Oregon Assisted Living Staffing: How the Acuity Tool Sets Your Payroll
Oregon requires every licensed assisted living facility, residential care facility and endorsed memory care community to set its direct care staffing with an acuity-based staffing tool, which calculates the care time each resident needs instead of relying on a fixed staff-to-resident ratio. For a buyer, that means payroll is tied to the residents in the building on the day you take over and to how their needs change afterward. In a building where much of the revenue comes from Medicaid, the staffing the tool requires has to be paid for out of state rates.
The requirement grew out of House Bill 3359 in 2017 and Senate Bill 714 in 2021, and the rules requiring every facility to use an approved tool, with every resident evaluated, have been in force since 2022 and were last amended in December 2024. Facilities can use the tool provided by the state Department of Human Services or a proprietary one, but a proprietary tool needs the department's approval before use and an annual attestation that nothing substantive has changed.
The tool has to account for 22 care elements, including bathing, transfers, medication administration, monitoring and responding to call lights, and it has to cover both scheduled care and the unscheduled needs that come up during a shift. Care time must be specific to each resident rather than an average applied across the building, so two facilities with the same census can need very different staffing.
Each resident has to be evaluated before moving in, reviewed within the first 30 days, re-evaluated after a significant change of condition and updated at least quarterly. As residents age in place, their care minutes climb, and the staffing plan has to climb with them even if occupancy stays flat.
Facilities must post a staffing plan for each shift showing the total care time the tool calls for, staff consistently to that posted plan around the clock, and keep historical plans with their effective dates for at least three years. Those archived plans are one of the most useful records a buyer can request, because they show what the building actually needed over time rather than what the seller chose to schedule.
The department reviews staffing during surveys and during complaint investigations involving abuse, injury, safety or staffing, and surveyors can examine the care minutes for sampled residents and interview staff about how they were set. When the department finds problems, it can place conditions on the license, order corrective action or rescind its approval of a proprietary tool, and a facility that never put a tool in place can be required to use the department's own, and inspection results, violations and regulatory actions are posted publicly.
Revenue does not rise automatically with acuity, because while private pay residents may move to a higher care level and pay more, Medicaid rates are set by the state, so a building with a large Medicaid census can see its staffing requirement rise faster than its income. A seller's margin built on a lower-acuity resident mix may not hold as those residents age.
A facility with a specific needs contract has to meet that contract's minimum staffing as well as the tool's results, so a building serving a specialized population can carry two separate staffing obligations at once. Read any such contract before closing, because its minimums stay in force after the sale.
Before you make an offer, ask for the current posted staffing plans, the archived plans for the past three years and the facility's acuity evaluations for current residents. Compare the care time the tool calls for with the payroll the seller actually ran, and price the building on the staffing the tool requires rather than the schedule on the seller's books. Then check recent survey results for any staffing citations, since those tell you how the department has judged the building's compliance so far.
The care time the tool calls for is also the payroll you will be carrying, so the gap between the posted plans and the seller's payroll belongs in your price rather than in your first-year budget. I help assisted living buyers rebuild payroll from staffing plans and acuity evaluations and model how labor will rise as residents age in place. If you are looking at a facility here, send the staffing plans and financials to amer@awadcapitaladvisors.com, and I can help you see what the building costs to staff before you make an offer.