New Option Lets Some Pennsylvanians Get Nursing Home Level Care in Assisted Living Facilities
On March 11, 2026, the Office of Long-Term Living (OLTL) presented an update on one of its newest initiatives: the In Lieu of Service (ILOS) option. ILOS allows certain Pennsylvanians who qualify for nursing home care to receive that care in an assisted living residence (ALR) instead—a more home-like setting that can offer greater independence and quality of life.
This article explains what participants, advocates, and providers should know about ILOS and where the program stands today.
What Is ILOS?
ILOS is an option—not a standalone program—available through Pennsylvania’s Community HealthChoices (CHC) managed care program. Under ILOS, a CHC managed care organization (MCO) can arrange for a participant who has been determined to need nursing-home-level care to receive long-term services and supports in an approved assisted living residence instead of a nursing facility.
Importantly, ILOS is not something individuals apply for directly. It is offered through the CHC MCOs, which contract with specific ALRs to provide this option. The MCO assesses each person’s needs and determines whether ILOS is appropriate.
Background: How ILOS Was Developed
OLTL issued an operations memo in November 2023 laying the groundwork for the ILOS option. Language was then added to the 2024 CHC agreement, and MCOs began submitting proposals. On January 7, 2026, the Office of Income Maintenance (OIM) published a new chapter in the Long-Term Care Handbook—Chapter 490—providing County Assistance Office (CAO) eligibility workers with guidance on processing ILOS cases.
All three CHC MCOs are now participating in ILOS:
- UPMC – offering ILOS since January 1, 2024
- PA Health & Wellness (PHW) – offering ILOS since January 1, 2025
- AmeriHealth Caritas / Keystone First – offering ILOS since January 1, 2026
Early Results
OLTL reported that in calendar year 2025, the first full year of ILOS tracking, a total of 15 CHC participants used the ILOS option:
- 7 participants transitioned from a nursing facility to an ALR
- 8 participants at risk of nursing facility placement were moved to an ALR instead
The program is expected to grow as more ALRs contract with the MCOs and awareness increases among participants and providers. A full list of approved ILOS Assisted Living Residences (ALRs) by county is available in Appendix A, LTC Handbook Chapter 490.
What This Means for Participants
ILOS is a promising development for Pennsylvanians who need nursing home level care but may be able to live safely in a less restrictive, more home-like environment. Assisted living can offer more autonomy and a greater sense of community compared to a nursing facility.
Beyond its immediate impact, ILOS could serve as a platform for a larger shift in how Pennsylvania delivers home and community-based services. As the state works to implement federal community settings standards, ILOS may help lay the groundwork for recognizing assisted living residences as acceptable settings where other waiver services—not just nursing-home-level care—can be delivered.
This would represent a significant departure from Pennsylvania’s current approach. Right now, PA does not include assisted living in its HCBS waiver programs. But the state would not be breaking new ground: at least 23 other states already include assisted living as a setting in their HCBS waivers.
Have questions about ILOS? Here's who to contact:
Contact your CHC managed care plan directly to ask about the ILOS option and whether it may be right for you or someone you're helping.
You must enroll in Community HealthChoices before you can access ILOS. The Independent Enrollment Broker (IEB) can help you get started.
Assisted living providers who want to participate in the ILOS option can contact OLTL's provider enrollment unit.
