Vermont - Residential Care Service — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-10

Vermont funds 24-hour residential support through the 1115 Choices for Care Waiver under the Enhanced Residential Care (ERC) service tier, requiring facilities to hold an active Level III Residential Care Home (RCH) or Assisted Living Residence (ALR) license from the Division of Licensing and Protection (DLP). Providers deliver room, board, personal care, and nursing overview to individuals assessed at the highest, high, or moderate needs groups.

Securing Medicaid reimbursement requires a sequential three-step approval process where DLP licensure must be fully granted before the Adult Services Division (ASD) will accept a Choices for Care provider enrollment application. Only after ASD issues programmatic approval can the entity submit a formal Medicaid enrollment application through the Provider Management Module operated by Gainwell Technologies.

1. Service Definition and Scope

In Vermont, 24-hour residential care under Medicaid is delivered primarily as Enhanced Residential Care (ERC) through the Choices for Care 1115 Waiver. This service bundles personal care, nursing overview, medication management, and supervision into a daily rate for individuals residing in licensed Level III RCHs or ALRs.

Room and board costs are explicitly excluded from Medicaid reimbursement and must be covered by the resident's income, subject to a state-mandated personal needs allowance (PNA).

• Service Name: Enhanced Residential Care (ERC) under the Choices for Care Waiver
• Licensure Requirement: Level III Residential Care Home or Assisted Living Residence
• Included Services: Personal care, 24-hour supervision, medication administration, and nursing overview
• Excluded Costs: Room and board are paid privately by the resident
• Target Population: Adults meeting the highest, high, or moderate needs clinical criteria under the Choices for Care assessment

2. Regulatory and Oversight Agencies

Authority over residential care is split between the Department of Disabilities, Aging, and Independent Living (DAIL) and the Department of Vermont Health Access (DVHA). DAIL handles both physical licensure and waiver programmatic approval, while DVHA manages the financial and claims infrastructure.

• Division of Licensing and Protection (DLP): Issues RCH and ALR licenses and conducts physical site surveys (https://dlp.vermont.gov)
• Adult Services Division (ASD): Approves Choices for Care provider enrollment applications prior to Medicaid enrollment (https://asd.vermont.gov)
• Department of Vermont Health Access (DVHA): Oversees the broader Medicaid program and MMIS operations (https://dvha.vermont.gov)
• Gainwell Technologies: Operates the Vermont Medicaid Provider Management Module for final enrollment and claims (https://vermont.hppcloud.com/ProviderEnrollment/EnrollmentCreate)
• Vermont Medicaid Portal: Hosts billing manuals, fee schedules, and provider advisories (https://www.vtmedicaid.com)

3. Gatekeeping Prerequisites: Who Can Even Apply

Vermont strictly sequences residential care approvals, prohibiting concurrent applications for licensure and Medicaid enrollment. An applicant cannot submit a Choices for Care provider enrollment application to ASD without first holding an active, unencumbered Level III RCH or ALR license from DLP.

There is no Certificate of Need (CON) required for Residential Care Homes in Vermont, nor are there closed network moratoria for ERC providers, but the facility must be physically ready and surveyed before the Medicaid pathway opens.

• Licensure Prerequisite: Active Level III RCH or ALR license from DLP is required before ASD accepts a waiver enrollment application
• Certificate of Need: Not required for Level III Residential Care Homes in Vermont
• Waiver Capacity: Choices for Care operates without a waitlist for the highest and high needs groups, meaning open enrollment for qualified providers
• Physical Plant Readiness: The facility must pass a DLP physical site and fire safety inspection before a license is issued
• Medicaid Acceptance Mandate: Licensed ALRs and RCHs participating in Medicaid must agree to accept the Medicaid rate and room/board rate as payment in full

4. Licensure and Certification Requirements

The Division of Licensing and Protection (DLP) enforces the newly adopted (December 2024) Residential Care Home and Assisted Living Residence Licensing Regulations. Level III homes are distinguished from Level IV homes by the requirement to provide nursing overview.

Applicants must submit architectural plans, life safety code approvals, and comprehensive policy manuals to DLP. Special Care Units (SCUs), such as memory care wings, require a distinct approval process and specialized staffing plans.

• License Categories: Level III RCH (includes nursing overview) or Assisted Living Residence (ALR)
• Regulatory Framework: Residential Care Home and Assisted Living Residence Licensing Regulations (Adopted Dec 2024)
• Special Care Units (SCU): Require separate DLP approval detailing specialized services, staffing, and physical environment
• Uniform Consumer Disclosure: Facilities must complete a state-provided form detailing services, tiers, rates, and accepted public benefits prior to admission
• Life Safety: Facilities must obtain clearance from the Vermont Division of Fire Safety prior to DLP licensure

5. Medicaid Provider Enrollment

Enrolling as an ERC provider requires a two-stage process. First, the provider submits the fillable Choices for Care Provider Enrollment application directly to ASD via email ([email protected]).

Once ASD issues programmatic approval, the provider completes the formal Medicaid enrollment through the Provider Management Module (PMM) operated by Gainwell Technologies, submitting their NPI, taxonomy, and DLP license.

