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Colorado - Assisted Living Facility — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-09

The Colorado Department of Public Health and Environment (CDPHE) licenses congregate residential care settings as Assisted Living Residences (ALRs), while the Department of Health Care Policy and Financing (HCPF) certifies them as Alternative Care Facilities (ACFs) to provide services under the Elderly, Blind, and Disabled (EBD) and Community Mental Health Supports (CMHS) waivers. Providers must navigate a dual-agency process, securing physical plant licensure before or concurrently with Medicaid HCBS certification.

Before an application is even accepted, prospective providers must submit a formal Letter of Intent (LOI) to CDPHE and receive an invitation to apply through the Colorado Health Facilities Interactive (COHFI) portal. Medicaid enrollment through HCPF's Provider Web Portal cannot be finalized until the CDPHE ACF certification is complete and the provider has completed the mandatory HCBS Provider Training Course via the Train Learning Management System.

1. Service Definition and Scope

In Colorado, the baseline licensure for this service is an Assisted Living Residence (ALR), defined as a residential facility for three or more unrelated adults providing room, board, personal services, and 24-hour protective oversight. To bill Medicaid for HCBS waiver services, the ALR must obtain an additional certification as an Alternative Care Facility (ACF).

ACFs provide personal care, homemaker services, and 24-hour oversight to Medicaid members enrolled in specific waivers. Room and board costs are not covered by Medicaid and must be paid by the resident, typically using Supplemental Security Income (SSI) or other personal funds.

2. Regulatory and Oversight Agencies

Two primary state departments govern ALRs and ACFs in Colorado. CDPHE handles the physical licensure, life safety inspections, and issues the Medicaid ACF certification recommendation. HCPF manages the Medicaid waiver programs, sets reimbursement rates, and handles final provider enrollment.

Providers must interact with both agencies' distinct portals: CDPHE's COHFI system for licensing and HCPF's Provider Web Portal for Medicaid billing and enrollment.

3. Gatekeeping Prerequisites: Who Can Even Apply

Colorado strictly controls the intake of new health facility applications. A prospective ALR/ACF cannot simply create an account and submit an application; they must first submit a Letter of Intent (LOI) to CDPHE. Only after CDPHE reviews the LOI will the state open an application window in the COHFI portal.

Additionally, to enroll as a Medicaid ACF, the entity must already possess or be concurrently applying for the ALR license. Medicaid enrollment requires a distinct National Provider Identifier (NPI) and an Employer Identification Number (EIN) specific to the facility location.

4. Licensure and Certification Requirements

ALRs are governed by the Code of Colorado Regulations, specifically 6 CCR 1011-1 Chapter 7. Facilities must pass a life safety code inspection, a health survey, and demonstrate compliance with physical plant requirements, including square footage per resident and accessibility standards.

To achieve ACF certification, the facility must meet additional Medicaid-specific standards outlined in HCPF Volume 8 regulations. Facilities with 35 percent or more of their licensed beds occupied by Medicaid enrollees for at least 9 months in a fiscal year are eligible for reduced licensing fees.

5. Medicaid Provider Enrollment

Once CDPHE recommends ACF certification, the provider must enroll through the HCPF Provider Web Portal. The fiscal agent processes new applications, revalidations, and updates within an average of eight business days.

Providers must submit one application for the HCBS provider type that includes the ACF specialty. A separate application is not needed for each waiver (e.g., EBD, CMHS), but separate applications are required for each physical location.

6. Staffing, Training and Background Checks

ALRs must employ an administrator who meets CDPHE qualifications, including specific training and experience requirements. Direct care staff must receive training on resident rights, emergency procedures, and the specific needs of the population served.

Because ACFs are subject to high-risk Medicaid screening, all owners with a 5% or greater interest must undergo fingerprint-based criminal background checks. Staff administering medications must be certified as Qualified Medication Administration Personnel (QMAP).

7. Documentation, Policies and Records

During both the CDPHE licensure phase and the HCPF enrollment phase, providers must submit extensive documentation. This includes proof of corporate standing, IRS tax verification, and comprehensive facility policies.

Medicaid enrollment specifically requires financial and tax documentation to establish the billing entity. All policies must align with HCBS Settings Final Rule requirements, ensuring resident autonomy, privacy, and community integration.

8. Billing, Rates and Claims

ACFs bill HCPF for the daily waiver service rate, which covers personal care and protective oversight. This rate is established by HCPF and published in the provider fee schedule.

Medicaid does not pay for room and board in an ACF. The facility must execute a separate resident agreement detailing the room and board charges, which the resident pays directly, often utilizing their SSI benefits.

9. Approval Sequence and Timeline

The end-to-end process for opening a Medicaid-certified ACF in Colorado is lengthy. It begins with the LOI to CDPHE, followed by the submission of the ALR license application and architectural plans if applicable.

After passing CDPHE surveys, the facility receives its ALR license and ACF certification recommendation. Only then can the provider submit the Medicaid enrollment application to HCPF, which takes an additional 8 days to process once all documents are verified.

10. Common Denials and Survey Findings

Applications are frequently delayed or denied at the CDPHE level due to incomplete LOIs, failure to submit required architectural plans, or life safety code violations discovered during the initial survey.

At the HCPF enrollment stage, common delays include mismatched addresses between the IRS documentation, W-9, and the application, or failure of owners to complete the required fingerprint background checks within the allotted timeframe.

11. Key Contacts and Resources

Providers must maintain contact with both CDPHE for ongoing licensure and survey compliance, and HCPF for billing, rates, and waiver policy updates.

Utilize the official state portals for all application and enrollment activities, and refer to the published guidance documents for step-by-step instructions.

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