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JBrown, the AL facility probably determined his needs exceeded their capabilities.
Baffa25, probably same answer for you. The ALF isn't equipped to handle her.
1. To find out for sure, you really need to talk with the business office at the Assisted Living facility (ALF).
2. Find out what their criteria is for "assisted living", e.g. what conditions mean that your mom needs TOO MUCH help and must move to a nursing home?
3. Learn about medicaide or state aid for your mom NOW. It can be complicated so you don't want to wait until the last minute to learn details, especially if she's given away any assets or valuables lately.
Each ALF is different depending on the parent company - keep in mind these usually are FOR PROFIT organizations. Once her funds run out, she'll probably qualify for state aide (medicaide or medicaid). Medicaid will require that any monthly income received by your mom is paid to the ALF then they'll pay a supplemental amount to the ALF. Generally, if an ALF accepts medicaid residents/patients, they will require that she share a room with another medicaid resident.
Sometimes an ALF will tell you that they'll keep someone but once that person goes on medicaid, the ALF finds a reason to send him/her to the hospital then tell the family that they had to rent out their room. I've heard of this happening at least 5 times. ALFs have a huge profit motive and would rather push the patient on the hospital than try to help a family find another place to go - not all do this but it all depends on the staff and managements push for profit. Any hospital cannot legally discharge a patient without being certain they will get the help and care they need. So, if your mother ends up on the hospital, the social services staff there must help her find a suitable place to live.
I've painted the worst case scenario but remember it may not be that bad. Without knowing whether her ALF will accept medicaid you will really just get stressed for no reason. Ask these questions THEN begin to worry if necessary. I hope they'll find a way to work with her. Best of luck.