SYNOPSIS

As healthcare costs continue to soar and nursing

home staffing and care is at best minimal, not only is
the institutionalizing of the frail and elderly debatable,
it is far from cost-effective. There is a more
compassionate, less expensive choice Residential
Nursing Homes.

RESIDENTIAL
NURSING HOMES
A Proposal for legislators, and the good people of
the State of Michigan

Ken McIntyre Jr., RN

Ferris State University 2016

Executive Summary

ichigan, like many other states, is looking for ways to save scarce healthcare dollars while still
meeting its citizens needs. The Michigan Department of Community Health Task Force on
Nursing Practice warns access to healthcare will become increasingly restricted for Michigan residents if
registered nurses (RNs) are not practicing to the full extent of their required education and
competencies. A very sensible and feasible method of saving money on healthcare is to address the
costs and deficiencies of institutionalized long-term and subacute care.
Allowing RNs to receive Medicaid and/or Medicare reimbursement for long-term and subacute skilled
nursing services, and implementing the concept of Residential Nursing Homes as outlined in this
proposal, will save Michigan tens, if not hundreds, of millions of dollars each year. In addition, care will
be greatly enhanced for those residents and patients.
A hybrid between Adult Foster Care and a Nursing Home, the fundamental idea of Residential Nursing
Homes is a proven concept. Greenhouse Project nursing homes are on a similar scale as Residential
Nursing Homes, however, they do not correct the low nurse-to-resident ratios and the high costs
associated with long-term or subacute care. Residential Nursing Homes correct low nurse-to-resident
ratios and significantly lower costs for both taxpayers and private pay individuals.
The risks and costs for implementing these Residential Nursing Homes will be extremely minimal for the
State of Michigan, or other stakeholders. Although no down-payment loans and loan guarantees will be
required for RNs who wish to open a Residential Nursing Home, the loan will be secured by the value of
the home. Furthermore, Residential Nursing Homes will be easily transferable to another RN in the
event the previous RN wishes relinquish his or her Residential Nursing Home practice.
With approximately 100,000 Michiganders turning age 65 every year for the next 10-20 years, these
individuals will soon develop a need for skilled nursing in long-term and subacute care facilities. If
nothing is done to address this issue, not only will access to healthcare become increasingly restricted, it
will become financially unsustainable.
It is time to allow RNs to help Michigan enhance care for its vulnerable citizens, and reduce the burden
on taxpayers. It is time to implement the concept of Residential Nursing Homes.
Ken McIntyre Jr., RN

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Contents
The Residential Nursing Home Concept ...................................................................................................... 4
Should nurses be allowed to practice autonomously? ............................................................................. 4
What about special equipment and staffing?........................................................................................... 4
Michigan Department of Community Health Task Force on Nursing Practice .......................................... 5
Excerpts from the Task Force on Nursing Practice: Summary of Issue..................................................... 5
Task Force on Nursing Practice: Summary of Solution ............................................................................. 5
Saving Taxpayer Money ............................................................................................................................... 5
Medicaid ................................................................................................................................................... 6
Medicare ................................................................................................................................................... 6
How will Residential Nursing Homes Save Money?.................................................................................... 6
Combined Savings ..................................................................................................................................... 6
Minimal Financial Risk to Taxpayers ........................................................................................................... 6
Economic Impact on the State of Michigan................................................................................................. 7
Providing More Comprehensive Care .......................................................................................................... 7
How to provide better care: By the numbers ........................................................................................... 7
Are there enough nurses? ............................................................................................................................ 8
Incentives for Registered Nurses to Participate .......................................................................................... 9
Scalability .................................................................................................................................................. 9
What kind of residential home is needed? ................................................................................................. 9
Ideal Home ................................................................................................................................................ 9
Modifications ............................................................................................................................................ 9
How legislators and the State of Michigan can help................................................................................. 10
Assistance with Practice Start-Up Costs ................................................................................................. 10
Nursing Home Application Fee Waiver ................................................................................................... 11
Residential Nursing Homes Not reinventing the wheel ....................................................................... 11
A closer look at Greenhouse Project nursing homes ............................................................................ 11
Green House nursing home model deficits .......................................................................................... 12
Licensed Nurse to Resident Ratio ....................................................................................................... 12
Costs .................................................................................................................................................... 12
Money dictates choice between adult foster care, nursing home care ................................................. 12
Excerpts from an article in The Petoskey News, by Lorene Parshall .................................................. 12
Current Laws ............................................................................................................................................... 13
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Can Residential Nursing Homes comply with State and Federal Laws? ................................................. 13
Federal Law Excerpts impacting Residential Nursing Homes ............................................................. 13
483.75(i) Medical Director State Intervention Needed ............................................................. 14
State Law Excerpts impacting Residential Nursing Homes ................................................................. 14
R 325.20111 Amendment Needed ................................................................................................. 14
R 325.20712 Amendment Needed ................................................................................................. 14
R 325.20801, Rule 801 Amendment Needed ................................................................................. 15
R 325.21307 Amendment Needed ................................................................................................. 16
R 325.21307 Amendment Needed ................................................................................................. 16
R 29.1841 Amendment Needed ..................................................................................................... 16
ACT 368 Modifications .................................................................................................................... 16
Michigan Zoning Enabling Act Modifications Needed .................................................................... 17
Proposed Rules for Residential Nursing Homes ........................................................................................ 18
Staffing .................................................................................................................................................... 18
Visiting Hours .......................................................................................................................................... 18
Restricted Areas ...................................................................................................................................... 18

