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Mary Ellen Early
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June 3, 2016

Report Published on CCRC Contracts

Continuing care contracts have been a topic of interest in Florida and elsewhere for some time. When LeadingAge Florida and FLiCRA were working on a proposed bill for the 2015 Legislative Session, we were surprised to learn about the diversity of continuing care business models. We found that many continuing care retirement communities that historically offered only traditional declining balance Type A contracts now offer more than one option including refundable entrance fee, fee-for-service and rental contracts.

Much of the diversification occurred during the great recession which forced CCRCs to creatively address the financial challenges of prospective residents who were reluctant to relocate because of declining home values and concerns about income from investments. Although the economy has rebounded, rentals still remain an option for some Florida CCRCs, accounting for approximately 12% of independent living units.

A collaborative research project conducted by Ziegler and the senior living marketing firm Love & Company in 2015 elaborates on this topic. Project findings, which are based on 80 respondents from multiple states, were summarized in the May 16, 2016 Ziegler Investment Banking Senior Living Finance Z-News which includes a link to the full report.

Although the sample is not large enough to be statistically projectable to CCRCs as a whole, 25 of the respondents were from Florida. Therefore, the information should be of particular interest to LeadingAge Florida CCRC members and their look-alike counterparts. (Nationwide, based on Ziegler’s definition which includes look-alikes, there are 1957 CCRCs with 110 in Florida.)

The most interesting findings of researchers include the following:

  • 44% of responding CCRCs still offer only one contract option.
  • About a third of responding communities with more than one contract option have a preference as to which contract option a new resident selects, and about half of those have specific tactics to influence consumer choice.
  • If a CCRC offers more than one contract option, the one that has been in use the longest tends to be the most popular.
  • The percentage of CCRCs offering various entrance fee refund options were the highest for declining balance and 90 - 95% refundable contracts.
  • When a high refund plan is priced at or below the average home value, a high portion of prospective residents tend to select it over other plans.
  • As a community matures, it may be financially feasible to make a zero refund option more attractive than a refundable one.
  • Few CCRCs reported that the pricing of competing CCRC significantly influences their pricing.
  • The average annual income range of new residents went from a low of $20,000 to a high of $264,000, with a medium of about $66,000.
For more information about the study methodology and research findings, be sure to read the full report.

November 23, 2015

Medicaid Reimbursement Plan

LeadingAge Florida has recently analyzed a “new Medicaid Reimbursement Plan” being circulated by Our Florida Promise (OFP). According to their page on Florida Health Care Association’s website, Our Florida Promise is “… established by nursing home owners and operators to enhance the ability of Florida Health Care Association to properly and successfully impact the legislative process. Our Florida Promise works in partnership with FHCA’s lobbying efforts to advocate for nursing home interests.”

LeadingAge Florida wants to provide members with important information regarding the OFP proposal. It is the goal of LeadingAge Florida to ensure you have the latest information on this topic.

  • The Governor’s FY 2016-17 Legislative Budget Request includes $500,000 for the Agency for Health Care Administration (AHCA) to contract with an independent consultant to develop a Medicaid reimbursement plan.
  • The LeadingAge Florida Board of Trustees voted to gather information and support efforts for additional funding through the legislative budget process to address Medicaid Prospective Plans for nursing homes.
    • LeadingAge Florida supports working with all interested parties to develop and define a fair and equitable reimbursement system.

Brief Analysis of the plan put forth by Our Florida Promise

  • The proposal rewards nursing homes with low staffing ratios and correspondingly low Direct Care costs.
  • Compared to the current system, the OFP plan delivers unacceptable financial losses to non-profit providers.
  • Reimbursements would be shifted under the plan from small, high quality not-for-profit communities to large corporate-owned facilities.
    • Gold Seal Nursing Home communities stand to lose $2.04 Million under the OFP plan.
    • Nursing Homes run by non-profit organizations lose over $11.5 Million in the OFP plan.
    • The negative effect on Single Owner Nursing Homes will be nearly $17 Million.
    • Nursing Homes run by corporate entities (many out of state) will gain $29.96 Million by the plan put forth by OFP.
  • Money would be moved from small, Florida-based, high-quality, not-for-profit organizations and transferred to large, corporate-owned institutions. More nursing homes would get paid less than their cost.
  • Large corporations have significantly lower direct care staffing ratios than other nursing homes.
  • LeadingAge Florida believes any new plan has to have the following priorities:
    • Winners & Losers: Create the least degree of variation for payment rates as compared to the current plan.
    • Respect additional costs associated with high quality of care. Understand not-for-profit communities invest differently as compared to for-profit facilities.
    • Inefficiencies: Address the current weaknesses in the property component of the payment methodology.
    • Dissemination of Limited Capital: Equitably distribute available funds to all nursing home providers.
    • Fund costs before allocating dollars for payments above costs.
    • Ramp Up: Phase in over a period of time, ideally five years.
    • Seat at the Table: Include input from relevant stakeholders.

LeadingAge Florida vigorously opposes any plan that would exacerbate the current, significant underpayment of many of our high-quality nursing home members.

Legislative Strategy/Engagement of LeadingAge Florida Advocacy Team & Lobbyists
Part of LeadingAge Florida’s multi-faceted approach to addressing this issue is to advise key legislators of the FHCA’s development of the OFP prospective payment plan and educate them on the devastating effect it would have on quality nursing home care provided at not-for-profit communities.

  • Members should contact key legislators with whom you have established relationships (see the list of key legislators below).
  • LeadingAge Florida continues to meet with and inform legislators and legislative staff in Tallahassee.

The following key legislators will be influential in shaping the direction taken in developing a new Medicaid prospective payment plan. If you have a relationship with any of these members, or if you are a constituent of theirs, please reach out to them while they are in their districts this week to express your concerns with FHCA’s payment models.

  • Senate President Andy Gardiner (R-Orlando) - (407) 428-5800
  • Senate President-Elect Joe Negron (R-Palm City) – (772) 219-1665
  • Senate Appropriations Chairman Tom Lee (R-Brandon) – (813) 653-7061
  • Senate Appropriations Subcommittee on Health & Human Services Rene Garcia (R-Hialeah) – (305) 364-3100
  • Senator Jack Latvala (R-Clearwater) – (727) 793-2797
  • House Speaker Steve Crisafulli (R-Merritt Island) – (321) 449-5111
  • House Speaker-Designate & Appropriations Committee Chairman Richard Corcoran (R-Lutz) – (813) 792-5177
  • House Health Care Appropriations Subcommittee Chair Matt Hudson (R-Naples) – (239) 417-6270
  • House Health & Human Services Committee Chairman Jason Brodeur (R-Sanford) – (407) 302-4800

 


 

November 19, 2015

Update on Implementation of 2015 CCRC Law (HB 749) and More

  • CCRC Contract Reviews: As of 11/16/15, thirty-four continuing care retirement communities have filed revised contracts with the Office of Insurance Regulation to comply with the 2015 statutory changes to Ch. 651, F.S. Seven of those CCRCs have contracts that are still in the review process which is taking approximately 14 days. Although Chris Struk’s position and responsibilities have changed, he will continue to complete contract reviews until a new CCRC Section is up and running. If you have questions about the contract review process or do not know if your contract requires changing, you may contact Mr. Struk at (850) 413-2480, Christopher.struk@floir.com or Mary Ellen Early, LeadingAge Florida Public Policy Liaison, at (386) 734-7681, meearly@earthlink.net. Please remember that most of the contract changes must be completed and in use by January 1, 2016.

  • Response to OIR Memo about CCRC Contract Status Due on November 20, 2015: CCRCs were emailed a memo from Carolyn M. Morgan, Director, Office of Insurance Regulation Life & Health Financial Oversight, on November 18, 2015 asking for the following information by close of business on Friday, November 20, 2015:
    • Has your CCRC facility filed new contracts for approval?
      • If so, please provide the filing ID#.
      • If not, when do you anticipate a new filing will be made?
    • If you do not plan to make a filing, please submit a signed certification that your facility is not required to file new contracts for approval because the currently approved contracts are in compliance with the new requirements of Chapter 651, Florida Statutes.
    If you did not receive the memo, please contact Ms. Morgan at (850) 413-5233.
  • CCRC in the News: University Village, a Tampa CCRC and LeadingAge Florida member, made the WFLA TV Channel 8 nightly news broadcast on November 4, 6, and 13. The coverage related primarily to a dispute with OIR and the Department of Financial Services over receivership proceedings. You may want to view the news clips in case residents or prospective residents ask you about them. Go to www.WFLA.com and search for University Village.

