At the RISBDC, we regularly get inquiries from clients who want to open an adult day care business. And as Baby Boomers age into the demographic this business serves, the need will continue to grow. But we’ve learned from many conversations that this is a complex type of business to open, and is subject to a significant number of regulations.

This blog post is designed to help our clients understand the scope of the hoops they will face, so that they can be prepared to hop, skip, and jump through them to grand opening — or to decide they are best suited for a different venture before spending significant resources going down this path.

We spoke with Nancy Scarduzio, the small business ombudsman with the Rhode Island Department of Administration, whose role it is to help businesses navigate through various state permitting and licensing processes. She reiterated the importance of understanding the requirements before charging in. Before you get started on your adult day care business, carefully read through this overview of the details, tasks, and elements involved.

Provider Certification Standards

The Executive Office of Health & Human Services (EOHHS) for RI has a comprehensive outline of certification standards for all adult day care businesses in the state. This is required reading for anyone hoping to open this type of business, and is a great place to start so that you can see the depth and breadth of qualifications and services that are integral to this line of business. Each adult day care must remain open for a minimum of eight hours each day, and provide a broad scope of services to clients who need them, including:

• Nursing services
• Therapeutic services and activities
• Assistance with activities of daily living (ADLs)
• Food services, with menus developed by a nutritionist or registered dietician
• Case management

The standards also call for a significant level of assessment and ongoing documentation to ensure each client’s needs are thoroughly identified and being met consistently.

Physical space

There are three major players with an interest in the details of your building and physical location: your local municipality, the State Fire Marshal, and the state health department. These approvals interweave somewhat.

Within your city or town, a building must be properly zoned for use as an adult day care facility. If it’s not originally zoned correctly, you may need to apply for a variance. You’ll also need to obtain any needed licenses and permits for your area. As with any business, if you’re doing any renovations on the building, you’ll need to obtain the appropriate permits in advance and have all construction inspected and approved for a valid Certificate of Occupancy. You’ll also need to ensure that your building has zoning approval for any renovations.

The State Fire Marshal must approve facility plans and conduct an on-site inspection and approve the facility for adult day care fire code regulations.

Before you purchase or lease a building or undertake any renovations for a property you own, it’s critical that you read the Adult Day Care Program regulations for building requirements, i.e.: a quiet room, a secured nursing office, and more.

When the building is ready, the health department will also require a copy of all applicable licenses, permits, and certificates to ensure compliance.

RIDOH Licensing application

When submitting your RI Department of Health (RIDOH) licensing application, significant additional documentation is required, including (but not limited to):

• Mission statement including program philosophy and objective
• Acknowledgement of contracts and agreements with other agencies, for services required in the Provider Certification Standards
• Description of the target population and anticipated capacity
• Schedule of days and hours, anticipated closure dates, and a plan for unexpected closures
• Certificate of Occupancy (see above)
• A list of basic services offered
• RIDOH, Center for Food Protection, Food service license
• Staffing plan

You’ll also need to name the program’s director on the application, and have your ownership entity (sole proprietorship, LLC, corporation, etc.) designated and all tax identification numbers ready. Make sure to read through applicable rules & regulations, and the licensing application well in advance for a full view of information and attachments required.

Medicaid reimbursement through EOHHS

For approval to accept Medicaid reimbursement, you must meet all guidelines and successfully complete the application process with EOHHS. Guidelines include licensure and annual recertification by the health department, provision of Medicaid services at an identical rate as that charged to the general public, and adherence to a written, established plan of care. The EOHHS website provides guidance regarding documentation required and services covered in their Medicaid reimbursement coverage guidelines. For specific questions and guidelines related to this process, contact Linnea Tuttle, Chief of Health Systems Development at the Executive Office of Health & Human Services (EOHHS) at (401) 462-6278.

Additional adult day care regulations

Similar to some other businesses in the state, an adult day care business — by state statute — is required to obtain a criminal background check on all employees. Finding employees may be a challenge, due to the low employment rate. Additionally, regardless of your food service plan, a certified food safety manager who is licensed by the Department of Health, Center of Food Protection, is required.

Common business requirements for employers

In addition to the many requirements specific to an adult day care, don’t forget that if you will be hiring employees, your business will also be subject to typical state and federal requirements including:

• Completing a Business Application and Registration (BAR) form to register with the Division of Taxation
• Payment of income tax, unemployment insurance, and social security taxes for employees, and completion of W-2 withholding forms
• Rhode Island new hire reporting form to register new employees with the state
• Completion of I-9 forms to establish that employees are allowed to work in the U.S.
• Worker’s compensation insurance, which can be obtained from private insurers

Ready to roll?

If you’ve read through these requirements and you’re confident you can meet them as you work through the regulatory steps, the health department has a link to a great resource to walk you through opening an adult day care. When you’re ready, click on the “Start Your Adult Day Care Business” link in the middle of the page. This will take you to the RI Secretary of State’s Business Assistant webpage.

A business plan will be your greatest asset at this point, and the RISBDC is a great resource for this step when you’re prepared to get started. And if you decide this business isn’t for you, join us for a Right Foot workshop when you have your next idea!