Page 3 of 21

The Residential Nursing Home Concept

Allowing registered nurses to practice autonomously to fullest extent of their skills and education, while
under a physicians indirect guidance and supervision, will not only save taxpayers millions of dollars
every year in healthcare costs, it will improve care without compromising the safety of residents or
patients. Although nurses form the largest group of health professionals, they are frequently restricted
in their scope of practice. Nurses can help to improve health services in a cost effective way, but to do
so, they must be seen as equal partners in health service provision (Wilson, Whitaker, & Whitford,
2012). At no time in our recent history has the independent services of a registered nurse has been so
desperately needed.
A registered nurse providing nursing care in their private residence will be able to provide more
comprehensive, individualized care for the person needing skilled nursing care, and this care can be
provided at a substantial savings. Instead of the nurse having 15 to 50 patients or residents as found in
todays nursing homes, the nurse will have a maximum of 6. A Residential Nursing Home will function in
the same way as a larger nursing home, with all the same equipment and technology as their larger
counterpart. The nurse will be no less skilled than the nurse working in any other nursing home.

Should nurses be allowed to practice autonomously?

To maximize the clinical effectiveness of registered nurses (RNs), they must have autonomy consistent
with their scope of practice. Multiple studies demonstrate that a healthcare organization that provides a
climate in which nurses have authority and autonomy has better patient outcomes (Yoder-Wise,
2015, Kindle locations 14872-14875). Residential Nursing Homes, and registered nurses working
autonomously, with direction from the physician, can produced these better outcomes.
Nurses practicing autonomously under a physicians indirect supervision is a time-proven concept; it is
not a new or innovative method of delivering care.
Nurses practicing autonomously under a physicians indirect supervision happens every day in our
nations nursing homes, particularly on the midnight shift, weekends, or holidays. These nurses,
sometimes fresh out of a nursing program, are given the position of charge nurse in a nursing home with
15 to 50 residents or patients to care for, and 3 to 4 nursing aides to supervise. In most instances, the
only assistance with making critical decisions that is available to the nurse is a telephone call to that
physician.

What about special equipment and staffing?

Contrary to some beliefs, the typical nursing home that you find in your community does not have any
specialized equipment that would be cost-prohibitive to a Residential Nursing Home.
Oxygen concentrators, vital sign machines, wound-vacs, and IV pumps are generally the only specialized
equipment found. Nursing homes are far from being mini-hospitals. The physician does not work at
the nursing home on daily basis, but visit their patients once a month for the first 90 days after
admission, and only once every 60 days thereafter (MLN Matters, 2006, p. 4).

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Michigan Department of Community Health Task Force on

Nursing Practice
Excerpts from the Task Force on Nursing Practice: Summary of Issue
Access to healthcare will become increasingly restricted for Michigan residents if RNs are not practicing
to the full extent of their required education and competencies (Michigan Department of Community
Health, 2012, p. 17). Not only will access to healthcare become increasingly restricted, it will become
financially unsustainable.

Task Force on Nursing Practice: Summary of Solution

To improve Michigan residents access to high-quality, safe healthcare, the State of Michigan
must remove the statutory and regulatory barriers that keep Registered Nurses from practicing
to the full extent of their required education and competencies. In recognition of RNs
education, qualifications, and vital roles in patient care, nurses should have title protection. The
2010 Institute of Medicine (IOM) report The Future of Nursing concluded that all nurses should
practice to the full extent of their education and training. This conclusion is reinforced by the
dynamic nature of the healthcare practice environment and the growing demand for healthcare
that is patient-centered, coordinated, and delivered in the community and patient homes.
Healthcare must be provided seamlessly across all health conditions, settings and providers.
Nurses are uniquely qualified to provide patient-centered, evidence-based care, and care
coordination across all healthcare settings, to improve the outcomes of care. Thus, it is essential
for access to care and for the health and safety of the public - that scope of nursing practice (as
stated in the most recent American Nurses Association Scope and Standards of Practice) is
explicitly included in the Michigan Public Health Code as the basis for decision-making with
respect to nursing scope of practice (Michigan Department of Community Health, 2012, p. 17).
According to the Michigan Department of Health Task Force on Nursing Practice, they expect 100,000
Michiganders to turn age 65 every year for the next 10-20 years, requiring more healthcare and more
coordinated care. The trend is towards more health care in community or home settings; these lessstructured care settings need RNs to assure patient safety and provide patient-centered, evidence based
care, and lead care coordination (Michigan Department of Community Health, 2012, p. 20). Residential
Nursing Homes can be a first step in providing this care.