  • Updated Chapter 651, F.S.: Ch. 651, F.S., has been updated to include the 2015 changes adopted by the Florida Legislature as part of HB 749. To download the document, go to www.floir.com, click Government Affairs Florida Statutes, Ch.651. We will also post the updated version of Ch. 651, F.S., on the LeadingAge Florida website.

  

November 4, 2015

Proposed Changes to Medicaid Reimbursement Rules – Input Requested for November 16, 2015 Rule Development Workshop

Last week, the Agency for Health Care Administration published a Notice of Development of Rulemaking. The notice covers three rules. A rule development workshop is scheduled for November 16, 2015 in Tallahassee from 2:00 - 4:00 PM. LeadingAge Florida staff will be in attendance and will convey your comments. We have again requested a call-in number, so interested members may participate in the workshop.

Action Required: Please complete the Medicaid Proposed Rule Survey by November 8, which is linked in this alert. If you wish to discuss any of the proposals listed below, please contact Dr. Erwin Bodo, Reimbursement Specialist, by clicking here or by calling (850) 422-0174.

Summary of Proposed Rule Changes

Click on the Rule Number to view the Notice.

Rule No.: 59G-1.056

    Purpose: The purpose of Rule 59G-1.056 is to establish Florida Medicaid copayment and coinsurance responsibilities for Florida Medicaid covered services.

    LeadingAge Florida Staff Comments:
    The proposed rule changes include a list of exempt categories of Medicaid recipients who are not required to pay a copayment or coinsurance. The list includes individuals receiving services in a long-term care facility. We do not believe the proposal would adversely affect LeadingAge Florida members.

Rule No.: 59G-1.052

    Purpose: The purpose of rule 59G-1.052 is to specify provider responsibilities when a Florida Medicaid recipient has coverage through an individual, entity, insurance, or program that is liable to pay for health care services, and where to submit notices informing Florida Medicaid that a recipient has third-party coverage.

    LeadingAge Florida Staff Comments: The proposed rule emphasizes that Florida Medicaid is the payer of last resort. It includes a list of insurance coverage types that Medicaid providers must use to verify Medicaid recipient eligibility before billing Medicaid for a service. These proposed changes warrant particular attention by LeadingAge Florida member nursing homes. Please contact Dr. Bodo with your concerns on any of the proposed changes.

Rule No.: 59G-1.054

    Purpose: The purpose of Rule 59G-1.054 is to specify recordkeeping and documentation requirements for Florida Medicaid providers.

    LeadingAge Florida Staff Comments:
    The proposed rule requires providers to comply with the recordkeeping and documentation requirements specified in the recipient’s managed care plan. This is probably happening now. If you have contracts with multiple managed care plans, the recordkeeping and documentation requirements will likely vary from plan to plan since there is no requirement for uniformity among the plans.

Please click here to complete the Medicaid Proposed Rule Survey to provide us additional information related to this issue. Please complete the survey by November 8. Your responses are for internal use only and will not be shared with others.


 

 

 October 5, 2015

AHCA October 1, 2015 Mandated Forms 

LeadingAge Florida received the following notifications from the Agency for Health Care Administration Medicaid Division regarding the October 1, 2015, mandated use of the revised 3008 nursing home transfer form, as well as the revised PASRR form:

1) Medical Certification for Medicaid Long-Term Care Services and Patient Transfer Form AHCA 5000-3008 (October 2015)

The AHCA 5000-3008 form is used by the Comprehensive Assessment and Review for Long-Term Care Services (CARES) Program to determine medical eligibility for Medicaid Waiver programs. This form must be signed by a Florida-licensed physician or Florida-licensed advanced registered nurse practitioner, and returned to the local CARES office (refer to the CARES Map to find the appropriate local office).

The 3008 is a dual purpose form. It is a required medical certification for eligibility for Medicaid long-term care services and is an optional patient transfer form for use by hospitals and nursing homes.

The form can only be completed by a physician or an ARNP and certifies that the individual requires nursing facility service. When Medicaid reimbursement is requested for services being provided, Federal law mandates that a comprehensive assessment and review for long-term care services (CARES) be completed. This determines the long-term care needs, establishes the appropriate level of care, and recommends the least restrictive, most appropriate level of care.

The revisions in the 3008 form have evolved over the past five years. The changes in the 3008 are designed specifically to improve communication between facilities (hospitals and nursing homes), to reduce unnecessary re-hospitalizations. The revisions were made with input from representatives of AHCA's divisions of Medicaid and HQA, the DOEA/CARES program, the hospital, LeadingAge Florida, and FHCA.

Click below to download the form:
Medical Certification for Medicaid Long-Term Care Services and Patient Transfer Form - AHCA 5000-3008 (October 2015)

As of October 1, 2015, the CARES Program will only accept the revised Medical Certification for Medicaid Long-Term Care Services and Patient Transfer Form – AHCA 5000-3008 (October 2015), as incorporated into Rule 59G-1.045, Florida Administrative Code.

2) Preadmission Screening and Resident Review (PASRR) Forms Effective October 2015

The Preadmission Screening and Resident Review (PASRR) Level I Screen form, MedServ 004 Part A (effective October 2015), and the Resident Review – Evaluation Request form, MedServ 004 Part A1 (effective October 2015), have been incorporated into Rule 59G-1.045, Florida Administrative Code. In addition to updates on the PASRR Level I Screen form, the new Resident Review – Evaluation Request form allows Medicaid-certified nursing facilities to request a resident review for residents who experience a significant change in their mental or physical condition.

The Level I Screen and the Resident Review – Evaluation Request forms are available on the Agency’s Website and on the Medicaid fiscal agent’s Website.

Please discontinue use of any previous PASRR Level I Screen forms beginning October 1, 2015.

To assist you with the PASRR process and to understand the expectations for the Pre-Admission Screening and Resident Review (PASRR), AHCA has developed a video presentation. Please click here to access the presentation entitled, “Training on the Preadmission Screening & Resident Review, July 2015."

If you have any questions please contact Sandie Hugg at shugg@leadingageflorida.org or (386) 208-6268.
 


 

 

September 15, 2015

CCRC Law Takes Effect October 1, 2015 – Are You Ready?

CS/HB 749, the continuing care retirement community bill that passed during the 2015 legislative session, takes effect on October 1, but most of the contract changes apply to contracts entered into on or after January 1, 2016. Chris Struk, Office of Insurance Regulation Programs & Policy Coordinator, has reviewed and approved a couple of contracts that address the new entrance fee refund provisions in CS/HB 749. He noted that OIR will not approve a contract that is meant to comply with the new law unless the cover letter states that it will not be used until after the appropriate dates set forth in CS/HB 749.

Since there are a number of compliance dates in CS/HB 749, we thought it might be helpful to summarize the requirements for each contract type – similar to what we did in previous updates, but in greater detail.

  • Traditional Contracts (s. 651.055 (1)(h)1, F.S.) – Effective January 1, 2016, entrance fee refunds for traditional contracts must be made within 90 days after the contract is terminated and the unit is vacated, rather than the current 120 days after giving notice of intent to cancel. Contracts containing the new requirement may not be used before January 1, 2016, even if OIR approves them before that date. Residents who entered into a contract before January 1, 2016, may voluntarily sign a contract addendum approved by OIR that provides for the revised refund provision rather than the one specified in their original contract. If you submit a contract change to OIR related to this provision, be sure the cover letter that accompanies it specifies that the contract will not be used until January 1, 2016.

  • Same Unit Contingency Refund Contracts (s. 651.055 (1)(h)2.c., F.S.) - Contracts approved by OIR before October 1, 2015, that tie the refund to the next entrance fee received for the unit that is vacated may not be used after October 1, 2016. Providers offering these contracts have until August 2, 2016, to submit a new or amended contract to OIR for approval. Contracts with alternative refund provisions intended to replace same unit contingency refund contracts may be used immediately after OIR approves them.

  • Like or Similar Unit Contingency Refund Contracts Approved by OIR and in Use Before October 1, 2015 (s. 651.055 (1)(h)2.b., F.S.) – OIR stopped approving these contracts approximately two years ago when legal staff determined that Florida law had been modified in 1993 to delete language that specifically allowed for their use. CS/HB 749 contains language that allows this business model to continue, but certain changes are required if a provider chooses to continue to use like or similar unit contingency refund contracts on or after January 1, 2016.

