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

Last reviewed: 2026-09-10

Minnesota Statutes Chapter 144G requires any establishment providing sleeping accommodations and assisted living services to one or more adults to hold an Assisted Living Facility (ALF) or Assisted Living Facility with Dementia Care (ALFDC) license issued by the Minnesota Department of Health (MDH). For Medicaid reimbursement, the state does not enroll facilities under an "assisted living" service code; instead, licensed facilities enroll with the Minnesota Department of Human Services (DHS) to provide "Customized Living" or "24-Hour Customized Living" services under the Elderly Waiver (EW), Brain Injury (BI), or Community Access for Disability Inclusion (CADI) waivers.

New applicants must first secure a provisional license and pass an MDH initial survey within one year of admitting residents to achieve full licensure. Facilities proposing to serve six or fewer residents face a mandatory pre-licensure review by DHS under Minnesota Statutes § 245A.042 to verify the location does not adjoin another licensed residential setting.

1. Service Definition and Scope

In Minnesota, an Assisted Living Facility is a licensed establishment that provides sleeping accommodations and assisted living services to one or more adults. Services include assistance with activities of daily living (ADLs), health-related services, and medication management.

Medicaid does not pay for room and board in these settings. Instead, the Medical Assistance (Medicaid) program funds the service component through Customized Living or 24-Hour Customized Living waiver services, while residents pay for room and board privately or through the state's Housing Support program.

• Statutory Definition: Minnesota Statutes § 144G.08 defines assisted living as a licensed facility providing sleeping accommodations and services to one or more adults.
• Medicaid Service Name: Customized Living and 24-Hour Customized Living under the EW, BI, and CADI waivers.
• License Tiers: Assisted Living Facility (ALF) and Assisted Living Facility with Dementia Care (ALFDC).
• Excluded Settings: Hospitals, nursing homes, and adult foster care homes are explicitly excluded from 144G licensure.

2. Regulatory and Oversight Agencies

The Minnesota Department of Health (MDH) is the primary regulatory body responsible for licensing, engineering reviews, and conducting compliance surveys for all assisted living facilities.

The Minnesota Department of Human Services (DHS) manages Medicaid provider enrollment, waiver administration, and background studies. The Board of Executives for Long Term Services and Supports (BELTSS) licenses the facility directors.

• Licensing Authority: Minnesota Department of Health (MDH) Health Regulation Division (https://www.health.state.mn.us/facilities/regulation/assistedliving/index.html)
• Medicaid Authority: Minnesota Department of Human Services (DHS) Aging and Adult Services Division (https://mn.gov/dhs/)
• Director Licensing: Board of Executives for Long Term Services and Supports (BELTSS) (https://mn.gov/boards/beltss/)
• Background Studies: DHS NETStudy 2.0 (https://mn.gov/dhs/general-public/background-studies/)

3. Gatekeeping Prerequisites: Who Can Even Apply

Minnesota imposes strict structural preconditions before MDH will accept or approve an assisted living application. Applicants cannot bypass the provisional phase or the required local and state reviews.

Small facilities face an additional statutory barrier regarding location, and all facilities must secure a licensed director before operating.

• Provisional Phase: All new applicants must apply for a provisional license and pass an initial MDH survey within one year of admitting residents (Minn. Stat. § 144G.09).
• Small Facility Co-Location Review: Facilities with 6 or fewer residents require DHS approval under Minn. Stat. § 245A.042 to ensure they do not adjoin another qualifying licensed setting.
• Director Licensure: The facility must employ a Licensed Assisted Living Director (LALD) approved by BELTSS prior to application.
• Local Jurisdiction Approval: Applicants must submit the local jurisdiction's land use plan or zoning approval demonstrating the facility is permitted at the proposed address.

4. Licensure and Certification Requirements

The MDH licensure process requires extensive documentation, including organizational charts, lease agreements, and a physical environment review by MDH Engineering Services.

Fees are calculated based on the license tier and the maximum resident capacity of the facility.

• Base Fee (ALF): $2,000 initial application fee plus $75 per resident capacity.
• Base Fee (ALFDC): $3,000 initial application fee plus $100 per resident capacity.
• Physical Environment Review: MDH Engineering Services must review building plans and conduct an inspection prior to provisional licensure.
• UDALSA Form: The Uniform Disclosure of Assisted Living Services and Amenities must be completed and submitted with the application.

5. Medicaid Provider Enrollment

To bill for Customized Living services, a licensed facility must enroll as a Minnesota Health Care Programs (MHCP) provider through the state's online portal.

Enrollment requires an active MDH license and payment of the federal institutional application fee.

