The study on which this article is based addressed the issue of the proportion of adult day care centers (ADCs) existing in 1986 that would qualify for Medicare funding under the 1989 U.S. Senate Medicare Adult Day Care Amendments. It also estimated the impact of the criteria on two policy-relevant subgroups of ADCs-that is, Alzheimer's vs. non-Alzheimer's and rural vs. urban-using data from a 1986 national census survey of ADCs. The five proposed Medicare criteria and the percentage of ADCs meeting them were: services to be provided directly, 14.6%; multi-disciplinary team, 20%; services to be provided directly or indirectly, 16%; program activities, 42%; and other, 53%. Only 3% met all five criteria while 13% met four out of five. Alzheimer's centers met the criteria more often than non-Alzheimer's centers, while urban centers qualified more often than rural centers. Based on the findings, implications for Medicare funding policy are discussed.