Saving Taxpayer Money

Costs for long-term and subacute care are staggering. In fiscal year 2012, combined federal and state
Medicaid spending in Michigan was $12,460,330,219 (Kaiser Family Foundation, 2016). Over
$1,778,410,000 of that money was spent on payments to nursing homes for the skilled nursing care of
long-term care residents (Kaiser Family Foundation, 2016). Costs are projected to increase dramatically
as baby-boomers develop a need for these services.
The aging of the population will have wide-ranging implications for the country, and the projected
growth of the older population will present challenges to policy makers and programs, such as Social
Security and Medicare (Ortman, Velkoff, & Hogan, 2014, p. 1.). And of course, Medicaid.

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The average Medicaid cost for long-term care in a nursing home averages around $179 per day, or
approximately $65,335 each year, per individual (Michigan Department of Health and Human Services,
2016). The average cost for Medicare subacute care in a nursing home is $492 per day (Centers for
Medicare & Medicaid Services, 2016, para. 4). The average 25 day stay in subacute care costs $12,300
or more.

Medicaid
For individuals requiring skilled nursing in a long-term care facility, the savings from utilizing Residential
Nursing Homes would amount to approximately $10,585 per year, per person. There are roughly 39,000
people living in Michigans nursing homes (Kaiser Family Foundation, 2014). Permitting 20% of these
people to live in Residential Nursing Home would result in a savings of $82,563,000 each year. Allowing
50% of these people to live in a Residential Nursing Home would result in a yearly savings of
approximately $206,407,500.

Medicare
For individuals requiring subacute care, a Residential Nursing Home could also provide more thorough
and comprehensive care at a substantial savings.
In 2014, there were 92,116 stays averaging 28 days each in subacute care, costing Medicare over
$922,437,000. This amounted to 2,579,248 patient days spent in subacute care at an average cost of
$357.63 per patient day. If 20% of these patient days, (515,849 patient days), were diverted to
Residential Nursing Homes, the savings would be roughly $184,483,000 each year.

How will Residential Nursing Homes Save Money?

Through the use of system similar to managed care. Managed Care is a health care delivery system
organized to manage cost, utilization, and quality (Medicaid.gov, n.d.). Managed care provides a fixed
cost to the user, i.e., Medicaid or Medicare, and a fixed income to the provider, i.e., the Residential
Nursing Home. Residential Nursing Homes will save money by admitting residents or patients at a fixed
price to the government of $54,750, per bed, per year. That amounts to $150 per day, per patient or
resident, regardless of their acuity.

Combined Savings
Under this proposal, if 20% of Medicare and Medicaid beneficiaries were diverted to a Residential
Nursing Home, the approximate savings would be over $267,000,000 each year. To meet this goal, just
over 1,800 Residential Nursing Homes, each with 6 licensed beds would be needed. This is not an
unrealistic goal. Please read the Are there enough nurses? section.

Minimal Financial Risk to Taxpayers

Assistance to registered nurses provided by State government would be in the form of loan guarantees
to begin their practice in a Residential Nursing Home. These unsubsidized loans would be issued by a
bank or other lending company at current mortgage rates, and secured by the residence modified,
newly constructed, or purchased.

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In some instances, an insurer who pays for long-term or subacute care may elect to lend, or guarantee a
loan for a registered nurse who would provide care exclusively for their beneficiaries.

Economic Impact on the State of Michigan

In addition to saving millions of dollars of taxpayer money each year, the State of Michigan would realize
numerous other economic benefits such as:
Increase in new construction and remodeling
Increase in real estate sales, especially luxury homes
New markets for lenders
Lower unemployment rate in the nursing sector
Increase in property tax base for many counties
Colleges and universities can offer classes in operating these homes

Providing More Comprehensive Care

Federal and State staffing standards are based on a simplistic model that allows for arbitrary staffing
levels that do not reflect real-life circumstances, such as the acuity of the patient or resident. Many
nursing homes base care on the computational model of Hours Per Patient Day (HPPD, or simply PPD).
It is a metric we can relate to and quickly translate into how many patients are assigned to one staff
member (Kirby, 2015, p. 65). PPD calculations also result in how many hours are allotted to care for a
resident or patient.
Michigan law requires nursing homes maintain a nursing home staff sufficient to provide not less than
2.25 hours of nursing care by employed nursing care personnel per patient per day (Legislative Council,
State of Michigan, 2015). The Public Health Code adds additional staffing requirements.
The Public Health Code, Act 368 of 1978, Section 333.21720a states, The ratio of patients to nursing
care personnel during a morning shift shall not exceed 8 patients to 1 nursing care personnel; the ratio
of patients to nursing care personnel during an afternoon shift shall not exceed 12 patients to 1 nursing
care personnel; and the ratio of patients to nursing care personnel during a nighttime shift shall not
exceed 15 patients to 1 nursing care personnel and there shall be sufficient nursing care personnel
available on duty to assure coverage for patients at all times during the shift (Legislative Council, State
of Michigan, 2015). It is important to note that nursing personnel includes non-nursing staff, such as
a Certified Nursing Assistant. Included in this federal law, a requirement that a licensed nurse be on
duty 24 hours per day, 7 days per week, of which, 8 hours per day, 7 days per week must, be a
Registered Nurse.

