Criteria for Nursing Home Placement: How it Affects Admissions

Deciding if someone qualifies for nursing home care isn’t always straightforward — and if you’re in the middle of managing referrals, you already know that. It’s not just about a list of medical conditions. There are specific processes and criteria for nursing home placement that guide these decisions, and understanding them makes your job smoother and faster.

We’re here to help you decode that. In this article, we’ll cover: 

• What qualifies a person for a nursing home

• Key medical and functional placement criteria

• The steps involved in the admission and approval process

What does nursing home placement involve?

Let’s start with the basics — who is nursing home care actually for? You’re not just looking at someone who needs a little help around the house. Nursing homes are for people who need hands-on, round-the-clock care.

These are individuals with medical needs and daily care requirements that go beyond what home health providers or family caregivers can reasonably handle. It’s also easy to see how nursing homes and assisted living get mixed up, but they’re not the same.

Assisted living supports people who still manage some independence but need help with meals, medications, or basic tasks.

Nursing homes, on the other hand, are for residents who need continuous medical attention, nursing support, and sometimes rehabilitation therapies.

There’s another important factor to consider: short-term vs. long-term placement:

• Short-term placements usually happen after a hospital stay. These patients might be recovering from surgery, illness, or injury and need skilled care before heading home or to a less intensive setting.
  
  

• Long-term placements are for people with chronic health issues or ongoing conditions that require extended, daily nursing support.

Knowing the difference helps you sort through referrals faster, make informed decisions, and have clearer conversations with hospitals and families about what’s needed.

Common reasons for nursing home admission

If you’ve reviewed enough referrals, you’ll know there’s rarely a one-size-fits-all reason someone needs nursing home care. Still, there are patterns — and spotting them quickly helps you make faster, clearer decisions.

Decline in functional independence

One of the clearest signs is when daily life itself becomes difficult. Think about someone struggling with basics like dressing, bathing, moving safely around the house, or even eating regularly.

When someone’s ability to manage these daily tasks slips past what in-home support can reasonably cover, nursing home care steps in to fill the gap.

Need for 24/7 skilled nursing or rehabilitation

Some residents come in not just because they need help, but because they need constant, professional-level care. Wound care, IV medications, complex monitoring — these aren’t things that home health can safely provide around the clock. Nursing homes offer that full-time clinical oversight that keeps patients stable and supports recovery.

Post-hospital recovery that exceeds home care capacity

Hospitals move quickly to discharge, and sometimes patients are still too medically fragile to go straight home. Home health might cover part of the need, but when recovery requires daily therapy, frequent nursing assessments, or specialized equipment, nursing home placement becomes the next step.

Safety concerns for the individual living alone

Safety is a big driver here. If someone is living alone and at risk of falls, medication mismanagement, or simply being unable to call for help in an emergency, nursing home placement provides the secure environment they need.

It’s not only about treating conditions — it’s about preventing accidents and worsening health risks.

Where else might patients go?

Not every patient fits nursing home criteria. Some move to:

• Skilled Nursing Facilities (SNFs): For short-term rehab and recovery.

• Outpatient rehabilitation: When they’re stable enough to attend scheduled therapies.

• Home health services: For less intensive clinical support at home.

• Assisted living: When they need help with daily activities, but not 24/7 medical care.

Having this full picture helps you assess referrals more accurately and have better conversations with hospitals and families about the best next step.

Can a nursing home deny admission?

Yes — and in fact, making the right call about admissions protects both your facility and the residents you care for.

If a patient’s needs exceed your facility’s capabilities, or if they present high clinical or financial risks, you’re within your rights to deny admission. What matters is that your decision is based on clear, clinical, and operational grounds — not arbitrary reasons.

This is exactly where a tool like ExaCare can make your process stronger and faster. When you’re juggling multiple referrals and facing tight response windows, ExaCare’s AI-powered screening gives you instant clarity.

