Adult Day Care Regulations by State

What an adult day center is

An adult day center provides supervised care, activities and support in a group setting during the day, while participants continue to live in the community. According to the National Adult Day Services Association (NADSA), typical services include planned activities, meals, help with personal care and transportation. NADSA describes three models:

• Social: meals, recreation and some health-related services.
• Medical or health (often called adult day health care): social activities plus more intensive health and therapeutic services.
• Specialized: serves specific groups, such as people with diagnosed dementias or developmental disabilities.

Most centers mix social and health services. In the 2025 national survey of centers by the CDC's National Center for Health Statistics (NCHS), just 17.2% of centers said their services were designed for social and recreational needs alone. Of participants, 30.7% were under 65 and 28.4% had Alzheimer disease or another dementia.

Unlike home care, adult day happens outside the home, though it can supplement home care. Unlike assisted living, it is not residential. PACE (Programs of All-Inclusive Care for the Elderly) is a separate program that provides comprehensive medical and social services to people 55 and older who need a nursing home level of care.

How to open an adult day center: step by step

Requirements vary by state, so use these steps alongside your state guide above.

1. Assess local demand and referral sources. Study local demographics, visit existing centers and talk with your Area Agency on Aging, hospital discharge planners, physicians, Medicaid case managers and VA social workers.
2. Choose your service model. Your model shapes staffing, building, licensing and payers.
3. Check your state's licensing or certification rules. You may need a license, a certification, Medicaid provider approval or several of these. Call the state agency and any state adult day association.
4. Plan funding and payer mix. Project revenue by payer and fund several months of payroll. Budget on attendance, not enrollment: in 2025, average daily attendance nationally was about 157,500, compared with about 227,200 people enrolled.
5. Find and prepare a building that meets code. Confirm zoning, building, fire and health rules before you sign a lease, since daily capacity is usually set by regulation or fire code. If you plan to serve Medicaid home and community-based services (HCBS) participants, note that federal rules presume a setting has institutional qualities if it is in a building that also provides inpatient institutional treatment, or on the grounds of or next to a public institution.
6. Write policies and procedures. Cover admission and discharge, care plans, medications, infection control, emergencies, incidents and participant rights.
7. Hire and train staff. Meet your state's rules on staffing ratios, qualifications, background checks and training.
8. Enroll as a Medicaid and VA provider where eligible. Apply through your state Medicaid agency and any managed care plans. The VA delivers most community care through its Community Care Network, with Veteran Care Agreements in limited situations, so ask your nearest VA medical facility.
9. Set up insurance, records and billing systems. Cover liability, vehicles and workers' compensation, and track attendance, care plans and claims. Health care providers that send claims electronically are HIPAA covered entities.
10. Market to families and referral partners. Offer tours and trial days, and keep referral sources updated.

How adult day centers get paid

The figures below come from the NCHS 2025 survey and describe centers' participant fee revenue.

• Medicaid: the largest source for most centers. More than half of centers got over 75% of their fee revenue from Medicaid, and about one in six got none. Depending on the state, Medicaid pays through the state plan, home and community-based services waivers (adult day health is a standard 1915(c) waiver service) or managed care plans. Settings that serve Medicaid HCBS participants must meet the federal HCBS settings requirements.
• Private pay: just over half of centers reported out-of-pocket payment by participants or families.
• VA: enrolled veterans who meet VA eligibility and clinical criteria can get Adult Day Health Care through the VA. It may be provided at VA medical centers, State Veterans Homes or community organizations, and a copay may apply. About one in four centers reported VA revenue.
• Older Americans Act: state and area agencies on aging administer these funds, including the National Family Caregiver Support Program, which can fund respite care at home or in an adult day care or institutional setting.
• Long-term care insurance: the National Association of Insurance Commissioners says policies may cover services in adult day care centers, depending on the policy.

Medicare rarely pays for adult day: 94.4% of centers reported no Medicare revenue.

Do EVV rules apply to adult day?

The federal requirement targets care in the home, not services at your center. Section 12006 of the 21st Century Cures Act requires states to use electronic visit verification (EVV) for Medicaid personal care and home health services "that require an in-home visit by a provider", by January 1, 2020 for personal care and January 1, 2023 for home health. EVV verifies the type of service, who received and provided it, the date, the location, and the start and end times.

CMS says personal care that does not require an in-home visit is not subject to EVV, but a service that includes in-home personal care or home health is covered whatever it is called. So if your organization also provides Medicaid-funded in-home personal care or home health visits, those visits are covered. States choose their own EVV systems, so confirm requirements with your state Medicaid agency.

Frequently asked questions

Do you need a license to open an adult day care?

Usually, depending on your state. A 2014 review for HHS found most states regulate adult day services through licensure or certification, and over half add Medicaid requirements for Medicaid-funded providers. In 2025, 92.3% of centers told NCHS they were state licensed or certified for adult day services, or CARF accredited.

How much does it cost to open an adult day center?

Costs depend on your state, model, building and capacity. The main drivers are a building that meets code, staff (especially nurses), vehicles and drivers (73.7% of centers provide or arrange daily round-trip transportation), meals, insurance, licensing fees, equipment, records and billing systems, marketing, and startup working capital.

Does Medicaid pay for adult day care?

It can, for people who qualify, through the state plan, home and community-based services waivers or managed care, depending on the state. Eligibility, covered services and rates vary by state.

What is the difference between adult day care and adult day health care?

Adult day care often means the social model, and adult day health care the medical or health model, which adds more intensive health and therapeutic services. States use different terms, though, and some call a medical model "adult day care."

How many adult day centers are there in the US?

An estimated 8,000 adult day centers operate in the US, including centers that are not state licensed or certified. In 2024, the chairman of the National Adult Day Services Association put the national figure at about 8,000 centers. Federal counts are lower because they only include centers that are licensed, certified or accredited, take part in Medicaid, or belong to a PACE program: NCHS estimates that 3,289 of those centers served about 227,169 participants in 2025, based on its National Post-acute and Long-term Care Study.