Group Homes: The Underused Discharge Option for Patients Who Can’t Safely Go Home

TL;DR: Group homes (small, staffed community residences) are a real discharge destination for patients who can’t safely live alone but don’t need SNF-level care. They’re underused because capacity is invisible and communication runs through separate Medicaid HCBS systems. In 30–60 days, CM leaders can map local providers, add a simple “group home?” tag to huddles, bring waiver partners into the hospital, and use tools like NextBed to broadcast PHI‑free needs and route details only after a provider raises a hand.

On any given Tuesday, you probably have at least one patient who is “medically ready” but effectively homeless:

• A man with intellectual disability and epilepsy who cannot safely live alone.
• A woman with serious mental illness who keeps getting sent back to the ED because the boarding house she’s in feels unsafe.
• An older adult with TBI who walks out of every SNF you send him to.

Everyone agrees: “He can’t go home.” But the only options on the whiteboard are: SNF, IRF, LTACH, home with home health.

The uncomfortable truth is that there is a whole category of settings your team rarely gets to use:

Group homes and other small community residences.

This article is about why group homes are an underused discharge option, how much of that is a communication problem, and how a capacity-first, PHI-last platform like NextBed can help you actually see and use that capacity.

1. What we mean by “group home” in a hospital discharge conversation

Language is messy. In different states you’ll hear:

• Group home
• Community Residential Alternative (CRA)
• Adult family home
• Community living home
• “Board and care” or “residential care”

Underneath the names, the model is similar:

Small community homes (often 4–6 residents) licensed to provide 24/7 supervision, personal care, and skill-building, but not full SNF-level skilled nursing.

Example: Georgia’s developmental disability system describes group homes as licensed homes for up to four people with developmental disabilities who need intensive residential support, including training and help with ADLs, communication, mobility, and health-related routines 3 4.

These settings usually operate under Medicaid home and community-based services (HCBS) waivers, not Medicare SNF rules. HCBS waivers allow states to fund long-term services “in the home or community rather than in an institution,” and nearly all states run multiple waiver programs 1 2.

For CMS billing purposes, a discharge to a group home is usually coded as discharge to “home” or “home with services” (for example, Medicare patient status codes list group home under the home bucket). That means:

• Your internal reports often do not distinguish “home alone” from “home with 24/7 staffed group home support.”
• Group home discharges are largely invisible in your dashboards, even when they happen.

So group homes live in a parallel universe: critical capacity, paid by different waivers, tracked in different systems, and rolled up into “home” in your data.

2. Which patients can go to group homes?

Every state and waiver is different, but there are recurring patterns.

Group homes typically serve people who:

• Meet nursing facility or ICF-IID level of care,
• Do not need continuous skilled nursing like a SNF,
• Need ongoing support with ADLs, behavior, or supervision that families cannot provide.

Common groups include:

• Adults with intellectual or developmental disabilities (IDD)
  • Autism, cerebral palsy, genetic syndromes, developmental delay.
  • Need help with personal care, medication routines, and community participation.
• Adults with serious and persistent mental illness
  • Schizophrenia, schizoaffective disorder, bipolar disorder with functional impairment.
  • Stable from an acute psychiatric standpoint but unable to live independently.
  • Often eligible for permanent supportive housing or mental health residential programs, sometimes structured very much like group homes.
• Adults with physical disability or TBI at nursing facility level of care
  • Require help with mobility, transfers, and ADLs but can be safely supported in a community setting with the right staffing.
• Older adults who cannot safely live alone but do not strictly need SNF
  • Some waivers and “community residential alternative” models cover frail elders who meet NF level of care but can be supported in small homes with personal care and intermittent nursing.

Importantly, many of these patients:

• Were already living in group homes before admission, and the immediate discharge question is whether their home can safely take them back with new equipment or training.
• Or they are on HCBS wait lists and technically “eligible” but not yet served 7.

In 2021, about 2.6 million people received services through Medicaid HCBS waivers, and another ~692,000 people in 38 states were on waiting lists, with a 36–40 month average wait time for services 7. A 2024 Congressional report found that people with intellectual and developmental disabilities wait the longest—about 50 months on average 8.

So your discharge puzzle often looks like this:

• The right type of setting exists in your county (group homes, CRAs, host homes).
• The patient may even be eligible.
• But the connection between hospital, waiver case management, and actual homes is fragile or non-existent.