How to provide better care: By the numbers

In a study by Thomson et al., in long-term care, the low nurse-to-resident ratio often means that a
single nurse is responsible for the care and safety of a large number of highly vulnerable and clinically
complex patients (2009, p. 266). The observation in this study is applicable to today. As an example,
the nursing home that I formerly worked in operates an 82 bed skilled nursing center. 52 beds are in the
long-term care section of the nursing home; 30 beds are in the subacute care section. On the 6:30 p.m.
to 7:00 a.m. shift, in long-term care, I had 51 residents and 3 aides that I was responsible for. As this
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study noted, the medication administration process accounts for a substantial portion of nursing time
(Thomson et al., 2009, p. 271). This observation is also relevant today.
During a 12-hour shift, I spent nearly 10 hours preparing and administering medications, eye drops,
tube-feeds, breathing treatments, and responding to requests for non-scheduled pain medication. After
re-stocking the medication cart, checking in medications delivered from the pharmacy, and completing
essential treatments such as replacing dressings on 4 5 residents, I had approximately 1 to 1.5 hours to
provide care for the remaining 47 48 residents. That means the other residents each received
approximately 2 minutes of my time. This scenario is repeated on the day shift, with the exception that
a resident may get 5 minutes of skilled nursing care because there are two nurses on duty to care for 51
residents.
Residential Nursing Homes address this issue by reducing the number of residents per nurse to a
maximum of 6. Time-with-patient will increase to hours, instead of minutes, as currently experienced by
those individuals residing in skilled nursing homes.

Are there enough nurses?

Yes! According to the Michigan Center for Nursing, as of January 1, 2013, there were 139,077 registered
nurses in Michigan (Public Sector Consultants, Inc., 2013, p. 4). Of these 139,077 registered nurses,
2.6%, or over 3,600 were not employed, and were seeking employment in nursing or a related area
(Public Sector Consultants, Inc., 2013, p. 15). As an example, these 3,600 registered nurses, if permitted
to operate a Residential Nursing Home, would be able to care for over 21,500 individuals needing longterm or skilled nursing care, saving Michigan taxpayers over $227,000,000.
Are registered nurses interested in their own practice? Absolutely! An informal survey of nurses
produced the following results:

Would you operate a Residential Nursing Home?

8%

15%
39%
Yes
Strongly consider
Not sure
No

38%

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Incentives for Registered Nurses to Participate

The opportunity to work at home at a wage and benefit package comparable to, or better than
wages provided in hospitals, and far better than the wages and benefits offered by nursing
homes
Build a practice that can be sold upon retirement from the nursing profession that can provide a
comfortable retirement
A less stressful work environment
Personal gratification that comes from providing enhanced care, a sense of accomplishment,
and professional growth
The opportunity to care for those people for whom the nurse has a passion for whether it is
hospice, geriatrics, post-surgery patients, or any other field

Scalability
The nurse can choose the type of care and number of people to care for. Like their larger counterparts,
Residential Nursing Homes can be flexible the home can take either individuals that require long-term
skilled nursing, short term subacute care, or a combination of both. In addition, the nurse can
determine their participation in indirect care.

What kind of residential home is needed?

Ideal Home
Clearly, the typical 1,500 square foot, 3-bedroom, 2-bathroom ranch home will not be suitable. The
type of residential home needed would most likely be a minimum of 5,000 square feet, with enough
bedrooms and bathrooms to accommodate the residents, the nurse, and the nurses family. Separate
living areas, such as a living room or dining room, may be desirable.
The price range to remodel and/or purchase a current residence, or the cost-to-build this type of
Residential Nursing Home would be approximately $300,000 to 2.2 million dollars, depending on the
number of residents or patients the home is licensed for, and the size of the nurses family.

Modifications
Many homes in Michigan that fit the requirements of a Residential Nursing Home are currently on the
market, and could easily be modified at a comparatively minimal cost. The three most expensive
modifications to a current residence, or standard new construction would be:
1. In homes that have residents on a second floor, an elevator will be required. Residential home
elevators vary in cost depending on the style wanted or capacity needed based on the acuity of
the residents house in the home. A typical residential elevator would cost approximately
$16,000 plus installation costs (Ameriglide, n.d.). The total estimated cost would be in the range
of $30,000 to $32,000, and as high as $60,000 (Personal communication, Jerry Minchella, June
17, 2016)
2. A back-up generator that automatically engages when utility power is lost would cost
approximately $4,000 plus installation costs (The Home Depot, n.d.). The estimated total cost
would be in the range of $7,000 to $8,000.
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3. Fire sprinklers will be required throughout the home. The cost to retroactively install a
residential fire sprinkler system would be approximately $1.35 per square foot. (National Fire
Protection Association, 2013). A 7,500 square foot home would cost approximately $10,125 to
retrofit. New construction should be slightly lower.
Other modifications may be ground-floor bedrooms and bathrooms to avoid the installation of an
elevator for patient or resident use.