  • Like or Similar Unit Contingency Refund Contracts Terminated Due to a Resident’s Death or Transfer to Another Level of Care Used On or After January 1, 2016 (s. 651.055 (1)(h)3.a. (I)(II), F.S.) – Effective January 1, 2016, contracts that tie a refund to the next entrance fee received for a like or similar unit, must specify the following: “Any refund that is due upon a resident’s death or relocation to another level of care that results in the termination of the contract must be paid the earlier of: (I) 30 days after receipt by the provider of the next entrance fee received for a like or similar unit [as defined in the contract] for which there is no prior claim by any resident until paid in full; or (II) no later than a specified maximum number of months or years, determined by the provider and specified in the contract, after the contract is terminated and the unit is vacated.” Contracts containing these provisions that are approved by OIR before January 1, 2016, may be used immediately.

  • Please note that the law (s. 651.055 (1)(h)4, F.S.) defines the term “like or similar unit” to mean “a residential dwelling categorized into a group of units which have similar characteristics such as comparable square footage, number of bedrooms, location, age of construction, or a combination of one or more of these features. Each category must consist of at least 5% of the total number of residential units designated for independent living or 10 residential units, whichever is less. However, a group of units consisting of single-family homes may contain fewer than10 units.”

  • Like or Similar Unit Contingency Refund Contracts Voluntarily Terminated (s. 651.055 (1)(h)3.b. , F.S.) – For contracts entered into on or after January 1, 2016, any refund due to a resident who vacates the unit and voluntarily terminates a contract after the 7-day rescission period required by law must be paid within 30 days after receipt by the provider of the next entrance fee for a like or similar unit for which there are no prior claims by any resident until paid in full. A specified maximum number of months or years for the entrance fee to be paid is not required for voluntary contract termination by a resident.

  • Transferable Membership/Ownership Right Contracts – Statutory language related to contracts that provide for a transferable membership or ownership right in the CCRC was not amended by CS/HB 749. Therefore, no changes to these contracts are required. To the best of our knowledge, only two CCRCs offer such contracts.

  • Submission of Contracts for OIR Approval - Be sure to submit a cover letter with the proposed contract that summarizes proposed changes and specifies the date that you intend to start using the contract after it is approved by OIR.
Other Changes in CS/HB 749 Unrelated to Contracts

In addition to changes to the refund provisions in Chapter 651, F.S., CS/HB 749 includes a number of other changes including: disclosure of the final OIR examination report and corrective action plan by a representative of the provider to the executive officer of the governing body, clarification of the role and responsibilities of the residents’ council, provisions for resident representation on the board of directors at the sole discretion of the board of directors or governing body of a CCRC, and disclosure of a copy of the most recent third-party financial audit filed with the annual report to the president or chair of the residents’ council within 30 days of filing the report. CS/HB 749 also requires a CCRC that files for Chapter 11 bankruptcy to include in its filing the name and contact information of a designated resident chosen by the residents’ council to serve on the creditors’ committee, if appropriate.

Resources:
  • For a copy of CS/HB 749 click here.

  • You should have received an OIR memo by email on July 7, 2015, titled House Bill 749 and Guidance on Florida's Form and Rate Filing Process. You may access the memo by clicking here.

  • An updated Office of Insurance Regulation Continuing Care contract worksheet is available at: http://www.floir.com/Sections/Specialty/CCRCindex.aspx

  • An updated disclosure check list is posted on the LeadingAge Florida website and may be accessed by clicking here.
Need Assistance or Have Questions?

For questions regarding the filing of your CCRC residency contracts, please contact Chris Struk, OIR Programs & Policy Coordinator - Life & Health at christopher.struk@floir.com or (850) 413-2480. Although Mr. Struk has been promoted to work on other insurance products, he will continue to review CCRC contracts until his replacement is named. Even then, he will be available to provide support to that person or persons.

Other questions may be directed to Becky Griffith, OIR Examiner Analyst Supervisor at becky.griffith@floir.com or (859) 413-2520 or you may contact Mary Ellen Early, LeadingAge Florida Public Policy Liaison, at meearly@earthlink.net or (386) 734-7681.
 

 


 

 

July 30, 2015

Clarification Received on Justice Department Fair Housing Settlement

On June 15, 2015, you received a regulatory update from LeadingAge Florida titled “US Department of Justice Rules against Retirement Community.” The regulatory update noted that residents of an assisted living facility that is part of a Virginia continuing care community won a four year battle contesting a policy that restricted their use of a waterfront dining room and participation in certain holiday activities held for the general resident population. The retirement community eventually reached an agreement with the aggrieved residents that allowed assisted living and nursing home residents to use dining facilities designated for independent living and attend events if they passed a health assessment, had a physician’s order, and signed a liability release. This did not satisfy the US Department of Justice (DOJ) which later issued a consent order that eliminated the health assessment and physician’s order. The case was settled with a $40,000 fine and $350,000 in compensation to aggrieved residents.

The DOJ settlement was a topic of discussion at a Continuing Care Roundtable Session held in conjunction with LeadingAge Florida’s annual convention. Participants suggested that nursing home residents whose care is covered by Medicare could jeopardize their skilled nursing benefits if they left the nursing home for meals served in another venue on campus. We have since received the following clarification from Steve Maag, LeadingAge Director of Residential Communities:

The DOJ action is a settlement, not a ruling. Technically it does not bind anybody. Practically, it represents DOJ policy that would take a court case to overturn. It applies to all parts of a CCRC regardless of payor source.” According to Mr. Maag, “The DOJ does not routinely monitor the activities of retirement communities. It only becomes involved if there is a complaint and, only then, if they believe there clearly are discriminatory practices.”


Mr. Maag sent us a November 13, 2014 publication from the Center for Medicare Advocacy related to this topic. According to the publication, “Residents can leave their SNFs for short periods, such as a day or two, to enjoy gatherings with their families and friends without losing Medicare coverage. However, SNFs are allowed to bill residents to reserve their beds.” The complete document may be viewed at: http://www.medicareadvocacy.org/you-can-leave-the-nursing-home/

No two situations are the same. What may be considered to be a model policy by one community may not be appropriate for another. If you are working on policies addressed in the DOJ settlement, you should consider consulting an attorney with Fair Housing experience. Mr. Maag is available to respond to questions and provide the names of attorneys who specialize in this area of law -- Stephen J. Maag, J.D. (202) 508-9498; SMaag@LeadingAge.org


 

July 16, 2015

ALF Rule Workshop Comment Period Ends July 20th; OIR Guidance Memo; Updated Disclosure Checklist; HB 749 PowerPoint Presentation

ALF Rule Workshop Held on Provisions in HB 1001

On July 13, 2015, the Department of Elder Affairs held a workshop to begin the process of revising the assisted living facility rule (58A-5) to provide additional guidance on changes authorized in HB 1001. LeadingAge Florida staff Bobby Bernal and Mary Ellen Early participated.

The purpose of the workshop was to give the public an opportunity to submit suggestions for inclusion in a proposed rule. Most of the comments related to requests for clarification or guidance on specific tasks associated with the expanded medication assistance (assistance with use of the nebulizer, oxygen, colostomy bag, etc.) that trained unlicensed staff may provide in ALFs with a standard license. For example, one attendee asked, if an unlicensed person would be able to calibrate a glucometer and not just clean it?

Participants also provided suggestions about the content of the two hours of additional training which is required as a result of the expanded medication assistance by trained unlicensed staff that is authorized in HB 1001. Anne Avery, Agency for Health Care Administration ALF Specialist, noted three of the top 10 most frequently cited deficiencies were associated with medication assistance, an indicator that training is very important.

Although HB 1001 took effect on July 1, 2015, unlicensed staff are not permitted to provide expanded medication assistance until rule 58A-5 is revised to provide additional guidance and clarification on both the tasks that may be performed and the additional training that must be provided. The rulemaking process typically takes 60 to 90 days at a minimum.

The Department of Elder Affairs will be receiving comments until July 20, 2015. If you have any suggestions that should be considered in the rule development process, please email them to Mary Ellen Early as soon as possible. To review HB 1001, click here.

OIR Guidance Issued on HB 749 and Form and Rate Filing Process -- On July 7, 2015, the Office of Insurance Regulation e-mailed a memo to all continuing care communities providing guidance on the process to use when filing requests for contract changes that may be required as a result of HB 749. A number of helpful tips are included in the memo including links to residency and reservation contract worksheets prepared in a checklist format. To view the OIR memo, click here.