3. Why group homes are the last referral – or never on the list

If you feel like group homes are always an afterthought, you’re not imagining it. It’s not just your hospital.

3.1 They live in a different funding and regulatory world

SNFs, IRFs, LTACHs, and home health live in the Medicare / post-acute frame that hospital systems track and measure every day.

Group homes sit in Medicaid long-term services and supports (LTSS):

• They are funded through state HCBS waivers and sometimes local mental health authorities.
• Eligibility assessment, wait lists, and service coordination are managed by separate agencies (DD services, behavioral health, aging services), not the hospital.

So for your care management team, a group home referral is not “call another facility.” It is “enter an entirely different system,” often with:

• Different eligibility rules and paperwork
• Different contacts and hours
• No shared EHR or portal

That is a big lift on a busy Tuesday.

3.2 Capacity is invisible

SNF and HH capacity, while not perfect, at least have:

• Dedicated liaisons
• Fax / portal / referral systems
• Internal lists, and sometimes vendor tools

Group homes often do not:

• There is no real-time bed board for local IDD or mental health group homes.
• Many providers are small agencies without sophisticated IT.
• Staffing shortages mean they may not have anyone whose job is “talk to hospitals about beds.”

National disability provider data show 9 10 11:

• 90% of community providers for people with IDD reported moderate or severe staffing challenges in 2024–2025.
• Roughly 69% had to turn away new referrals in 2024, and more than 60% reported turning away referrals in 2025 due to lack of staff.
• In 2025, average wait times for Medicaid HCBS were about 40 months overall, with 50 months for people with IDD, as noted above.

From your vantage point as a CM Director, this looks like “no group home beds.” But often what you really have is:

• A mismatch between where beds and staff actually exist
• And the people your hospital knows how to contact

3.3 The communication gap is real and documented

Research on hospital-to-community transitions consistently points to communication failures as a main barrier 18 19 20 21 22 23:

• A qualitative study of discharge communication found that professionals across settings described “multiple deficiencies,” with poor quality discharge communication as a major barrier to safe transitions.
• A study comparing hospital and community staff perspectives on transitions found barriers like “missing or inaccurate information” and “limited staff capacity,” and highlighted communication and coordination as key facilitators.
• Work by Regenstrief Institute found that poor information sharing between hospitals and nursing homes contributed to adverse events within 45 days of discharge for nearly 40% of residents.

If this is true even for SNFs, which are fully embedded in your referral pathways, imagine the gap for small group homes with no EHR integration at all.

3.4 Housing and supported living are already a top driver of delayed discharge

International data make this painfully clear 13 14 15 16 17:

• In England, a 2024 analysis found that lack of supported housing was the single largest reason for delayed discharge from mental health hospitals, accounting for 19% of all delayed days and costing an estimated £71 million in one year.
• A separate report estimated that about one in seven NHS beds are occupied by patients medically fit for discharge but waiting for social care or community placements.
• In Australia, recent data suggest up to 10% of public hospital beds are taken up by “stranded” patients awaiting aged care or disability accommodation.

In the U.S., headlines are different but the story rhymes 12:

• A major Houston-area provider is closing 14 group homes for people with disabilities because Medicaid reimbursement cannot sustain costs, displacing about 50 residents and highlighting wider fragility in the sector.
• Nationally, almost 90% of disability service providers report staffing shortages, and millions sit on HCBS waiting lists.

As a hospital CM leader, you feel these housing and support gaps every time you are told, “We’d take her if we had staff,” or “The waiver slot isn’t open yet.”

4. What this looks like on a real Tuesday

A typical scenario you might recognize:

• Patient: 32-year-old man with autism and seizure disorder, previously at home with aging parents, now deconditioned after pneumonia and a prolonged stay.
• Clinical: Medically stable, seizure regimen optimized, needs close supervision and help with ADLs. SNFs in your area either decline (behavioral risk) or feel like the wrong fit long term.
• Family: Parents are clear: “We can’t do 24/7 any more. He needs somewhere safe to live.”
• System response:

Your team calls the usual SNFs and a couple of large assisted living communities. Someone mentions, “Maybe a group home,” but you do not have:

• A current list of providers
• A sense of who has beds
• A waiver case manager at the table today

Result: non-medical days in your acute bed while everyone scrambles.