How legislators and the State of Michigan can help

Nurses graduating from college are generally saddled with substantial school debt. Many are young and
have not established themselves. Becoming an associates degree Registered Nurse costs nearly
$20,000 at a local community college (Northwestern Michigan College, 2016). Becoming a bachelors
degree prepared professional Registered Nurse adds nearly $12,000 more to the cost (Ferris State
University, n.d.). Assistance with starting a Residential Nursing Home practice would be crucial; this
proposal will fail without it.

Assistance with Practice Start-Up Costs

Assistance with practice start-up is perhaps the most critical aspect of this proposal, and again, this
proposal will fail if this help is not provided. This model of skilled nursing care will require a substantial
residential home that will be able to accommodate not only the nurse and his or her family, but up to 6
residents or patients, and any required modifications needed to be made to the home. Although not
cost-prohibitive, specific medical equipment will need to be purchased.
This assistance can be in the form of grants, direct loans, or loan guarantees to purchase or construct an
appropriate home, adding on to, or remodeling a current residence. The financial assistance for
purchasing, or new construction will require a no down-payment feature.
The following requirements have been identified:
1. Loans with no down-payment.
2. The home should have a minimum of 5,000 square feet of above-ground living space with 1 6
appropriately sized bedrooms and bathrooms in addition to the bedrooms and bathrooms
required by the registered nurse and his or her family.
3. The home should have a back-up generator able to supply the electrical needs of the entire
home.
4. The home should have a sprinkler system for fire suppression.
5. In two-story homes, the home should have an elevator capable of transferring a resident or
patient and an attendant, with or without a wheelchair.
6. Managed care model. Per bed, fixed payment arrangement for the services provided by a
registered nurse in a Residential Nursing Home.
7. Escrow account for mortgage, property taxes, and insurance.
8. Medical equipment to include an AED, vital signs monitor, medication cart, and other
equipment deemed necessary.

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Nursing Home Application Fee Waiver

The $2,000 nursing home application fee for new Residential Nursing Home facilities to waived by the
State of Michigan for first 5 years and adopt a significantly reduced application fee for new Residential
Nursing Home facilities of $250 or less, for each year thereafter.

Residential Nursing Homes Not reinventing the wheel

Skilled nursing in a residential or home setting is not a new concept, and in fact, it was the norm in the
early 20th century. Studies of the early 20th century nurse labor market estimated that approximately
80 percent of practicing nurses worked as private duty nurses, making it by far the largest nurse labor
field employing nurses (Committee for the Study of Nursing Education, 1923, as cited in Whelan, 2012,
p. 2). However, in todays world, with the high costs of skilled labor, this method of delivering care is
not practical for the average consumer.
Likewise, the concept of small nursing homes with private rooms is not a new idea. In 2001, Bill Thomas,
a physician, received a modest $300,000 grant from the Robert Wood Johnson Foundation to pursue his
dream of replacing large nursing homes with small, homelike facilities for 10 to 12 residents (Lagnado,
2008). Today, there are 187 Green Houses operating in 28 states, with 150 more under development
(Garland, 2016). Currently, there are 5 Greenhouse Project homes located in Michigan.

A closer look at Greenhouse Project nursing homes

According to the Robert Wood Johnson Foundation,
THE GREEN HOUSE Project represents a revolution in long-term care, creating small homes
that return control, dignity, and a sense of well-being to elders, while providing high-quality,
personalized care. A Green House home differs from a traditional nursing home in terms of
facility size, interior design, organizational structure, staffing patterns, and methods of
delivering skilled professional services. Green House homes are designed from the ground up to
look and feel like a real home (Robert Wood Johnson Foundation, n.d.).
There is little doubt the Green House nursing homes model greatly enhances the life of the resident
who lives there, and increases the gratitude their families. In a study by Lum, Kane, Cutler, & Yu, The
improved scores in the satisfaction domains suggest that families appreciated increased autonomy for
their residents, approved of the enhanced privacy and physical environments, perceived that general
amenities including meals and housekeeping were better (2008, p. 49). Residents of Green House
nursing homes receive 5.3 hours of nursing care (combined RN, LPN, CNA) per day, as opposed to 3.6
hours of nursing care in a traditional nursing home, an increase of 1.7 hours (Sharkey, Hudak, Horn,
James, & Howes, 2010, p. 129).
In addition, Green House nursing homes generally result in improved working conditions and pay for
the Shahbazim (Certified Nursing Assistants or CNAs). Traditionally, CNA positions are low-paid, lowstatus jobs characterized by high turnover rates (Dawson, 2007). In the Green House, the Shabazim [sic]
role has elevated importance, and CNA pay rates have shifted upward (Loe & Moore, 2011, p. 757).
Aides also reported a sense of empowerment in the context of shifting hierarchies, a more enabling
work environment, enhanced control of time/space, stronger elder-caregiver ties, and diminished guilt

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and stress in their work (Loe & Moore, 2011, p. 758). Nevertheless, there are two significant shortfalls
in the Green House nursing home model.