It reads through referral packets in minutes, pulls out critical clinical and financial details, and flags anything that could be a concern — like high-cost medications or complex care needs.

With ExaCare, you get:

• Immediate insights into whether your facility can meet a patient’s needs

• Clear reimbursement estimates to avoid surprises down the line

• Faster, more confident decisions that help you maintain good hospital relationships

Making the right call quickly builds trust with your hospital partners and shows them you’re prepared to take on the right patients for your facility.

Medical and functional criteria for nursing home placement

When you’re evaluating a referral, the first thing to look at is medical and functional need. Hospitals will often flag these, but it helps to know exactly what matters:

• ADL impairments: If someone struggles with core activities of daily living — dressing, bathing, eating, toileting, moving safely — they likely meet the need for nursing home care. The more assistance they need, the clearer the case becomes.
  
  

• Cognitive or behavioral health needs: Patients with dementia, severe confusion, or behavioral health challenges often need structured, supervised environments to keep them safe and well cared for.
  
  

• Medical complexity: Residents with chronic illnesses, ongoing treatments, or medical devices (like feeding tubes or wound vacs) require nursing oversight that home settings can’t manage reliably.
  
  

• Physician recommendation or hospital referral: Clinical endorsements matter. If a doctor or hospital discharge planner recommends placement, that’s a strong indicator of eligibility.
  
  

• Risk of readmission: Patients with unstable conditions or poor support systems at home may face high hospital readmission risk — another marker for nursing home placement.
  
  

• Rehabilitation potential: If recovery requires daily rehab services that go beyond outpatient capabilities, nursing homes play a key role in bridging that gap.

These criteria help you move quickly from reading referral packets to making a well-informed admission decision.

Financial and insurance-based eligibility

Clinical need is just one side of the equation. Financial fit is just as critical — both for your facility’s sustainability and the patient’s access to care.

Consider these factors:

• Medicare vs. Medicaid: Medicare may cover short-term skilled nursing care following a qualifying hospital stay, but it’s time-limited. Medicaid steps in for long-term care if the patient meets financial eligibility criteria.
  
  

• Private pay and long-term care insurance: Some residents rely on private funds or long-term care policies. Reviewing these early helps avoid surprises and smooths the admissions process.
  
  

• Financial assessments and Medicaid eligibility: It’s important to confirm whether the patient qualifies for Medicaid or is in the process of applying. Look at income, assets, and any spend-down strategies in play. Accurate assessments upfront save you time and reduce claim issues later.

With tools like ExaCare, this part of the process becomes a lot faster. The platform pulls key financial details directly from referral documents and flags any potential risks — like uncovered high-cost medications or gaps in coverage — so you have a full picture before making the call.

State-Level “Nursing Facility Level of Care” (NFLOC)

Even though the basics of nursing home care are the same nationwide, every state sets its own standards for what counts as nursing facility level of care. If you’re managing referrals across state lines, keeping track of these differences can make all the difference.

At its core, NFLOC defines the medical and functional needs a person must have to qualify for Medicaid-funded nursing home care. Some states focus heavily on ADL limitations, while others give more weight to cognitive impairment or medical complexity.

You’ll also come across required clinical assessments like:

• PASRR (Preadmission Screening and Resident Review): Federal law requires this for anyone entering a Medicaid-certified nursing facility. It checks for serious mental illness or intellectual disabilities to ensure the setting is appropriate.
  
  

• State-specific health assessments: Some states require additional evaluations before approving Medicaid payments for nursing home stays.

A few examples:

• California uses a detailed Level of Care Determination, combining functional scores and medical needs.
  
  

• Texas requires a Medical Necessity Determination (MND) alongside the PASRR.
  
  

• New York looks closely at cognitive decline, health instability, and ADL scores when determining eligibility.

Keeping an eye on state-specific updates matters. For example, some states are tightening NFLOC definitions to control Medicaid costs — something to monitor if you’re operating in multiple regions.