Meanwhile, there might be three group homes within 15 miles that could take him if:

• They knew he existed
• They had a structured way to see his support needs without PHI until they say “maybe”
• They had a single contact at your hospital who understands their world

Right now, that connection is mostly luck and personal relationships.

5. What you can do in 30–60 days (without a 6-month project)

None of this fixes HCBS reimbursement or 50-month wait lists. Those are policy problems.

But there are things you can do now that reduce “stranded” patients and bring group homes into the conversation earlier.

A. Map your local group home and housing ecosystem

In the next 30 days, you can:

Identify your state and county HCBS waiver programs for:

• IDD
• Serious mental illness
• Physical disability / TBI

Ask those agencies:

• “Which providers run small group homes or community residential alternatives in our catchment?”
• “Who is your single point of contact for hospital discharges?”

Build a one-page “capability card” for each provider:

• Who they serve (IDD, SMI, age ranges)
• Typical staffing and supervision
• Whether they can manage oxygen, G-tubes, seizure protocols, etc.
• Preferred referral channel and hours

You are not building a statewide directory. You are building your hospital’s “20 phone calls” list.

B. Add “group home / supported housing” to your daily huddle vocabulary

You can:

Add a simple tag in your discharge huddles:

• “Needs housing / group home level support?”

For those patients, ask early:

• “Is there an existing waiver or case manager?”
• “Do we have their contact in this patient’s chart?”

This does not guarantee placement, but it prevents the last-day scramble where everyone realizes at noon on Friday that the patient cannot go “home.”

C. Bring housing/support partners into your hospital at least quarterly

Many UK hospitals now use on-site housing support coordinators to speed discharge for patients with housing issues. Staff report faster discharges and less stress when there is “someone who specialises in housing” to take the lead.

You may not get a funded FTE tomorrow, but you can:

• Invite HCBS / housing leaders to a quarterly case review of your “nowhere to go” patients.
• Use those sessions to:
  • Clarify who should be considered for group homes
  • Update contact lists
  • Work through one or two real-time cases together

This builds the relational tissue that makes referrals possible.

6. Where NextBed fits: closing the communication gap

Everything above assumes your team has infinite time to call, fax, and chase answers. You don’t.

NextBed is built on a simple hypothesis:

You do not just have a bed shortage. You have a communication shortage.

A capacity-first, PHI-last system can help you:

• Broadcast needs to group homes and community providers without PHI
  • “Medically stable adult, IDD + seizure disorder, needs 24/7 supervised setting, county X, payer Y.”
  • Providers can raise their hand if they have capacity and the right license.
• See a panel of group homes that serve your hospital’s populations
  • Instead of an ad hoc, homegrown spreadsheet, you see dozens of residential providers in your county on a single screen.
• Route PHI only after a “maybe”
  • Once a home says “we might be able to take this person,” you move into a secure, PHI-compliant channel to share details, so no one is faxing sensitive information into the void.

Because NextBed is built to onboard community providers quickly, a realistic goal in many markets is:

Within one week, have 15–20 group homes and small residential providers in your county set up to see PHI-free need signals from your hospital.

From your team’s perspective, that looks like:

• Going from “We don’t know any group homes”
• To “We have a standing network of 20+ community homes we can ping in seconds.”

We can’t manufacture new HCBS funding or staff. But we can stop letting the group home network be invisible just because it lives in another system.

7. The bottom line for Care Management leaders

If you’ve ever thought:

“I wish there was a big building I could discharge them all to and know they were safe,”

You are already naming the gap group homes and supported housing exist to fill.

The problem is:

• Group homes and small community residences are funded, regulated, and tracked in a different universe from hospital post-acute care.
• Capacity is invisible to your team.
• Communication between hospital, waiver systems, and community housing is fragmented and slow.

You cannot fix national HCBS policy from your discharge huddle.

But you can:

• Map your local group home ecosystem
• Bring housing/waiver partners into the conversation earlier
• Use tools that make group home capacity visible and safe to use

And if you choose to, you can partner with platforms like NextBed that treat group homes not as an afterthought, but as core members of your discharge network.

That is not making excuses. That is using every lever you have to get patients out of the wrong bed and into a real home.