Green House nursing home model deficits

Licensed Nurse to Resident Ratio
The primary shortfall is a resident receives no more licensed nursing care each day as in a traditional
nursing home, and the licensed nurse is burdened with the same high resident-to-nurse ratio of one
nurse to 20 to 30 or more residents during first and second shifts, and more than 30 residents on third
shift. There are two Shahbazim for each house on the first and second shifts and one on third shift.
Green House nurses generally cover two or three homes during first and second shifts, often covering
additional homes on third shift (Bowers & Nolet, 2014, p. S54). Although the Green House model of
care is generally a better work environment for the Shahbazim, it continues to be a difficult work
environment for the nurse.

Costs
The secondary shortfall is costs. Green House nursing homes have higher operating costs, higher costs
for the private-pay consumer, and are cost neutral for Medicaid. A recent study found an analyses
indicated that although Green House (GH) nursing costs were higher than the national average, other
operational costs were lower, with the adjusted total operating expenses of GH homes being 7.6
percent higher than the national average (Jenkens et al. 2011, as cited in Zimmerman et al., 2015,
p. 478). In the Green House publication A Long-Term Care Model that Improves Lives and Bottom
Lines, the brochure states, Research shows that 61 percent of caregivers would pay 5 percent to more
than 25 percent more to have their family members live in a Green House home, with three-fourths of
those caregivers willing to pay 10 to 25 percent more (The Green House Project, n.d., p. 6). There
needs to be a bridge between Adult Foster Care and Nursing Homes

Money dictates choice between adult foster care, nursing home care
Excerpts from an article in The Petoskey News, by Lorene Parshall
Richard Bottomley is facing a difficult issue encountered by millions of adult children in the U.S.
His mother, Dorothy, 93, can no longer make her own decisions, and he wants to insure that her
final years are comfortable.
I moved her to Rocking Chair Home Care, Bottomley said. It is licensed for four residents, and
its a family-type setting. Clients and staff eat together, and my mother is able to have her own
room. The owner is an LPN (licensed practical nurse).
Shes happy and gets good care, he said.
As his mothers guardian, Bottomley realized recently that she would run out of her savings
within a year and would need to go on Medicaid. He has researched and found that it would be
easier to place her in a nursing home where Medicaid will pay an average of $6,618 rather than
keep her at the AFC home where she is thriving.
He feels the move to a nursing home would be traumatic to his mother. She wouldnt be able to
have her own room and there would be a lower ratio of staff to clients to provide services. It
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also would cost taxpayers far more money, which doesnt make sense to him in these difficult
economic times (Parshall, 2012).
Residential Nursing Homes can bridge the skilled nursing care gap between Adult Foster Care (AFC) and
conventional nursing homes. Not all AFC homes are run by a nurse, but all Residential Nursing Homes
will be.

Current Laws
Can Residential Nursing Homes comply with State and Federal Laws?
All Federal laws can be complied with, or meet strict allowances for waivers. Very few State laws will
need to be amended. Laws needing amendment are in red.

Federal Law Excerpts impacting Residential Nursing Homes

42 U.S. Code 1395i3 - Requirements for, and assuring quality of care in, skilled nursing facilities.
(4) Provision of services and activities
(C) Required nursing care
(ii)
(III) the facility either has only patients whose physicians have indicated (through physicians orders or
admission notes) that each such patient does not require the services of a registered nurse or a
physician for a 48-hour period, or has made arrangements for a registered professional nurse or a
physician to spend such time at such facility as may be indicated as necessary by the physician to
provide necessary skilled nursing services on days when the regular full-time registered professional
nurse is not on duty,
42 CFR 483.30 - Nursing services
(c) Nursing facilities: Waiver of requirement to provide licensed nurses on a 24-hour basis. To the extent
that a facility is unable to meet the requirements of paragraphs (a)(2) and (b)(1) of this section, a State
may waive such requirements with respect to the facility if
(2) The State determines that a waiver of the requirement will not endanger the health or safety of
individuals staying in the facility;
(3) The State finds that, for any periods in which licensed nursing services are not available, a registered
nurse or a physician is obligated to respond immediately to telephone calls from the facility;
483.75(i) Medical Director
(1) The facility must designate a physician to serve as medical director.
(2) The medical director is responsible for
(i) Implementation of resident care policies; and
(ii) The coordination of medical care in the facility.
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483.75(i) Medical Director State Intervention Needed

A variable surcharge per month, per resident or patient will be paid by the State of Michigan for
each long-term care resident or subacute care patient to cover the costs of the Centers for
Medicare & Medicaid Services (CMS) requirement that each nursing home have a medical
director on staff.
This surcharge will be determined based on the actual cost for retaining a medical director.