CCRC Updated Disclosure Checklist Available -- Chapter 651, Florida Statutes, contains multiple disclosure requirements. These requirements are not currently contained in one specific section of law, which may complicate compliance. Several years ago, LeadingAge Florida prepared a checklist of the disclosure requirements in Chapter 651 to assist members with compliance. The checklist was updated on June 15, 2015, to include new requirements included in HB 749.

The most frequently cited deficiencies by OIR examiners pertain to failure to comply with one or more disclosure requirements, increasing the importance of the checklist. You must not only make the required disclosures, you must also document in writing they have occurred. To view the updated disclosure checklist click here.

CCRC PowerPoint Presentation on HB 749 Available – For those of you who missed the recent convention session on HB 749, the PowerPoint presentation may be accessed by clicking here. Please feel free to use it to educate your staff or board members about regulatory changes which take effect on October 1, 2015.
 


July 10, 2015

 

ALF Rulemaking Workshop -- Scheduled for Monday, July 13, 2015 in Tallahassee to discuss provisions in the assisted living facility bill (HB 1001) that passed during the 2015 Legislative Session and is now law.

Please note that there is a typo in the rulemaking notice included in this communication. The correct date is July 13, 2015, not July 13, 2013.

You should have received a letter dated June 29, 2015 from AHCA Assisted Living Unit Manager Catherine Anne Avery outlining key components of HB 1001 which took effect on July 1, 2015. The letter explains the Department of Elder Affairs will be working with AHCA to establish training requirements in rule for unlicensed staff to assist residents with expanded duties including: assistance with an insulin syringe or pen prefilled by a pharmacist or manufacturer, assistance with the use of a nebulizer, assistance with anti-embolism stockings, assistance with oxygen cannula but not titration, assistance with vital signs, and assistance with a colostomy bag.

In the spring of 2014, rule 58A-5.0181 (Admission Procedures, Appropriateness of Placement And Continued Residency Criteria) was updated to expand and clarify that a licensed nurse in a standard licensed ALF could provide the aforementioned assistance, but the new law goes a step further by allowing trained unlicensed staff to do the same. If you are interested in this topic, you may want to participate in the rule workshop which is the first step in promulgating a new rule.

Another topic that may be discussed is an expansion of the type of nursing services that may be performed in an ALF licensed to provide limited nursing services. According to the new law, a licensed nurse working in a LNS licensed facility is now authorized to perform nursing services within the nurse’s scope of practice to persons who meet ALF eligibility criteria. It does not expand eligibility criteria.

If you did not receive a copy of the June 29, 2015, letter, please click here.

 


 

 

June 18, 2015

Fair Housing Ruling Affecting Retirement Housing

US Department of Justice Rules Against Retirement Community -- Have you ever been approached by marketing staff or residents asking that you discourage nursing home or assisted living residents from using certain dining venues or common areas on campus? Were policies and procedures modified as a result of these requests? If so, you may be in violation of the federal Fair Housing Act which prohibits discrimination based on disability.

According to a June 8, 2015 article in The New York Times, assisted living facility residents of an upscale continuing care retirement community in Virginia won a four-year battle contesting a policy which restricted their use of a “gracious dining room with waterfront views” and participation in special holiday activities held for the general resident population. The retirement community eventually reached an agreement with aggrieved resident that “allowed assisted living or nursing residents to use dining facilities and attend events if they passed a health assessment, had a physician’s consent and signed a liability release.” But, the agreement did not satisfy Justice Department attorneys. A consent order that followed eliminated the health assessment and the physician's consent. The case was settled with a $40,000 fine and $350,000 in compensation to residents who were harmed. According to a Justice Department official quoted in the article, which is reprinted below with permission, the Justice Department will be “looking into facilities with analogous practices.”

The ruling has implications for all retirement communities, not just those that provide continuing care. LeadingAge national will be disseminating additional guidance to members in the near future.

Justice Department Takes Down Barriers in Retirement Homes

JUNE 8, 2015

When the dispute started four years ago, residents and their children figured it would be easily resolved.

The seniors liked living at Harbor’s Edge, an upscale continuing care retirement community in Norfolk, Va. They appreciated its amenities, including River Terrace, a gracious dining room with waterfront views. When a neighbor or spouse had to move from independent living to assisted living or to the nursing unit — the very transitions this kind of graduated facility is designed to accommodate — their friendships endured.

So when management suddenly announced, in May 2011, that the River Terrace and certain activities like Fourth of July celebrations would be restricted to independent living residents and off-limits to everyone else, a number of people protested the new policy as unfair.

They expected management to see that it had blundered, preventing not only friends but several married couples from having meals together.

“I thought this was just a misunderstanding, and as soon as we explained the gaffe, they’d say, ‘Boy, you’re right,’ ” said Mike Evans, who entered the fray along with his parents. The situation was first reported in The New York Times.

The dissidents weren’t anticipating a federal case. But they got one: Last month, the Department of Justice weighed in. Its complaint charged that the facility had violated the federal Fair Housing Act by establishing policies that discriminated against people with disabilities and retaliating against those who complained. To settle the case, Harbor’s Edge admitted no wrongdoing, but will pay $350,000 to compensate those harmed, and a $40,000 civil penalty.

The consent order also requires the facility to appoint a Fair Housing Act compliance officer, provide training for its staff and adopt a “reasonable accommodation” policy.

“You’re talking to an activist,” said a gratified Judith Shapiro, 87, a retired professor and assisted living resident who had been barred from the dining room by the policy. “It’s a big deal, to my way of thinking.”

Lawyers representing older Americans think so, too. “This is a decision that’s going to put the rest of the industry on notice,” said Susan Silverstein, senior attorney for the AARP Foundation.

While the settlement doesn’t create new law, “it’s a continual battle to get compliance” with the Fair Housing Act, said Eric Carlson, directing attorney of Justice in Aging, an advocacy group. Such cases rarely generate the large damages that would encourage lawyers to file suits.

Now, Mr. Carlson said, “if I’m running a long-term-care facility and I realize there are significant financial consequences, I think, I’d better change the way I do business.”

Though complaints of discrimination or segregation more commonly crop up at C.C.R.C.’s, whose residents have very different functional abilities, the Fair Housing Act applies to any senior housing or care facility — and the Justice Department clearly wants administrators to know it’s paying attention.

“It’s not an isolated situation,” said Gregory Friel, deputy assistant attorney general for civil rights. “We’re looking into facilities with analogous practices.”

A brief history: When Harbor’s Edge, a nonprofit facility, opened in 2006, any resident could use the River Terrace. Five years later, when the exclusionary policy restricted it and other dining areas to independent living residents, the executive director, Neil Volder, initially blamed overcrowding; he also claimed, incorrectly, that allowing people of different disability levels to use the same facilities violated Virginia regulations.

The Justice Department saw a simpler motive. “Harbor’s Edge adopted these policies because it wanted to market its facility as a place for ‘young seniors’ who wanted an active lifestyle,” its complaint said. Too many walkers and wheelchairs in the common areas undermined that message, apparently.

In 2012, after months of residents’ and family members’ writing letters, circulating petitions, generating news coverage and hiring a lawyer, Harbor’s Edge began a halting retreat from that stance.

It revised its policies twice, but the protesters remained unmollified until March 2012, when a third revision allowed assisted living or nursing residents to use dining facilities and attend events if they passed a health assessment, had a physician’s consent and signed a liability release.

“Everybody was more than satisfied,” said Lindsay Bilisoly, whose parents could finally dine together again in River Terrace. “We thought it was all over.”

The Justice Department thought otherwise. It sent lawyers to Norfolk to interview Harbor’s Edge executives, residents and family members, and review thousands of pages of documents. Last summer, it notified the facility that it would bring suit, and executives agreed to begin negotiations.

“This provides more flexibility, greater choices and autonomy for the residents,” Mr. Friel said of the policies adopted under the consent order, which eliminate health screenings and doctors’ permission slips. Besides, he noted, the three-year order ensures that Harbor’s Edge can’t revert to discriminatory practices for its duration.

Mr. Volder, the executive director, declined to be interviewed. In a statement issued with the consent order, however, Harbor’s Edge continued to defend its practices. “Given the D.O.J.’s virtually unlimited resources to litigate these issues, we simply made a business decision that the enormous cost and distraction of litigation would far outweigh the benefit of proving the correctness of our position,” it said.

It takes guts for older people to challenge policies at their facilities. At Harbor’s Edge, the dissidents report that management threatened to evict residents or sue their families, and also engaged in lower-level retaliation like taking away a resident’s prime parking space. By the time the Justice Department validated their position, a number of residents who had objected had died.

