Medicaid Frail Elderly Community Care Amendments of 1989

Medicaid Frail Elderly Community Care Amendments of 1989 - Amends title XIX (Medicaid) of the Social Security Act to permit States to provide Medicaid coverage of community care for functionally disabled elderly individuals. Defines a functional disability as Alzheimer's disease or the inability, due to physical or cognitive impairment, to perform at least two daily living activities. Defines a covered community care setting as a nonresidential setting or a residential setting in which more than two unrelated adults reside and personal services are provided.

Requires that community care be provided to each client in accordance with an individual community care plan (ICCP) prepared and periodically reviewed and revised by a community care case manager on the basis of a comprehensive functional assessment of a client's needs conducted by an interdisciplinary team before his or her receipt of care and at least annually thereafter.

Sets a ceiling on Medicaid payments to States for community care. Reduces Federal Medicaid payments to States that reduce their Medicaid community care expenditures below their FY 1989 expenditures for such care.

Requires that such care meet minimum requirements, to be developed by the Secretary of Health and Human Services, regarding client rights and the quality of such care. Makes the requirements imposed on nursing facilities regarding patient's rights and facility safety and sanitation applicable to settings in which community care is provided. Requires that community care settings: (1) disclose persons having an ownership or control interest in the setting; and (2) exclude a person from such interest if he or she has been excluded from the Medicaid program or had an interest in a community care setting repeatedly found to have provided substandard care.

Makes the: (1) Secretary responsible for certifying that State community care providers and settings comply with Medicaid requirements; and (2) States responsible for certifying that other community care providers and settings comply with Medicaid requirements. Requires that providers and settings be certified annually. Bases community care setting certification on an annual, unannounced survey. Directs the Secretary to: (1) develop a protocol for conducting surveys; and (2) conduct sample surveys of community care settings, within two months of State surveys, to test the adequacy of State surveys. Authorizes the Secretary to conduct a special survey of a setting or a review of a provider when there is reason to question its compliance with this Act. Prohibits the use of surveyors who have an interest in the provider or setting being surveyed.

Requires States and the Secretary to investigate complaints against providers or settings concerning violations of this Act's requirements. Requires each State to provide, through the State agency responsible for the certification of such providers and settings, for the receipt, review, and investigation of allegations of client neglect and abuse, and of misappropriation of client property by providers.

Requires that: (1) certain information regarding providers and settings and their compliance with this Act's requirements be made available to the public; and (2) State Medicaid fraud and abuse control units be given access to provider or setting survey and certification information.

Authorizes the Secretary or States to terminate a community care provider's participation in the Medicaid program and to impose a civil monetary penalty for failure to meet this Act's requirements.

Sets forth the Secretary's responsibilities relating to community care requirements.

Requires that State Medicaid payment rates for community care be reasonable and adequate to meet the costs of providing such care efficiently, economically, and in accordance with applicable laws, regulations, and standards.

Prohibits the coverage of substandard community care, penalties imposed for such care, and community care furnished by family members.