State Law Excerpts impacting Residential Nursing Homes

R 325.20111 Governing bodies, administrators, and supervisors; responsibilities.
Rule 111. (1) The governing body of a nursing home shall assume full legal responsibility for the overall
conduct and operation of the home. In the absence of an organized governing body, the owner,
operator, or person legally responsible for the overall conduct and operation of the home shall carry out
the functions of the governing body.
(2) The governing body shall appoint a licensed nursing home administrator and shall delegate to the
administrator the responsibility for operating the home in accordance with policies established by the
governing body. An administrator and all other persons in supervisory positions shall be not less than 18
years of age.
(3) An administrator shall designate, in writing, a competent person who is not less than 18 years of age
to carry out the responsibilities and duties of the administrator in the administrator's absence.

R 325.20111 Amendment Needed

Residential Nursing Homes will not require a licensed nursing home administrator.
R 325.20712 Diversional activities.
Rule 712. (1) A home shall provide an ongoing diversional activities program that stimulates and
promotes social interaction, communication, and constructive living.
(2) There shall be a qualified staff member and such additional staff as necessary to plan, conduct, and
evaluate individual and group activities. Individual and group activities shall be available 7 days a week.
(3) There shall be adequate recreational and therapeutic areas, equipment, and supplies to conduct
ongoing recreational and therapeutic activities.
(4) Adequate storage space shall be provided for equipment close to the space utilized for such
activities.
(5) A patient shall be provided diversional activities suited to the patient's needs, capabilities, and
interests as an adjunct to treatment to encourage the patient, insofar as possible, to resume self-care
and normal activities.

R 325.20712 Amendment Needed

Residential Nursing Homes will not require a separate, qualified staff member to plan, conduct,
and evaluate individual and group activities. The registered nurse will ensure that residents
and/or patients are afforded the opportunity to engage in recreational, therapeutic, and
diversional activities.
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R 325.20801 Supervisor of dietary or food services; qualifications.

Rule 801. (1) Dietary or food services in a home shall be supervised by an individual who meets any of
the following qualifications:
(a) Is registered by the commission on dietetic registration of the American dietetic association.
(b) Has completed all nutrition and related coursework necessary to take the registration examination
required to become a registered dietitian.
(c) Is a graduate of a dietetic technician training program approved by the American dietetic association.
(d) Is a graduate of an approved correspondence or classroom dietetic assistant training program which
qualified such person for certification by the hospital, institution, and educational food service society.
(e) Is a graduate of a dietetic assistant training program granted approved status by the Michigan
department of public health before July 6, 1979.
(2) When the dietary or food services supervisor is other than a registered dietitian, the supervisor shall
receive routine consultation and technical assistance from a registered dietitian (R.D.). Consultation
time shall not be less than 4 hours every 60 days. Additional consultation time may be needed based on
the total number of patients, incidence of nutrition-related health problems, and food service
management needs of the facility.

R 325.20801, Rule 801 Amendment Needed

Residential Nursing Homes dietary and food services will be guided by the registered dietician of
the County Health Department in which the home is located.
R 325.21307 Elevators and emergency electrical service.
Rule 1307. A new construction, addition, major change, or conversion after August 22, 1969, shall
provide the following:
(a) An elevator, if patient bedrooms are situated on more than 1 floor level. An elevator shall have a cab
size of not less than 5 feet by 7 feet, 6 inches.
(b) Emergency electrical service capable of providing not less than 4 hours of service at full load. It shall
serve lights at all of the following locations:
(i) Nursing stations.
(ii) Telephone switchboard.
(iii) Night lights.
(iv) Exit and corridor lights.
(v) Heating plant controls.
(vi) Other critical mechanical equipment essential to the safety and welfare of patients, personnel, and
visitors in the home.

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R 325.21307 Amendment Needed

Residential Nursing Homes may employ stair-lifts or residential home elevators in place of an
elevator having a cab of not less than 5 feet by 7 feet, 6 inches.
R 325.21321 Laundry and linens.
Rule 1321. (1) The collection, storage, and transfer of clean and soiled linen shall be accomplished in a
manner which will minimize the danger of disease transmission.
(2) A home that processes its own linen shall provide a well-ventilated laundry of sufficient size which
shall include all of the following:
(a) Commercial laundry equipment with the capacity to meet the needs of the home.
(b) A separate soiled linen room.
(c) A separate laundry processing room.
(d) A separate clean linen storage area.
(e) A lavatory for handwashing in the laundry processing area.
(3) A home that uses a commercial or other outside laundry facility shall have a soiled linen storage
room and a separate clean linen storage room.

R 325.21307 Amendment Needed

A Residential Nursing Home is exempt from Rule (2).
R 29.1841 Life safety code; existing nursing homes; amendment; adoption by reference.
Rule 41. Existing nursing homes shall comply with the provisions of chapters 1 to 10, 11, 19, and 43 of
the code, which are adopted by reference in R 29.1802. Section 19.3.5.1 of the code is amended to read
as follows:
19.3.5.1. Buildings containing nursing homes shall be protected throughout by an approved, supervised
automatic sprinkler system in accordance with Section 9.7, unless otherwise permitted by 19.3.5.4. The
facility owner or designated representative shall comply with this requirement by July 28, 2019.