In such conflicts, time is on management’s side. In Huntsville, Ala., for example, Ann Clinton remains unable to play bingo in the independent living section of Redstone Village.

At first, the C.C.R.C. tried to bar her because she had moved into the nursing wing after back surgery; later, it suspended the game altogether.

Mrs. Clinton, now 81, contends with Parkinson’s disease. “That’s part of the dynamic in these cases: People don’t have the energy, so management will just wait them out,” her son, Kin Clinton, said. “And residents have a real fear of reprisals. It would be easy for the staff not to answer the call button or treat them shabbily.”

But recently, he said, a Justice Department lawyer had gotten in touch with him, too.

So the biggest ripple effect of the Norfolk settlement may be letting residents (and lawyers) around the country know that senior communities must make reasonable accommodations to enable them to use facilities. Segregating them in certain parts of their supposed homes because of their need for assistance is not reasonable. It’s illegal.

“We hope the settlement will be viewed as a model for the industry,” demonstrating that “there’s a way to assess an individual’s situation, rather than make broad stereotypical assumptions,” Mr. Friel said.

Dorothy Evans, 86, agreed to talk reporters from The Times and the Virginian-Pilot of Norfolk and blasted the Harbor’s Edge policy. She died in 2012, before the Justice Department could interview her, but her son Mike takes pride in her role.

“I’m gratified that she spoke out,” he said. “I’m happy that she was right. This is part of her legacy.”


 

June 9 , 2015

CCRC Bill Signed into Law and Change in Personnel at OIR

CCRC Bill Signed into Law – On May 26, 2015, Gov. Rick Scott signed HB 749 into law. The law takes effect on October 1, 2015. However, Continuing Care Retirement Communities (CCRCs) have until January 1, 2016, to comply with revised entrance fee requirements. To view the enrolled bill HB 749, click here. To view a summary of resulting changes to Ch. 651, Florida Statutes, prepared by LeadingAge Florida staff, click here.

All CCRCs will be required to revise their contracts because of the new entrance fee requirements -- some more so than others. The FLiCRA/LeadingAge Florida Ch. 651 Task Force that developed the bill was careful to include a sufficient amount of time for providers to modify their business plans, if necessary, and submit revised contracts to the Office of Insurance Regulation (OIR) for approval. Even so, it may be a challenge for the OIR staff to review contract changes for 71 CCRCs between October 1, 2015, and January 1, 2016.

To learn more about the changes to Ch. 651 and the contract review and approval process, please consider attending a special educational session on the implementation of HB 749 that is scheduled for Tuesday, June 30 at 3:30 pm in conjunction with our 52nd Annual Convention and Exposition (June 29-July 2, 2015). In addition, well-known actuary A.V. Powell will participate in the Continuing Care Retirement Community Roundtable Session on Thursday, June 2 at 11:00 am. Mr. Powell will speak about refund trends nationally and the importance of actuarially planning for them. In the meantime, if you have any questions, feel free to contact Mary Ellen Early at (386) 734-7681 or meearly@earthlink.net.

If you have not registered for convention and wish to do so, please click here.

Change in Personnel at OIR – Chris Struk was promoted recently to Programs and Policy Coordinator for Life and Health where he reports directly to Office of Insurance Regulation Deputy Commissioner Rich Robleto. Until Chris trains his replacement, he will continue to review forms and contracts submitted by continuing care retirement communities to OIR for review and approval. He has sole responsibility for this function. Chris does not anticipate that a new CCRC forms analyst will be in place before the fall. This change comes at a pivotal time since the CCRC bill (HB 749), which takes effect on October 1, 2015, requires contract changes that will affect all CCRCs.

We extend our congratulations to Chris for this promotion and wish to express our appreciation for the assistance he has provided to LeadingAge Florida members and staff over the past 15 years. Chris’ contact information has not changed. He may be contacted at (850) 413-2480.
 


 

 

April 27, 2015

CCRC Bill Passes Both Chambers – The legislative proposal adopted by the FLiCRA/LeadingAge Florida Ch.651 Task Force and approved by both associations has passed both the House and the Senate. This was another example of a great team effort by FLiCRA and LeadingAge Florida to ensure the main interests of CCRC consumers and providers are adequately addressed and protected.

CS/HB 749, sponsored by Rep. Charles Van Zant, R-Palatka, passed the House with unanimous approval on April 16. On April 24, the Senate substituted the House bill for CS/SB 1126 by Sen. Thad Altman, R-Indian River, and passed it unanimously. CS/HB 749 will become law on October 1, 2015 assuming it is not vetoed by the Governor. Once the Governor receives the bill, he has 15 days to sign it, let the bill become law without his signature or veto it. Since the bill sailed through the legislature with only two minor amendments, we do not anticipate any problems.

To view the enrolled bill CS/HB 749, click here.

Among other things, CS/HB 749 makes several changes to the entrance fee refund provisions in section 651.055, Florida Statutes. Please be sure to take the following changes into consideration if your organization offers refunds that are contingent on the receipt of the next entrance fee for a specific unit or unit type:

     

       

         

           

             

            LeadingAge Florida will hold a webinar after the Legislative Session to go over contract and other changes that CCRCs will be required to make as a result of the bill. We have invited OIR to participate in the webinar.

            If you have any questions in the interim, please contact Mary Ellen Early, LeadingAge Florida Public Policy Liaison, at (386) 734-7681 or via email to Mary Ellen Early.

            Bill Filed in California to Address Entrance Fee Refunds -- CCRC residents in Florida are not alone in their concern about refundable entrance fee contracts. A bill has been introduced in California that would require contracts with repayable entrance fees that are contingent on resale of the unit that is vacated be paid to a resident or his/her estate within 90 days of the unit being vacated. The bill would also require interest to be paid to the resident (10% per annum) if the unit is not resold within 90 days. Finally, the bill also prohibits assessing monthly fees for maintenance and housekeeping after the unit has been vacated.

            In contrast, CS/HB 749 contains much more reasonable changes that provide consumers with greater assurance that they will receive entrance fee refunds within a reasonable period of time. The FLiCRA/LeadingAge Florida Ch.651 Task Force was cautious in its approach, recognizing that dramatic changes to current business models could undermine the financial stability of CCRCs that are now financially healthy. 


             

            February 19, 2015

            CCRC Bill Filed - The legislative proposal adopted by the FLiCRA/LeadingAge Ch.651 Task Force and approved by both associations has been filed as a bill for the 2015 Legislative Session which starts on March 3. HB 749 is sponsored by Rep. Charles Van Zant, R-Palatka. The Senate sponsor is Sen. Thad Altman, R-Indian River. The senate bill does not have a bill number as of 2/18/15. To view HB 749, click here.
            The bill makes the following changes to Ch. 651:
            • For traditional contracts, requires a continuing care retirement community (CCRC) to make entrance fee refunds within 90 days after the contract is terminated and the unit is vacated vs. current law which requires the refund to be made no later than 120 days after the resident gives notice of intent to cancel. CCRCs will have until January 1, 2015 to modify their contracts to implement this change.
            • Codifies into law the practice of some CCRCs to enter into contracts approved by the Office of Insurance Regulation (OIR) that tie entrance fee refunds to the next entrance fee received for the unit that is vacated or a like or similar unit, whichever is applicable.
            • Phases out contracts that tie a refund to the unit that is vacated by specifying that they will not be approved by OIR after October 1, 2015; those that have been approved prior to that date may not be used after October 1, 2016.
            • Effective January 1, 2016, requires CCRCs with contracts that tie entrance fee refunds to the next entrance fee received for a “like or similar unit” to include a maximum time frame to be set by the provider for making a refund when the contract is not voluntarily terminated.
            • Defines “like or similar unit.”
            • For contracts issued on or after October 1, 2015 that are voluntarily terminated and tie the refund to the receipt of the next entrance fee for a like or similar unit, the refund must be made within 30 days of receipt of the next entrance fee for whatever unit or unit type is specified in the contract.
            • Clarifies that CCRCs must be accredited without stipulations or conditions for OIR to waive equivalent requirements in rule or law.
            • Adds bankruptcy to language in law related to preferred claims for liquidation and receivership.
            • Requires a representative of the provider to give a copy of the final examination report and corrective action plan, if one is required by OIR, to the governing body of the provider within 60 days of the issuance of the report.
            • Clarifies and strengthens the role of a residents’ council.
            • Requires a facility that files for chapter 11 bankruptcy to include the name and contact information of a designated resident selected by the residents’ council for consideration by the court to serve on the Creditors’ Committee.
            • Provides that a board of directors or governing board of the license provider may at its discretion allow a resident of the facility to be a voting member of the board or governing body of the facility. Provides guidance on how this may be achieved.
            • Requires every CCRC to provide a copy of most recent third-party financial audit to the president or chair of the residents’ council within 30 days after filing the annual report with OIR.
            The biggest challenge providers will face if the bill becomes law is getting new contracts approved by OIR. Effective dates included in the bill take into account delays that could occur as a result of the OIR contract review process.

