Presentation Transcript

1. Fundamentals of Continuing Care Retirement Communities Presented by: Peter M. Mellette, Esq.Mellette PC

   Mellette PC
2. Definition of a CCRC “A continuing care retirement community is an arrangement under which housing and health-related services are provided (or arranged) through an organization for the enrollee under an agreement that is effective for the life of the enrollee or for a specified period.” 42 CFR 422.133(b)(2) Mellette PC
3. Goals of CCRCs ■ Permit residents to live independently as long as possible ■ Delay entry to skilled nursing facilities by providing residents with at-home care Mellette PC
4. Advantages of CCRCs A 2002–2003 study found that seniors who live in CCRCs are more satisfied with daily lives and are more likely to be happier and healthier than their contemporaries who live in their own homes. (American Seniors Housing Association: Studies of Independent Living Residents and the Communities in Which They Reside) A research analysis paper by the Office of Disability, Aging, and Long-Term Care for the US Department of Health and Human Services found that residents who live in CCRCs are healthier and live longer than people who do not live in CCRCs. The analysis found less risk of disease and disability. Mellette PC
5. Ownership and Structure of CCRCs ■ May be non-profit (often with for-profit manager) or for-profit ■ Sponsoring organizations may be religious, fraternal other non-profit community organizations ■ May be single site or multi-site Mellette PC
6. Typical CCRC Components ■ Independent Living ■ Assisted Living ■ Nursing Home Mellette PC
7. Independent Living Facilities Independent living refers to living arrangements for elderly people who are able to safely maintain a healthy life in their own home and do not have significant daily care or medical needs. Independent living communities provide peer support and may have a wide range of support services available, but provide less care than assisted living facilities. Mellette PC
8. Assisted Living Facilities “Assisted Living Facility means a residential facility for independent living that is regulated by State or local government that provides continuous protective oversight and assistance with the activities of daily living to frail elderly persons or other persons needing such assistance. Continuous protective oversight may range from as little as awareness on the part of management staff of residents' whereabouts (and the ability to intervene in the event of crisis) to a higher level of services and assistance. Assistance with the activities of daily living may include, but is not limited to, bathing, dressing, eating, getting in and out of bed or chairs, walking, going outdoors, using the toilet, laundry, home management, meal preparation, shopping, supervision of medication, and housework.” 24 CFR 266.5 Mellette PC
9. Nursing Facilities “Nursing facility” means an institution (or a distinct part of an institution) which— (1)is primarily engaged in providing to residents— (A) skilled nursing care and related services for residents who require medical or nursing care, (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons, or (C) on a regular basis, health-related care and services to individuals who because of their mental or physical condition require care and services (above the level of room and board) which can be made available to them only through institutional facilities, and is not primarily for the care and treatment of mental diseases; (2) has in effect a transfer agreement (meeting the requirements of section 1861(l)) with one or more hospitals having agreements in effect under section 1866; and (3) meets the requirements for a nursing facility described in subsections (b), (c), and (d) of this section. 42 U.S.C. 1396r Mellette PC
10. Typically Included Services of CCRCs ■ Meals and special diets ■ Housekeeping ■ Transportation ■ Personal assistance (including daily living activities) ■ Emergency assistance ■ Recreational and social activities ■ Flexible, depending on current or future needs of resident; can opt to enroll in service at later time Mellette PC
11. Choosing a CCRC Create an ideal model/plan and use it in conjunction with advice from certified Geriatric Care Managers to advise your clients Mellette PC
12. Possible Entrance Requirements ■ Age ■ Health requirements ■ Financial status sufficient to cover CCRC expenses ■ May require resident to have Medicare and/or Medi-gap coverage Mellette PC
13. Types of CCRC Contracts ■ Type A: Comprehensive/Extensive/Life ■ Type B: Modified ■ Type C: Fee for Service ■ Rental Mellette PC
14. Type A: Comprehensive/Extensive/Life Entrance and monthly fee required Most expensive contract Guaranteed lodging, meals, personal care services, as well as necessary nursing care, at no additional cost Traditional model, similar to long term care insurance Least risk to the resident Mellette PC
15. Type B: Modified Entrance and monthly fee required Offers the same services as Type A but for a specified limited period of time (e.g., 45 days). Once that period had been reached, resident must pay for additional care Moderate risk to resident Mellette PC
16. Type C: Fee For Service Lower entrance and monthly fee required Pay market rates for services as needed Most risk to resident Mellette PC
17. Rental CCRCs → Not a “true” CCRC → No or minimal entrance fee → Independent communities which offer some kind of additional care, pay market rate for services Mellette PC
18. CCRC Costs ■ Costs vary Variance re terms of contracts Need to review each contract individually Dependent upon size of living arrangement Mellette P.C.
