentThe amount must be deducted from the amount billed to the MCO for covered ACLF services

Separate paymentPatient-liability payments are in addition to room-and-board costs, which are also paid to the ACLF provider by the member