It's the USDA that regulates this.
Cage-free means they are not kept in cages. But that's it. Nothing more about how they are kept without cages.
I think you are confusing "cage free" with "free range" as written about in the book The Omnivore's Dilemma
by Michael Pollan. Free range chickens are supposed to have access to the outdoors, so they can range freely
Supposedly, some producers limit the chickens access to the outdoors. Some are said to only allow them to go out later in their life when they have no desire to do so.