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I noticed that your profile says you are a caretaker for a person with AD. Due to their special needs, some states have facilities that are special care units. If the dementia is rather pronounced, I would encourage you to explore them. Sometimes they are called MC units.

If your loved one will be needing Medicaid or some other state funded program to pay for the care facility, then there may be an official form that the state has that has a checklist of the needs and abilities. A doctor or some other health care professional signs it. A director at most facilities should be familiar with the requirements and guide you. You can ask them about some rules and requirements in your state. In my state, residents in AL have to be able to transfer from a wheelchair with the assistance of no more than 1 person. And they can't be double incontinent. However, MC does allow residents like that. I'd consult with someone who works with this type of thing all the time.
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Your bio only alludes to Grandmother's dementia, are there other medical issues?? And I agree, each state/area seems to have its own standards! Having said that - from my personal experience and in my opinion -- memory care is needed if the person has a risk of walking out of a place. Memory care is secured. Then there is the choice - memory care in assisted living or skilled nursing. If true nursing help is not required, I would opt for assisted living. It is half the cost of SNF and often a better environment. In my area, very few Assisted living memory care places accept medicaid so the resident has to have financial resources. I am sure there are exceptions to each of my statements but this was my philosophy. I was able to keep my Mom in an AL memory care for 18 months.
Make appointments and visit 2 ALs and 2 SNFs. Ask about their requirements and you will have a better picture of services in your area.
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Each time one of my parents went to rehab, or NH (from a hospital setting) a nurse was sent from the facility to assess them to see if they met admission criteria.

In the case of IL and AL, we brought mom to the facility and they assessed her to see if she met their criteria.

I agree with the above, start with the doctor who knows her and let her/him initially guide you; what is called Assisted Living in one area is called a nursing home in another. Different states have different regulations for what can be managed in various settings. For example, in NYS, lifts may not be used in AL settings, only in Nursing Homes; in Connecticut, lifts may be used in AL settings.
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Did you mean, how do you specifically, or how does one generally - i.e. how is it done?

I would expect the facilities themselves to have admissions criteria, but I would be surprised if they were categorical or absolute because the distinctions are a bit of a wavy line. Are you looking around at what's available, or satisfying yourself that what has been suggested for your loved one is appropriate?
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You as a caregiver don't evaluate them. A doctor does. He/she will assess the patient's health condition, daily living skills, need for rehab or skilled medical care, etc. Placement in a nursing home or skilled nursing requires a doctor's referral and diagnosis to be paid for at all by Medicare, Medicaid, or private insurance. Start with the person's primary physician or the emergency room doctor.
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