If you’re reviewing referrals daily, ExaCare can help surface these criteria fast, pulling relevant state-specific data right from the packet so you’re not wasting time digging through documents.

Nursing home admission requirements

Paperwork might not be the most exciting part of the process, but missing even one document can delay an admission. Here’s an admission checklist to keep things moving smoothly:

• You’ll need physician orders that formally confirm the patient requires nursing home care.
  
  

• Make sure to include an up-to-date medication list and care plan that outlines all current treatments.
  
  

• Provide insurance documents and identification to verify both coverage and the patient’s identity.
  
  

• If applicable, include legal documents such as Power of Attorney (POA), DNR orders, and guardianship papers to confirm decision-making authority and care preferences.
  
  

• The hospital discharge summary is essential, as it gives a clear picture of the patient’s recent medical history.
  
  

• Confirm that all required clinical assessments, like the PASRR, have been completed before moving forward with admission.

With ExaCare, you don’t have to chase down each piece manually. The system automatically scans referral packets for missing or incomplete documents, so you spot gaps before they become roadblocks. This not only speeds up admissions but also helps you stay organized under pressure.

Frequently asked questions

Does Medicare pay for nursing home placement?

Medicare covers short-term skilled nursing care, but only under specific conditions. To qualify, the patient must have a qualifying hospital stay (at least three inpatient days), and the care needed must be for rehabilitation or skilled nursing — not just custodial care.

Medicare typically covers up to 100 days per benefit period, with full coverage for the first 20 days and partial coverage after that. For long-term, ongoing stays, Medicare won’t cover the cost — that’s where Medicaid or private pay comes in.

How many ADLs must someone need help with?

There’s no universal number, but most states and facilities look for help needed with at least two or more Activities of Daily Living (ADLs) to meet nursing home criteria. Common ADLs include bathing, dressing, eating, toileting, transferring (like moving from bed to chair), and continence.

The more ADLs a person struggles with, the stronger the case for placement. Always check state guidelines, as they can vary slightly.

Who decides if someone should go to a nursing home?

It’s a combination of healthcare providers and facility decision-makers. Typically, a hospital discharge planner or physician recommends nursing home care based on the patient’s needs. Then, as the facility, you review the referral to confirm if the patient meets both medical and financial criteria.

Tools like ExaCare can make this review faster by pulling out the key clinical and financial details from referral packets, helping you make an informed call.

What is the average wait time for nursing home placement?

The average wait time for nursing home placement depends on several factors — your facility’s census, the patient’s documentation readiness, and whether they meet the clinical and financial requirements. In general, if all documents are in order, placements can happen within a few days.

Simplify referrals for nursing home placement with ExaCare

Getting through the criteria for nursing home placement is complex, but the right tools can make it far less stressful. Throughout this article, we’ve looked at what qualifies someone for care, the documents you need to process, and how to spot the clinical and financial criteria that matter.

The next step is making sure your admissions process moves just as smoothly — and that’s exactly where ExaCare comes in.

ExaCare is built to take the guesswork and delays out of referral management. Instead of spending valuable time digging through referral packets or chasing down missing details, ExaCare helps you make faster, clearer decisions with everything you need at your fingertips.

Here’s how ExaCare supports your team:

• Faster admissions decisions: ExaCare reviews referral documents in minutes, giving you instant clarity on whether a patient is a good fit for your facility.
  
  

• Accurate clinical and financial assessments: The platform pulls out medication costs, diagnoses, and reimbursement estimates automatically, helping you avoid surprises later.
  
  

• Streamlined referral management: All patient documents and insurance details are consolidated in one place, so you don’t have to juggle multiple systems.
  
  

• Improved patient selection: Potential risks (clinical or financial) are flagged upfront, helping you focus on the right patients for your facility.

Ready to see how ExaCare can help your facility win more referrals?

Schedule a demo.