            For those of you who have not participated in conference calls or meetings on the proposed legislation, please be aware that OIR intends to prohibit the use of entrance fee contracts that tie refunds to the next entrance fee received for the unit that is vacated or a like or similar unit if a bill does not pass giving them statutory authority to approve such contracts. The bill does this, but it also phases out by October 1, 2016 all contracts stipulating that the refund will be made from the next entrance fee received for the unit that is vacated.

            OIR Issues Initial Order of COA Suspension for Tampa CCRC – Last week, the Office of Insurance Regulation issued an Initial Order of Suspension of the certificate of authority issued to University Village in Tampa, a LeadingAge member, because of “a tip” alleging that required reserves are underfunded. In a related article in the Tampa Tribune, OIR Commissioner, Kevin McCarty, also stated that the new general partner and the management company do not meet the qualifications in law. University Village has 21 days to appeal the order and, contrary to what was reported in the Tampa Tribune article, may continue to write CCRC contracts until a decision is rendered by an administrative law judge. We wanted you to be aware of the situation in case you are questioned by residents or the media. To view the article click here.

            OIR’s action is based on allegations and not proven wrong doing. Until a thorough investigation is conducted by OIR, it is premature to draw any conclusions. University Village has retained an attorney to appeal the order. In the interim, the services provided to residents will not be disrupted. We expect University Village will offer its full cooperation to OIR in efforts to investigate these matters further and come to a responsible conclusion as quickly as possible.

            Process for Transitioning Out of Ch. 651 Not Simple – As your community plans for the future, the idea of phasing out of CCRC contracts could be raised. This option may be tempting given the regulations, but it would be wise to consider the following:
            • Several communities have been in “runoff” (transitioning to a fee-for-service or modified contract and fee structure that does not meet the definition of a CCRC) for more than a dozen years. If a provider changes its business model so that its contracts no longer fall under the purview of chapter 651, Florida Statutes, OIR will continue to regulate that CCRC until all CCRC contracts entered into prior to that time are terminated due to the death or relocation of a resident. This can take years. Even if only one contract holder remains in the community, OIR will continue to conduct triennial audits and require reports.
            • You could lose the ability to use your sheltered beds since they are designated for CCRC residents.
            • Nursing homes affiliated with CCRCs are exempt from the bed assessment levied by Medicaid to draw down additional federal funds. This is a benefit that would be lost.


             

             

            Dec. 22, 2014

            CCRC Proposal Finalized -- As you know, a FLiCRA/LeadingAge Florida Task Force met from October 2013 to September 2014 to review provisions in Ch. 651, F.S., related to entrance fee refunds, governance, and regulatory enforcement. As part of the process, LeadingAge Florida held numerous meetings in person and by phone to obtain input from continuing care retirement community members. We also sent out several surveys in an effort to learn more about evolving business practices and to solicit opinions from members about proposals that were under consideration by the Task Force at various times.

            This project has been complicated because of the variety of business models that have emerged over the years, and the Office of Insurance Regulation’s (OIR) reluctance to continue to approve certain contingency entrance fee contracts without specific statutory authority to do so. In an effort to accommodate the concerns of a few members that offer contracts that tie refunds to the next entrance fee received for the unit that is vacated, several changes were made to the proposal after the latest public policy conference call was held on December 5, 2014.

            The main provisions in the proposal are listed below. Provisions that have changed as a result of comments from OIR, input received during the December 5 public policy conference call, and subsequent conversations with members are preceded with an asterisk. FLiCRA disseminated this information to their members on Friday, December 19th so many of your residents may already have received this information.

            - Effective October 1, 2015, requires CCRCs that retain up to 2% of the entrance fee per month to pay any refund that is due within 90 days after the contract is terminated and the unit is vacated vs. current law which requires the refund to be made no later than 120 days after the resident gives notice of intent to cancel.
            - Codifies in law the long-standing practice of some CCRCs to enter into contracts
            (approved by the Office of Insurance) that tie entrance fee refunds to the next entrance fee received for a like or similar residential unit.
            - Creates a 12 month maximum refund period effective October 1, 2015 for such contracts when a contract is terminated due to death or transfer of the resident to another level of care.
            - *Allows CCRCs (5 in number) that have contracts in effect on October 1, 2015 that tie the entrance fee refund to the receipt of the next entrance fee for the unit that is vacated to continue to offer such contracts if they are modified to include a 12 month maximum refund period for contract terminated due to death or transfer of a resident to another level of care if the unit does not turnover before that time.
            - * Defines “like or similar unit” to mean at least five residential dwellings categorized by comparable square footage, number of bedrooms, location, age of construction, or a combination of one or more of these features as specified in the residency or reservation contract.
            - Allows for a 6 month extension of the refund period for these contracts if certain financial conditions exist.
            - *Provides that the contract must disclose that a 6 month extension of the refund period may occur if the CCRC has financial challenges that prevent it from meeting its operating and capital expenses and complying with lending covenants and OIR does not object.
            - Requires CCRCs to notify OIR in writing of the need for an extension at least 45 days before the 12 month maximum refund period expires. The notification must be accompanied by a corrective action plan.
            - *Requires providers to notify residents/estates within 14 days of the six-month extension taking effect.
            - Clarifies that a CCRC must be accredited without stipulations for OIR to waiver equivalent requirements in rule or law.
            - Adds bankruptcy to language in law related to preferred claims for liquidation and receivership. (FLiCRA is continuing to work on proposed language that might be acceptable to LeadingAge that would give priority to unpaid refunds in the event of a bankruptcy but with subordination to any existing or future financing or refinancing.)
            - Requires the provider to give a copy of the final examination report and corrective action plan, if one is required by OIR, to the chair or officer of the governing body of the provider within 60 days of the issuance of the report.
            - Clarifies and strengthens the role of a residents’ council.
            - Requires a facility that files for chapter 11 bankruptcy to include with its filing, the name and contact information of a designated resident selected by the residents’ council for consideration to serve on the Creditors’ Committee, if appropriate.
            - Requires CCRCs to provide a copy of the most recent third-party financial audit to the president or chair of the residents’ council.

            To view the final Task Force proposal, click here.

            OIR Position Unknown: OIR has not taken a formal position on the Task Force proposal. We know OIR has reservations about refundable contracts that are not backed with actuarially calculated reserves to cover future refund obligations. In addition, OIR is not supportive of contingencies refund contracts, particularly those that tie the refund to the receipt of the next entrance fee for the unit that is vacated. Last week, we responded to a lengthy list of questions from OIR about the Task Force proposal, several of which relate to these types of contracts. We stressed in our responses that major regulatory changes to current business practices could affect cash flow and possibly the availability and cost of financing and refinancing in the future.

            LeadingAge Florida hired a lobbyist, Beth Vecchioli from Holland and Knight Law Firm, who will help us educate OIR and the Legislature about the proposal and the importance of avoiding changes that could be detrimental. Beth worked in OIR for many years and is known for her expertise in insurance law.

            Legislative Sponsor Identified: The House bill sponsor is State Representative Charles Van Zant from Palatka, Florida. Penney Retirement Community is in his district. A couple of possible senator sponsors have been contacted, but a firm commitment has not yet been secured.

            The 2015 Legislative Session begins on March 3 and ends on May 1. Committee meetings will commence in January. Most bills have at least three committees of reference that must be cleared before a bill can be placed on the calendar to be heard on the floor of the House or Senate.

            Thank You: We are appreciative of the tireless work of the FLiCRA/LeadingAge Florida Task Force and the excellent relationship we continue to have with FLiCRA. A special thank you to LeadingAge Florida Task Force members: Jolynn Whitten (chair), Peter Dys and Charlie Coxson and to members of a special work group appointed by our chair Diane Marcello to provide additional support. Members of the workgroup include: Joel Anderson, Troy Hart, Bruce Jones (CCRC Chair) and Roger Stevens. We are also grateful to Rich Scanlon (Ziegler), Frank Mock and David Peterson (Lowndes, Drosdick, Doster, Kantor & Reed, P.A.), AV Powell (A.V. Powell & Associates) and Ron Shuck (Windermere Strategic Partners) for generously giving their time to assist. Finally, we are grateful to the staff of Clifton Larson Allen and Moore Stevens Lovelace for completing questionnaires and responding to questions at various times during the past year.