• Stage 1 Application: Choices for Care Provider Enrollment Application submitted to ASD
• Stage 2 Application: Online submission via the Vermont Provider Management Module (PMM)
• Required Identifiers: National Provider Identifier (NPI) and Employer Identification Number (EIN)
• Taxonomy Code: Must align with Assisted Living Facility (311ZA0620X) or Residential Care Facility
• Application Fee: Subject to the CMS institutional provider application fee unless waived by prior Medicare enrollment

6. Staffing, Training and Background Checks

Vermont requires RCHs to maintain sufficient staff to meet the assessed needs of all residents 24 hours a day. Level III homes must have a licensed nurse (RN or LPN) available to provide nursing overview and delegate medication administration.

All employees must undergo rigorous background screening before having direct contact with residents. Facilities must query state registries and maintain documentation of these checks in personnel files.

• Nursing Overview: Level III homes must employ or contract with a licensed nurse to oversee care plans and medication delegation
• Background Checks: Providers must check the DLP Adult Abuse Registry and the Vermont criminal conviction records
• Direct Care Staffing: Must be awake and on-site 24/7; ratios are dictated by resident acuity rather than a strict state-mandated numerical ratio
• Administrator Qualifications: Must be at least 21 years old and demonstrate knowledge of RCH regulations and resident populations
• Training Requirements: Staff must receive orientation on resident rights, abuse reporting, fire safety, and infection control before providing independent care

7. Documentation, Policies and Records

DLP surveyors and ASD quality monitors require extensive documentation to verify compliance with both licensing rules and the HCBS Settings Rule. Facilities must maintain individualized care plans that reflect resident choice, community integration, and privacy.

Admission agreements must explicitly state the Medicaid services provided, the room and board rate, the personal needs allowance (PNA), and the provider's agreement to accept Medicaid as sole payment for covered services.

• Admission Agreements: Must detail Medicaid acceptance, room and board rates, and PNA amounts
• Care Plans: Must be updated annually or upon a significant change in the resident's condition, incorporating nursing overview assessments
• HCBS Settings Rule Compliance: Policies must guarantee resident rights to lockable doors, choice of roommates, and access to food at any time
• Incident Reporting: Critical incidents (abuse, neglect, elopement) must be reported to DLP Adult Protective Services (APS) within mandated timeframes
• Uniform Consumer Disclosure: Must be provided to residents prior to admission and prominently featured in marketing materials

8. Billing, Rates and Claims

Enhanced Residential Care (ERC) is reimbursed through a tiered daily rate system based on the resident's assessed level of need. Claims are submitted to the Vermont Medicaid MMIS via the Provider Management Module.

Providers cannot bill Medicaid for room and board. The resident pays the facility directly for room and board from their income, minus the state-mandated Personal Needs Allowance.

• Billing System: Claims are processed through the Gainwell Technologies MMIS portal
• Rate Structure: Tiered per diem rates based on the Choices for Care clinical assessment
• Room and Board: Billed directly to the resident; strictly excluded from Medicaid claims
• Personal Needs Allowance (PNA): Providers must ensure residents retain their state-defined PNA from their monthly income
• Maintenance Window: The MMIS system undergoes regular maintenance on Sundays from 1:00 AM to 5:00 AM ET, during which claims cannot be submitted

9. Approval Sequence and Timeline

The critical path to becoming a billing ERC provider is strictly linear. Facility construction and local fire safety approvals must precede the DLP licensure application and physical survey.

Only after the Level III RCH or ALR license is in hand can the provider submit the ASD Choices for Care application. The final step, Gainwell MMIS enrollment, cannot begin until ASD transmits its approval.

• Step 1: Obtain local zoning and Vermont Division of Fire Safety life safety code clearances
• Step 2: Submit licensure application to DLP and pass the initial physical site survey
• Step 3: Receive Level III RCH or ALR license from DLP
• Step 4: Submit the Choices for Care Provider Enrollment application to ASD via email
• Step 5: Complete the Medicaid enrollment application in the Gainwell Provider Management Module

10. Common Denials and Survey Findings

DLP Survey and Certification teams frequently cite facilities for medication administration errors and failure to maintain updated nursing overview assessments. Incomplete background checks prior to a new hire's start date are another major source of citations.

On the enrollment side, ASD and Gainwell will reject applications if the provider attempts to enroll before the DLP license is fully active, or if the taxonomy codes and NPIs do not match the facility's legal entity name.

• Premature Enrollment: Applications submitted to ASD or Gainwell before the DLP license is issued are automatically rejected
• Medication Errors: Citations for improper delegation of medication administration by the licensed nurse to unlicensed staff
• Background Check Gaps: Failure to query the DLP Abuse Registry before an employee's first day of direct contact
• Care Plan Deficiencies: Nursing overview assessments that do not accurately reflect a resident's current decline in condition
• HCBS Settings Violations: Restricting resident access to food or visitors without a documented, individualized clinical justification

11. Key Contacts and Resources

Providers should bookmark the primary regulatory portals for DAIL and DVHA to monitor policy updates, rate changes, and licensing rule revisions.

• Division of Licensing and Protection (DLP): https://dlp.vermont.gov
• Adult Services Division (ASD) Provider Enrollment: https://asd.vermont.gov/resources/provider-enrollment
• Vermont Medicaid Portal: https://www.vtmedicaid.com
• Provider Management Module (Gainwell): https://vermont.hppcloud.com/ProviderEnrollment/EnrollmentCreate
• ASD Enrollment Email: [email protected]

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