State officials have closed 18 state-regulated community-based living arrangement homes in the wake of a legislative audit earlier this year that revealed substandard living conditions in them, but they’re still grappling with how to address similar unlicensed and unregulated facilities.

For the unlicensed facilities, it’s a challenge trying to find small group homes that are offering housing coupled with supportive services to people struggling with mental health issues the same way a community-based living arrangement (CBLA) home would but without certification from the state to do so. For the unregulated ones, it’s an issue of to what extent the state can intervene in what Division of Public and Behavioral Health Administrator Julie Kotchevar called a “grey area” — homes that are offering more than just housing but not the level of support or services that a CBLA home would — at a Monday meeting of the Legislative Committee on Health Care.

The state is hoping to tackle the issue of unlicensed homes by specifically seeking them out, including using data searches to look for multiple Medicaid recipients who live at a single address but are unrelated, investigating reports to a health-care quality and compliance hotline and monitoring business licenses to look for license types or business names that may be operating as an unlicensed CBLA home. Kotchevar said at the meeting that the state recently fined one unlicensed facility $25,000 for being caught operating without a license for the second time.

“Unlicensed homes are just difficult to locate proactively,” Kotchevar said. “People who intend to break rules tend to be really good at breaking rules and hiding from those of us who are looking for them, so we really have been trying to take more methodical approaches.”

But addressing unregulated homes — which may be referred to as independent-living homes, congregate living or other roommate and rental arrangements — may require a change in state law or regulation. Kotchevar said there is a “pretty big margin” between landlords who are strictly offering people a place to live and aren’t regulated and caretakers who are providing support coupled with housing under the CBLA model who are regulated.

“That grey area in the middle is where we’re seeing vulnerable people wind up in, places where there’s the promise of support but not at the level they need it, because if they provided it at the level they need it, they’d be a regulated facility,” Kotchevar said. “So it’s sort of that grey area.”

In the wake of the audit, the Las Vegas Review-Journal wrote about a woman who died after she was put into an unregulated group home without supervision.

Kotchevar said the goal of any statutory or regulatory change would be to make the language inclusive enough so that homes providing lower levels of support would be able to be regulated to protect vulnerable people while not over-regulating normal housing arrangements. Another possible statutory change would be expanding the definition of what counts as a referral agency, so that more businesses that provide referrals to group residential facilities are captured under the law.

The law governing the hospital discharge process could also be changed to require certain referrals or support be in place at the time of discharge, Kotchevar said.

As far as the regulated community-based living arrangement homes, the state has either closed or providers have opted to close 13 homes in Southern Nevada and five homes in Northern Nevada since the release of the audit in January, Kotchevar said. She reiterated to lawmakers that in all cases where homes were determined not safe or the operator of the home didn’t think they could bring conditions up to standards the state found replacement housing within 24 to 48 hours.

“Everyone is now in a safe, licensed and certified home,” Kotchevar said.

Now, the state is working on how to make bigger picture changes in the homes. For instance, the state is creating a level of care assessment that ensures that people are being appropriately placed based on an individual assessment of needs and not offered what Kotchevar described as “cookie-cutter-type services.”

They’re also trying to bring about a cultural change within the staff that work with these individuals to help them understand that the ultimate goal is independence, not just stabilization, Kotchevar said. The division is also developing a new method of calculating housing and rental support costs separate from the costs of paying for support hours so the state isn’t just paying providers one flat amount.

Kotchevar said the state is also looking at the agreements they had with individual provider homes that were providing substandard living conditions to see if the state can recoup any of the money they paid providers.