            There is always a risk when individuals or specific businesses are singled out, please forgive us if anyone has been left out.


             
            October 13, 2014


            Annual Governor’s Continuing Care Advisory Council Held In September — On September 29, 2014, the Governor’s Continuing Care Advisory Council, chaired by LeadingAge Florida member Peter Dys, convened its annual meeting. Each year, the Office of Insurance Regulation (OIR) staff presents the Council with a report on continuing care retirement communities (CCRCs). The report, based on 2013 annual reports filed by CCRCs, compares provider statistics from 2006 through 2013. The OIR PowerPoint presentation can be accessed by clicking here. We plan to schedule a webinar on the OIR report in the near future as we have done in previous years.

            Very little has changed from 2012 to 2013. The number of units and residents has increased slightly; however, much of the increase is due to a certificate authority issued to a new CCRC – The Terraces at Bonita Springs. Occupancy rates for independent living have not improved significantly in spite of the uptick in the economy, and the median occupancy for assisted living has decreased. A few interesting statistics follow:

            • The number of licensed CCRCs has increased by one for a total of 71.
            • No CCRCs are in the development stage (provisional certificates of authority).
            • Five CCRCs are in runoff (converting to rental) up from four in 2013.
            • The number of accredited CCRC continues to decrease, down from 18 in 2013 to 13 in 2014.
            • Seven CCRCs are reporting monthly to OIR compared to 11 last year.
            • Eight CCRCs are planning a total of 599 new independent living units.
            • Eleven CCRCs are planning a total of 424 new assisted living beds.
            • Four CCRCs are planning a total of 140 new SNF beds.
            • The median occupancy for independent living units increased from 85.3% in 2012 to 86.1% in 2013.
            • The median occupancy for assisted living decreased from 87.1% in 2012 to 85.4% in 2013.
            • The median occupancy of skilled nursing increased slightly from 87.7% for 2012 to 87.9% in 2013.
            • The percentage of facilities with positive net income was 55.1% in 2013 compared to 52.9% in 2012.
            • The percentage of CCRCs with a positive net operating income increased from 91.2% in 2012 to 94.2% in 2013.

            Common Problems Identified During Triennial Audits — Advisory Council members asked OIR if those providers should be aware of any trends identified during the triennial audits. Bernie Stoeffel, Market Examinations Director, noted that CCRCs do not always have adequate documentation to prove compliance with the disclosure requirements in Chapter 651. This is not new. If you are not already doing so, you should use the checklist prepared by LeadingAge Florida to make sure your staff is aware of all disclosure requirements. Mr. Stoeffel suggested that CCRCs require individual residents or the chair of the Residents Council (whichever is applicable) to sign a form acknowledging the receipt of required disclosure items. If you do not have written proof, OIR examiners have no way of knowing that the required documents were provided to residents or the Residents Council. He noted that providers should be careful to capture information related to the 7-day escrow account to show the date of entrance fee deposits and withdrawals from the account by resident. Copies of transactions from the 7-day escrow account that identify residents by name should be readily available to OIR examiners. Examiners have the responsibility of verifying that entrance fee refunds are made consistent with the terms of the contract signed by the resident so you need to have documentation of that occurring. They will be asking for information documenting the date of contract terminations and date of refund issuance.

            Audit Timing May Occur More Frequently Than Triennially — Chapter 651 calls for examinations and inspections to be conducted at least every three years and every five years for accredited CCRCs. OIR definitely has the discretion to conduct audits more frequently.

            An accredited CCRC was notified recently that an audit will start in the coming month even though the last audit was conducted four years ago. A reason was not given, but we expect that it may have been triggered by an occupancy rate lower than the median for the state. Below is a list of the items that the CCRC was asked to make available for the OIR examiner to review while on campus:

            1. Organizational Chart – including all ownership interests, subsidiaries, affiliates and associated ownership percentages.
            2. Current listing of Board Members and Officers (or their equivalent).
            3. Minutes of Board meetings held during the examination period, signed by an authorized officer (or their equivalent).
            4. Copies of Office-stamped "Approved" residency agreements, addenda and related forms used during the examination period, escrow agreement (other than MLR), if applicable.
            5. Copies of the disclosure documents afforded to residents upon entering the facility (e.g. if there is a form the resident signs upon receipt of these documents, please include it).
            6. Contracts with affiliates for administrative, management or vendor services entered into or amended during the examination period.
            7. Current entrance and maintenance fee structures, and the respective effective dates.
            8. Types and number of units.
            9. Current occupancy rates (percentage) for each type of unit.
            10. Minutes, notices of meetings, and agendas of quarterly meetings held with residents, pursuant to Section 651.085, Florida Statutes, during the examination period.
            11. Maintenance fee increase notices sent to residents during the examination period.
            12. Advertising file.
            13. Documentation to support notification to the Residents' Council of any plans filed with the OIR to obtain new financing, additional financing, or refinancing for the facility and of any applications to the OIR for any expansion of the facility, if any.

            Additionally, “to facilitate an expeditious review of the files,” the CCRC was asked to provide the following information on compact disc, USB flash drive or similar method or by email or mail by October 1 — 20 days before the scheduled audit:

            14. A list of all continuing care contracts executed during the examination period. The list should include the resident's name, entrance date, contract date and move in date (if available).
            15. A list of all continuing care contracts terminated during the examination period. The list should include the resident's name, entrance date, contract termination date, and reason for contract termination (i.e. move-out, death, or involuntary discharge).
            16. A list of all individuals placed on a waiting list, and the amount paid to be placed on such a list; during the scope period.
            17. The name and contact information for the President or Chairman of the Residents' Council.
            18. Completed Management Affidavit.

            Contract Worksheets Posted On OIR Website — Chris Struk recently posted two worksheets on the OIR website for providers to use when submitting a residency or reservation contract for review and approval. The forms may be downloaded from www.floir.com/sections/specialty/ccrcindex.aspx.

            OIR is no longer approving contracts that tie an entrance fee refund to the next refund received from the unit that is vacated or a like or similar unit. Although these contracts have been approved in the past, Chapter 651 does not authorize them. The FLiCRA/LeadingAge Florida Chapter 651 Task Force recommendations would codify current practice and make these contracts permissible. However, until Chapter 651 is changed, contracts with refund policies that are tied to the receipt of the next entrance fee for a specific unit or unit type will not be approved. If a CCRC with such a contract needs to amend a contract for other reasons, OIR will not approve it unless the refund provision is changed to be consistent with current law.

            FLiCRA/LeadingAge Florida Chapter 651 Task Force Completes Work — The Task Force held its final meeting on September 30, 2014 — a year after it was created. A final draft of the agreed-upon changes to Chapter 651 should be available for your review within the next two weeks. It is important to mention that OIR staff participated as a resource in Task Force meetings and provided suggestions and comments about the proposal. However, the suggestions and comments were not official so we do not know if OIR will support the proposed legislation. Any future questions, concerns or recommendations from OIR and others will be handled by the leadership of the two associations.

            We anticipate that a bill will be filed on behalf of FLiCRA and LeadingAge Florida for the 2015 Legislative Session. If you have a relationship with a state representative or senator who is knowledgeable about continuing care and might be interested in sponsoring a bill on our behalf, please contact Mary Ellen at meearly@earthlink.net.

            We are extremely grateful to LeadingAge Florida Task Force members Jolynn Whitten (Chair), Charlie Coxson and Peter Dys, for the countless hours they have put into identifying the issues and potential options. We need to thank Bruce Jones (CCRC Chair), Joel Anderson, Troy Hart, and Roger Stevens. They spent hours working with staff on this important project. We would like to express our sincere appreciation to attorneys Frank Mock and David Peterson with the law firm of Lowndes, Doster, Kantor & Reed, P.A., for their generous pro bono assistance with a FLiCRA proposal related to bankruptcy and attorney Richard Thames with the law firm of Thames Markey & Heekin, P.A.


             

            CCRC Update - OIR Triennial Audits

            December 7, 2012

            On November 27, 2013, Janegale Boyd, Tom Randle and Mary Ellen Early met with Office of Insurance Regulation staff (Ms. Karen Isch, MCM Senior Management Analyst II, Ms. Janice Davis, MCM Director, Market Investigations and Mr. James M. Pafford, Jr., MCM Financial Administrator) at their request to discuss the status of on-site triennial audits. Below is a summary of what we learned about triennial audits and other topics discussed during the meeting.