• Enrollment Portal: Minnesota Provider Screening and Enrollment (MPSE) portal (https://mn.gov/dhs/partners-and-providers/policies-procedures/minnesota-health-care-programs/provider/enrollment/)
• Provider Type: Enrolls as an HCBS Waiver/AC provider with the Customized Living service specialty.
• Prerequisite: Must hold the active MDH Assisted Living Facility provisional or full license before Medicaid enrollment is approved.
• Application Fee: Subject to the federal Medicaid institutional application fee unless already enrolled in Medicare or paid to another state Medicaid agency.

6. Staffing, Training and Background Checks

Minnesota Statutes Chapter 144G mandates specific leadership and clinical oversight roles for all assisted living facilities.

All personnel with direct resident contact must clear state and federal background checks before beginning work.

• Assisted Living Director: Must have a BELTSS-licensed LALD in general administrative charge of the facility.
• Clinical Nurse Supervisor: Must designate a registered nurse (RN) to oversee clinical services and supervise unlicensed personnel.
• Background Studies: All owners, managerial officials, and direct care staff must clear DHS NETStudy 2.0 fingerprint-based background checks.
• Dementia Care Training: ALFDC staff require specific dementia care training hours before direct contact and annually thereafter.

7. Documentation, Policies and Records

Facilities must maintain comprehensive operational policies as dictated by Minnesota Statutes § 144G and Minnesota Rules Chapter 4659.

Resident rights and contractual obligations are heavily regulated, requiring specific disclosures and termination procedures.

• Assisted Living Resident Agreement: Must execute a compliant contract detailing services, fees, and termination rights (Minn. Stat. § 144G.50).
• Bill of Rights: Must provide and document receipt of the Assisted Living Bill of Rights (Minn. Stat. § 144G.91).
• Emergency Disaster Plan: Must maintain a facility-specific emergency preparedness plan aligned with MDH guidelines.
• Maltreatment Reporting Policy: Written protocols for reporting suspected abuse to the Minnesota Adult Abuse Reporting Center (MAARC).

8. Billing, Rates and Claims

Medicaid claims for Customized Living are submitted to the state's MMIS system, but rates are highly individualized.

DHS uses a specific tool to calculate the daily rate based on the resident's assessed needs.

• Billing System: Claims are submitted via the MN-ITS system to the Medicaid Management Information System (MMIS).
• Rate Methodology: Customized Living rates are calculated using the DHS Residential Services Tool (RS Tool) based on individual resident assessments.
• Room and Board: Medicaid does not pay room and board; residents use private funds or the Minnesota Housing Support program.
• Managed Care: For residents in Minnesota Senior Health Options (MSHO), providers must contract directly with the managed care organization (MCO) for payment.

9. Approval Sequence and Timeline

The path to full licensure and Medicaid enrollment is sequential. Applicants cannot admit residents until the provisional license is issued.

The transition from provisional to full licensure depends entirely on the timing and outcome of the initial MDH survey.

• Step 1: Obtain local zoning approval and secure a licensed LALD.
• Step 2: Submit Provisional License application and non-refundable fees to MDH.
• Step 3: MDH Engineering review and DHS co-location review (if 6 or fewer beds).
• Step 4: MDH issues Provisional License; facility may now admit residents.
• Step 5: MDH conducts initial survey within 1 year to issue full ALF/ALFDC license.
• Step 6: Enroll in MPSE for Medicaid Customized Living billing.

10. Common Denials and Survey Findings

MDH issues correction orders on form 2567 for deficiencies found during initial and routine surveys.

Applications are frequently delayed or denied due to incomplete documentation or physical environment failures.

• Physical Environment Deficiencies: Failure to meet National Fire Protection Association (NFPA) standards or MDH engineering requirements.
• Incomplete Applications: Missing IRS Form SS-4, local jurisdiction letters, or LALD credentials.
• Co-Location Rejections: DHS denying small facilities (6 or fewer beds) that violate the 245A.042 adjoining property rules.
• Food Code Violations: Failure to meet commercial kitchen standards unless qualifying for specific small-provider exemptions.

11. Key Contacts and Resources

Prospective providers should rely on the official MDH and DHS portals for the most current application materials and enrollment instructions.

Help desks are available for both licensure and Medicaid billing inquiries.

• MDH Assisted Living Licensure: [email protected] or 651-201-4200 (https://www.health.state.mn.us/facilities/regulation/assistedliving/index.html)
• DHS Provider Enrollment: MN-ITS Help Desk (https://mn.gov/dhs/partners-and-providers/policies-procedures/minnesota-health-care-programs/provider/enrollment/)
• BELTSS: Board of Executives for Long Term Services and Supports (https://mn.gov/boards/beltss/)
• Statute Reference: Minnesota Statutes Chapter 144G (https://www.revisor.mn.gov/statutes/cite/144G)

See all Minnesota services · Minnesota Medicaid consulting · book a consultation.