R 29.1841 Amendment Needed

Residential Nursing Homes shall be protected throughout by a residential automatic sprinkler
system installed by a licensed contractor.

ACT 368 Modifications

AMMENDMENT NEEDED Act 368
Amend Public Health Code, Act 368 of 1978, Part 222, Certificates of Need, 333.22207 Definitions; M to
S. [M.S.A. 14.15(22207)].
To include:

Page 16 of 21

Residential Nursing Home means a residential home that is a primary residence, either owned, rented,
or leased by a register nurse licensed in the State of Michigan, providing skilled nursing care for
individuals needing sub-acute or long-term care.
AMENDMENT NEEDED Act 368
Amend Public Health Code, Act 368 of 1978, Part 222, Certificates of Need, 333.22224 Certificate of
need not required, Sec. 22224.
To include:
(3) A health facility required to be licensed as a Residential Nursing Home is not required to obtain a
certificate of need in order to be granted a license.
AMENDMENT NEEDED Act 368
Amend Act 368, 333.21720a, Sec. 21720a, (2) from:
An employee designated as a member of the nursing staff shall not be engaged in providing basic
services such as food preparation, housekeeping, laundry, or maintenance services
To say:
An employee designated as a member of the nursing staff shall not be engaged in providing basic
services such as food preparation, housekeeping, laundry, or maintenance services to An employee
designated as a member of the nursing staff shall not be engaged in providing basic services such as
food preparation, housekeeping, laundry, or maintenance services in nursing homes with greater than 6
certified beds.

Michigan Zoning Enabling Act Modifications Needed

AMMENDMENT NEEDED
Amend the Michigan Zoning Enabling Act, Act 110 of 2006, Article I, General Provisions. 125.3102
Definitions. Sec. 102 from:
As used in this act: (t) "State licensed residential facility" means a structure constructed for residential
purposes that is licensed by the state under the adult foster care facility licensing act, 1979 PA 218, MCL
400.701 to 400.737, or 1973 PA 116, MCL 722.111 to 722.128, and provides residential services for 6 or
fewer individuals under 24-hour supervision or care.
To say:
Article I, General Provisions. 125.3102 Definitions. Sec. 102. As used in this act: (t) "State licensed
residential facility" means a structure constructed for residential purposes that is licensed by the state
under the adult foster care facility licensing act, 1979 PA 218, MCL 400.701 to 400.737, or 1973 PA 116,
MCL 722.111 to 722.128, and provides residential services for 6 or fewer individuals under 24-hour
supervision or care, and a structure constructed for residential purposes that is licensed by the state
under the residential nursing facility licensing act, [PUT APPROPRIATE ACT NAME HERE,] and provides
skilled nursing services for 6 or fewer individuals under 24-hour supervision or care.
AMMENDMENT NEEDED
Page 17 of 21

Amend Article II, Zoning Authorization and Initiation, 125.3206 Residential use of property; adult foster
care facilities; family or group child care homes.
To include:
Article II, Zoning Authorization and Initiation, 125.3206 Residential use of property; residential nursing
homes, adult foster care facilities; family or group child care homes.

Proposed Rules for Residential Nursing Homes

Staffing
(1) The Residential Nursing Home shall have at minimum of 1 registered nurse on duty 8 consecutive
hours per day, 7 days per week, and the nurse shall remain on the premises and on call and available for
duty the remaining 16 consecutive hours per day, 7 days per week unless one of the following
conditions is met:
a) A registered nurse employed by the Residential Nursing Home is on duty and on call as defined
in staffing rule (1).
b) A licensed practical nurse or licensed vocational nurse is on duty and on call as defined in
staffing rule (1) and a registered nurse or physician is on call and responds to communication
from the Residential Nursing Home.
c) A certified nursing assistant is on duty and the registered nurse on duty or on call as defined in
staffing rule (1) does not leave the Residential Nursing Home or its premises for more than 4
consecutive hours and responds to communication from the Residential Nursing Home.
(2) The Residential Nursing Home shall have 1 certified nursing assistant on duty a minimum of 12
consecutive hours per day, 7 days per week unless one of the following conditions is met:
a) In an emergency, the registered nurse may assign a responsible person no less than 18 years
old, of good moral character and suitable temperament, to assist the nurse in caring for the
patients or residents.

Visiting Hours
(1) The Residential Nursing Home shall establish visiting hours of no less than 12 hours per day, 7 days
per week, from the hours of 0900 (9 am) to 2100 (9 pm), and other hours by appointment by mutual
agreement between the registered nurse and the visitors.
(2) The Residential Nursing Home may limit the number of visitors for each resident or patient allowed
at any one time.

Restricted Areas
(1) The Residential Nursing Home may restrict patients, residents, and visitors to specific areas of the
home, however, the unrestricted areas must meet minimum square footage regulations for sleeping and
living areas.

Page 18 of 21

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