19. CCRC Costs Source: 2009 GAO Survey of Entrance and Monthly Fees for Selected CCRCs Mellette PC
20. Sample Prices Chesterfield, MO Lake Oswego, OR Independent Living $1,400-$2,900 per mo. Entrance: $43,000-$306,000 Independent Living $1,900 - $4,700 per mo. Entrance: $210,000-$496,000 • Assisted Living – $160-$248 per day • Skilled nursing/dementia care – $218 per day Source: NY Times Blog, ”CCRC Fees: Prepare to be Bewildered,” Dec. 3, 2009. Mellette PC
21. Potential Financial Advantages of CCRCs Residents may receive on-campus health care services (such as skilled nursing care) at below-market rates Residents may receive a number of included days of skilled nursing services each year at no charge above their current independent living or assisted living fees. The IRS may recognize a percentage of entrance fees and monthly fees as deductible medical expenses. See Delbert L. Baker v. Commissioner, 122 TC 143 (2004). Mellette PC
22. Medicare/Medicaid Payment CCRCs must be certified to provide Medicare or Medicaid services, usually to cover skilled nursing care Mellette PC
23. Medicare Coverage for Skilled Nursing Facility Services Resident must : have been hospitalized for at least 3 days enter facility within 30 days of hospitalization have medical condition that falls within limited number of classifications requiring RN or rehab level services and supervision Mellette PC
24. Medicaid Payment ■ Not expected nor allowed in most CCRCs ■ For example, Virginia only allows Medicaid payment to certain Northern Virginia CCRCs due to a “carve out” Mellette PC
25. Impact of Current Economic Situation CCRCs depend on high occupancy rates and quick filling of vacancies for financial viability. Residents may move to CCRCs at a higher age, thus spending less time in independent living units, and moving to higher levels of care sooner after entrance, incurring higher cost to the CCRC. Tightening credit markets reduce access to funds and CCRC liquidity. Some CCRCs have sought bankruptcy protection, but there is usually advance notice due to lender covenant defaults; bondholders, not residents, usually at risk. Source: GAO Report Mellette PC
26. Impact of Current Economic Situation Seniors may have difficulty selling their home or may have decreased wealth to pay for CCRC fees. In response, CCRCs may offer discounts to residents and employee gift cards to encourage potential residents to join and to keep occupancy high. See DHHS OIG Advisory Opinion 10-05 (2010). Mellette PC
27. Qualified Resident Assistance Policy Some states require CCRCs to have financial assistance policies to help residents remain in a CCRC despite an inability to pay or difficulty with payment. For example: Va. Code § 32.1-102.3:2 12 VAC 5-230-630 Mellette PC
28. Beyond the CCRC ■ Moving To Another Level of Care CCRC to develop internal determination on resident relocation Resident appeals process Disputes can arise Check agreement Mellette PC
29. State Regulation of CCRCs 34 States collect and review the standard form contract that the CCRC enters with residents Four out of every five CCRCs are located in states that collect and review CCRC contracts 30 States require CCRC contracts include a period with a right to cancel a contract and receive a full refund Source: GAO Report Mellette PC
30. State Regulation of CCRCs 38 States have some level of regulation specifically addressing CCRCs 38 States license CCRCs 12 States and DC have no CCRC – specific regulations Types of regulatory departments: Insurance Financial Services Banking Social Services Health Care Administration Public Health Elder or Community Affairs Source: GAO Report Mellette PC
31. State Regulation of CCRCs Required Nonfinancial Disclosures Source: GAO Report Mellette PC
32. State Regulation of CCRCs Required Financial Disclosures Source: GAO Report Mellette PC
33. State Regulation of CCRCs Required Nonfinancial Disclosures Source: GAO Report Mellette PC
34. Factors in Choosing a CCRC ■ What is the community like? ■ Does this CCRC have the capacity to deal with any special requirements/needs the client may have? ■ What is the client’s budget? What is refundable? Is it pro-rated based on term of stay? Does contract offer certain percentage of entry fee payable upon death depending on years of residence? How will monthly fee increases be calculated? How often? Mellette PC
