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Running a Licensed Adult Family Home

Two things decide how a home does: its inspection record and how it is paid. Most homes are paid mainly by Medicaid, at a daily rate set by each resident's CARE classification and the home's region.

The rules keep changing, so the rule-change tracker is worth a look every few months.

Your steps, in order

  1. The Dos and Don'ts of Operating an AFHFourteen topics, each marked requirement or best practice.
  2. DSHS Inspections & ComplianceHow inspections work and the rules cited most often.
  3. A Through E: CARE ClassificationsHow each Medicaid resident's daily rate is set.
  4. CBHS Tiers ExplainedBehavioral health support paid on top of the base rate.
  5. The AFH Payment Field GuideECS, SBS, private pay, and what a contract list does not prove.
  6. Do AFHs Pay Taxes?The B&O exemption, sales tax, and the live-in Medicaid income exclusion.
  7. Getting Paid: ProviderOne BillingThe Medicaid contract, billing and pay dates, the resident's share, ECS and SBS.
  8. Washington AFH Rules Have ChangedEvery rule change since 2023, old beside new.
  9. Hiring a Management CompanyWhat a manager can do, what stays with you, and the DSHS filing.
  10. Find a ProfessionalBookkeepers, insurance brokers and others.

Watch out for

Inspections can come any time.

At least every 18 months, 15 on average, and unannounced; up to two years after three citation-free inspections.

RCW 70.128.070

The license fee is per bed.

$450 per licensed bed a year since July 2025 ($2,700 for six beds), per DSHS in writing.

AFH Costs & Fees

Rules changed in 2025 and 2026.

Homes licensed after September 20, 2026 need 27-inch interior doors where residents pass through. Check advice against the rule-change tracker.

Washington AFH Rules Have Changed

Looking for a figure or a rule? See Rules & key figures or the AFH glossary. General information, not legal or tax advice.

See the whole flow chart
❮ Back to AFH Club

Professional Disclosure

Real Property Planning is an educational and connection hub. It does not provide legal, tax, accounting, financial, brokerage, or appraisal services. Professionals referenced on this site are independently licensed and operate through their own separate businesses. Real estate brokerage services are provided by David Stein, a licensed Washington broker, through eXp Realty. Appraisal services are provided by David Stein through Stein Appraisal. Read the full disclaimer.

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