            1. Financing of Triennial Audits – This past September, OIR Deputy Commissioner Michelle Robleton agreed to our suggestion to return to an on-site visit for the Market Conduct Review part of the triennial audit. She indicated at the time that OIR does not have sufficient budget to guarantee that an on-site review can be done for all CCRCs. Ms. Isch confirmed during our meeting last week that on-site audits are occurring, and that OIR is in agreement that it is preferable for many reasons to conduct the Market Conduct Review in the CCRC that is being audited. However, the cost of travel-related expenses for OIR examiners remains a budgetary concern. In order to offset some of these expenses, CCRCs are being asked to pay for the hotel room selected by the OIR examiner while conducting the triennial audit. The state rates will prevail and the expense must be paid by the CCRC directly to the hotel. In the meantime, the LeadingAge Florida staff plans to explore the possibility of a legislative change during the 2013 Legislative Session to create a designated budget line item consisting of provider fees to cover expenses for on-site triennial audits for all CCRCs.
            2. Disclosure Documentation – When we asked about the most common violation noted during audits, we were told that it is failure to provide proof of complying with mandated disclosure requirements. OIR examiners are required during the triennial audit to verify that all mandated disclosure requirements are met. Providers must provide written, dated documentation that certain documents specified in Ch. 651, F.S., are provided to residents or resident leaders. Failure to do so will be noted and could result in a fine. To assist you in complying, attached it a Continuing Care Disclosure Checklist that LeadingAge developed in 2010 and recently updated.
            3. Refund Provisions – Inquiries about the timeliness of entrance fee refunds are a standard part of the triennial audit. You will be asked about outstanding entrance fee refunds.
            4. Anti-Fraud Focus – There is a statewide effort within all program areas (particularly insurance, managed-care, and Medicaid) to ensure that fraud is detected and punished. Questions may be asked during audits that are intended to detect fraud.

             Continuing Care Disclosures Checklist


             

            CCRC Update - September 24, 2012 Governor’s Continuing Care Advisory Council Annual Meeting

            October 4, 2012

            Issue #1: CCRC Report Presented at Governor’s Continuing Care Advisory Council Annual Meeting

            Please note this first issue has already been reported on in the Friday, September 28, 2012 LeadingLink. We have included the issue again so you could have a comprehensive report of the most up to date CCRC issues.

             

            On September 24, 2012, the Governor’s Continuing Care Advisory Council, chaired by LeadingAge Florida member Peter Dys, President/CEO of Shell Point Retirement Community, convened its annual meeting. Each year, staff of the Office of Insurance Regulation (OIR) presents the Council with a state of the state report on continuing care retirement communities (CCRCs) that is based on the most recent annual filing by CCRCs. The 2012 report compares annual provider statistics from 2004 through 2011. The information in the report can be used by individual CCRCs to compare their occupancy and financial trends with state averages and to generally assess the financial health of CCRCs as a provider group. The OIR PowerPoint presentation can be accessed by clicking here. We also plan to schedule a webinar on the annual report in the near future as we have done in previous years. Stay tuned for a date and time.

            Below is a summary of findings from the report.

            • The number of licensed CCRCs (70) has remained constant for the past four years.
            • Nineteen CCRCs were accredited in 2011 and 2012.
            • Two providers have a provisional certificate of authority, one less than in 2011.
            • Four CCRCs are in runoff (not writing new continuing care contracts -- converting to rental).
            • Eleven CCRCs are reporting monthly to OIR compared to 7 last year.
            • The 2,111 CCRC units (independent living and assisted living) sold in 2011 was down slightly from the 2,178 sold in 2010.
            • The average unit sales per CCRC in 2011 were 33 compared to 34 in 2010.
            • Ten CCRCs are planning a total of 739 new independent living units.
            • Six CCRCs are planning a total of 324 new assisted living beds.
            • Eight CCRCs are planning a total of 244 new SNF beds. (Because of the moratorium on the construction of new community nursing home beds, the new beds would be sheltered beds or beds purchased from another provider.)
            • The total number of residents (CCRC and rental) decreased from 28,749 in 2010 to 28,185 in 2011. The decrease is attributed to The Fountains at Boca Ciega relinquishing its certificate of authority after fully converting to a rental over a period of several years.
            • The total number of CCRC residents was 24,199 in 2011 compared to 24,309 in 2010 -- a decrease of 0.5 percent.
            • The total number of CCRC units available for sale increased slightly from 3,410 in 2010 to 3,430 in 2011.
            • The total number of units (CCRC and rental) decreased from 28,921 in 2010 to 28,362 in 2011. (The decrease is attributed mainly to the change in status of The Fountains at Boca Ciega.)
            • The median occupancy of all units, including rental, decreased from 83.6% in 2010 to 82.6% in 2011. The annual decline in median occupancy began in 2006 when the housing market started to bottom out. It should be noted that Florida’s occupancy rates are trending lower than the national median occupancy for CCRCs probably because we were hit harder than most states by the housing downturn.
            • The number of independent living units decreased slightly from 18,926 in 2010 to 18,892 in 2011. This was due to one CCRC converting a portion of its independent living units to assisted living.
            • The median occupancy for independent living units decreased from 84.1% in 2010 to 83.8% in 2011.
            • The median occupancy for assisted living increased from 87.5% in 2010 to 89.4% in 2011.
            • The number of rental units decreased from 2,372 in 2010 to 1,833 in 2011 again due mainly to the change in status of The Fountains at Boca Ciega.
            • The median occupancy of skilled nursing held steady at 90% for 2010 and 2011.
            • Median revenue decreased from $17.67 million in 2010 to $17.3 million in 2011 with an upper quartile of $25 million and a lower quartile of $11.2 million in 2011. This includes earned entrance fees, monthly fees and rental income.
            • Total operating revenue decreased from $1.5 billion in 2010 to $1.4 billion in 2011. The change was due to a large insurance settlement in 2010 related to defective stucco as well as the change in status of The Fountains at Boca Ciega.
            • Total expenses decreased slightly from $1.37 billion in 2010 to $1.35 billion in 2011 -- an indication that CCRCs are implementing efficiencies and possibly foregoing needed renovations.
            • Median expenses increased slightly from $17.4 million in 2010 to $17.7 million in 2011 with an upper quartile of $27.2 million and a lower quartile of $10.7 million in 2011.
            • Median net income decreased from $578,000 in 2010 to $411,000 in 2011 with an upper quartile of $1.1 million and a lower quartile of a negative $733,000 in 2011.
            • Median net operating income decreased from $4 million in 2010 to $3.4 million in 2011.
            • The percentage of facilities with positive net income was 71% in 2010 and 60.3% in 2011. 49 of 69 CCRCs had a positive net income in 2010 compared to 41 of 68 in 2011.
            • The percentage of CCRCs with a positive net operating income fell from 95.7% in 2010 to 92.7% in 2011. The change was attributed to reductions in returns on investment income and losses due to swap financing.
            • The number of CCRC consumer complaints was five in 2011 and three thus far in 2012.
               

            Issue #2: Council Discusses Triennial Audits

            OIR staff indicated that two on-site triennial audits have begun since Deputy Commissioner Michelle Robleton, at the request of LeadingAge Florida, committed to a hybrid model. The model includes three days in the facility for the market conduct review followed by a desk review in Tallahassee of the remainder of the audit, including the financial review. Deputy Commissioner Robleton reminded the Council that OIR does not have the resources to conduct on-site audits in every CCRC. LeadingAge Florida President/CEO Janegale Boyd asked if criteria have been developed to determine which facilities will receive on-site audits. The answer was “no.” Bennett Napier, Florida Life Care Residents Association (FLiCRA) Executive Director, indicated that FLiCRA shares LeadingAge Florida’s position about the importance of returning to on-site audits for all CCRCs. Charlie Paulk and Walter Hood, resident appointees to the Council, were under the impression that the law requires OIR examiners to visit CCRCs as part of the audits. They said that it is important for examiners to see what is going on and to speak with residents. After being told that Ch. 651 does not specify that triennial audits must be done on-site, Mr. Paulk indicated that it might be time to change the law.

            The conversation about the triennial audits dominated at least 30 minutes of the meeting. It was clear that residents and providers alike believe that the policy needs to be changed. Ms. Boyd and Chairman Dys reiterated the willingness of providers to pay for the audit as they have in the past.

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