35. Factors in Choosing a CCRC (cont.) Is the facility certified to accept to Medicare? Medicaid? Is there a resident assistance fund? What is the degree to which resident assistance funds can help defray the costs of care? What is the facility’s resident assistance policy? Mellette PC
36. Example: Virginia Regulation of CCRCs Financial Regulation All CCRCs in Virginia are required to register with the SCC and submit an annual disclosure statement and financial statement Residents and potential residents must be provided this disclosure statement and financial information annually Mellette PC
37. Virginia Regulation of CCRCs Bureau of Insurance Regulation Retention and repayment of deposit rules addressed Contract requirements addressed, including method for repayment Provisions for notice of sale or transfer of ownership or management Addresses SCC’s right to step in due to financial instability Addressees advertising limits and civil liability of CCRCs to residents Allows SCC right to enjoin or penalize for non-compliance Mellette PC
38. Licensure Regulation Requirements for Virginia Assisted Living Facilities The Virginia Department of Social Services sends out survey teams on bi-annual basis depending on certification (is facility certified to receive Medicare and Medicaid?) Required disclosure statement to residents per 22VAC40-72-60 Staff and Administrator requirements (22VAC40-72-191) Resident rights (22VAC40-72-550) Building code requirements and fire safety code compliance Assessment prior to admission and annually (22VAC40-745-20) Mellette PC
39. Virginia Nursing Home Definition “Any facility or any identifiable component of any facility licensed … in which the primary function is the provision, on a continuing basis, of nursing services and health-related services for the treatment and inpatient care of two or more nonrelated individuals, including facilities known by varying nomenclature or designation such as convalescent homes, skilled nursing facilities or skilled care facilities, intermediate care facilities, extended care facilities and nursing or nursing care facilities.” 12VAC5-215-10 Mellette PC
40. Governed by Federal and state law Must operate with a state license Residents must be fully informed of rights and responsibilities Must be inspected through unannounced on-site visits Virginia Nursing Home Regulation Mellette PC
41. ■ State is responsible for licensing Virginia Code §32.1-125 OLC inspects each facility as required by law ■ State agency performs certification (required to receive Medicare/Medicaid payments) Virginia Nursing Home Regulation Mellette PC
42. Virginia Nursing Home Requirements ■ Meeting Resident needs: Assessment of needs on admission Must be done within 14 days of admission, review every 3 months, reassessment once a year Develop and carry out care plans Need specific quality and safety meetings Provision of clean facility and healthy/safe food preparation Mellette PC
43. Virginia Nursing Home Inspection Addresses the quality of resident care, staff/resident interaction, environment Interviews: sample of residents and family members, caregivers and administrative staff. Review of clinical record Building code requirements, including fire safety and back-up generators and disaster planning Mellette PC
44. Litigation Involving CCRCs in Virginia Virginia Baptist Homes v. Botetourt County, 276 Va. 656; 668 S.E. 2d 119 (2008) (upholding a CCRC’s property tax-exempt status) Sunrise Continuing Care v. Wright, 277 Va. 148, 671 S.E.2d 132 (2009 ) (residents of a CCRC were not entitled to the return of their entrance fee and monthly fees when they experienced a series of roof leaks that persisted for several years) Keeney v. Littleton, 52 Va. Cir. 39 (2000) (contractual return of a CCRC entrance fee was a monetary account for purposes of decedent’s will) Mellette PC
45. GAO Report, “Older Americans: Continuing Care Retirement Communities Can Provide Benefits, but Not Without Some Risk.” http://www.gao.gov/products/GAO-10-611 NY Times, ”CCRC Fees: Prepare to be Bewildered” http://newoldage.blogs.nytimes.com/2009/12/03/ccrc-fees-prepare-to-be-bewildered/ United States Senate Select Committee on Aging, Continuing Care Retirement Communities: Risks to Seniors, July 21, 2010 (majority staff summary). CCRC Task Force, Today’s Continuing Care Retirement Community, AAHSA & ASHA, July 2010.

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46. Questions?

    www.mellettepc.com peter@mellettepc.com Mellette PC