BILL ANALYSIS                                                                                                                                                                                                    






                                  SENATE HUMAN
                               SERVICES COMMITTEE
                            Senator Carol Liu, Chair


          BILL NO:       AB 1433                                      
          A
          AUTHOR:        Eng and Beall                                
          B
          VERSION:       June 14, 2010
          HEARING DATE:  June 22, 2010                                
          1
          FISCAL:        Appropriations                               
          4
                                                                      
          3
          CONSULTANT:                                                 
          3
          Park
                                        

                                     SUBJECT
           
                Continuing care contracts: temporary relocation
                                         
                                    SUMMARY  

          Defines "residential temporary relocation" in the context  
          of continuing care contracts of residents who live in  
          continuing care retirement communities (CCRC). Establishes  
          related rights, requirements, and procedures.

                                     ABSTRACT  

          Existing law:

          1.Provides for the regulation by the Department of Social  
            Services (DSS) of activities relating to continuing care  
            contracts that govern care provided to elderly residents  
            in CCRCs for the duration of the resident's life or a  
            term in excess of one year.

          2.Defines "permanent closure" of a CCRC as the voluntary or  
            involuntary termination or forfeiture of a provider's  
            certificate of authority or license or other action that  
            results in the permanent relocation of residents, except  
                                                         Continued---



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            in the case of a natural disaster or other event out of  
            the provider's control.

          3.Provides for notice to residents of a "permanent closure"  
            of a CCRC and regulates the permanent closure of CCRCs,  
            as specified below:

             a.   Requires that continuing care contracts include  
               provisions describing how the provider will proceed in  
               the event of a closure;

             b.   Requires CCRCs to provide written notice to DSS and  
               to the affected residents or designated  
               representatives of the affected residents 120 days  
               prior to the intended date of closure of a continuing  
               care retirement community;

             c.   Requires closure notices to include the intended  
               date of closure and the requirement of a relocation  
               plan;

             d.   Requires providers to offer a resident a choice of  
               specified placement options, the terms of which shall  
               not be less than the terms of the continuing care  
               contract between the resident and the provider as if  
               that contract had been fully performed;

             e.   Requires providers to, within 30 days of submitting  
               the relocation plan for a permanent closure, fund a  
               reserve, set up a trust fund, or secure a performance  
               bond to ensure fulfillment of costs associated with  
               the relocation, in an amount equal to or greater than  
               the estimated costs of relocating residents and  
               relocation options, funded with qualifying assets not  
               subject to any liens, judgments, garnishments or  
               creditor's claims;

             f.   Requires providers to submit monthly progress  
               reports to DSS detailing the progress and problems  
               associated with the closure until all affected  
               residents are relocated and all required payments are  
               made;

             g.   Requires DSS to monitor the implementation of the  
               closure and impose penalties if DSS determines that a  




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               provider is closing a facility in violation of the  
               permanent closure requirements or is doing so in a  
               manner that endangers the health or safety of  
               residents; and,

             h.   Prohibits the provider from displacing any resident  
               or to close the facility until the relocation plan has  
               been prepared and submitted to DSS and provided to the  
               affected residents, the affected residents'  
               representatives, and the local long-term care  
               ombudsman program.

          This bill:

          1.Defines a "residential temporary relocation" to mean the  
            relocation of one or more residents, except in the case  
            of a natural disaster that is out of the provider's  
            control, from one or more residential living units,  
            assisted living units, skilled nursing units, or a wing,  
            floor or entire CCRC due to a change of use or major  
            repairs or renovations.

          2.Further defines "residential temporary relocation" to  
            mean a relocation that lasts for a period of at least  
            nine months but does not exceed 18 months without the  
            written agreement of the resident.  Allows a provider to  
            extend the period of temporary closure for up to six  
            months, if that resident has agreed to the extension in  
            writing. Provides that the written agreement shall state  
            that by signing, the resident waives all rights to the  
            same relocation options offered in the case of permanent  
            closure for the period of the extension.

          3.Requires a continuing care contract to state that the  
            resident has a right to terminate his or her contract  
            after 18 months of residential temporary relocation, and  
            that the contract have provisions related to monthly fee  
            and entrance fee refunds upon termination of the contract  
            for this reason.

          4.Requires all providers to include in resident contracts  
            the procedures to be followed to ensure that temporary  
            relocations provide comparable levels of care, services,  
            and living accommodations as described in the resident's  
            contract.




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          5.Requires a provider to notify the resident of the  
            impending relocation at least 60 days in advance of the  
            relocation, and requires a provider to meet with the  
            resident and, at the resident's request, family members  
            or other individuals at least 30 days in advance of the  
            transfer to discuss all aspects of the transfer.   
            Requires notice of this meeting to be provided in writing  
            and at least seven days in advance of the meeting and to  
            include the date of the transfer; the available  
            replacement unit or units and monthly fees; the time when  
            the resident will be able to inspect the replacement unit  
            or units; and the estimated date when the resident will  
            be able to return to his or her unit or may move to a  
            substitute permanent unit.

          6.Requires a licensee to provide a unit in a facility,  
            agreed to by the resident, that most closely provides the  
            services, size, features, and amenities provided in the  
            unit being vacated, if accommodations are not available  
            at a CCRC operated by the provider within a 30-mile  
            radius.  Provides that, if the provider has acted in good  
            faith and fair dealing in offering a particular unit to  
            the resident, the provider's duty under this section to  
            provide a temporary relocation unit has been satisfied,  
            and no alternative unit or units need be offered.

          7.Requires the provider to arrange and pay for all moving  
            costs to the new facility and moving costs to the  
            reconstructed facility, if the resident returns, as well  
            as storage costs.

          8.Provides that the resident shall only be required to pay  
            to the provider the monthly fee required in the  
            resident's contract, or the monthly fee in the new  
            facility, whichever is less.  Requires the provider to  
            make payment to the facility at which the resident is  
            relocated.

          9.Requires the provider to make available the services of a  
            licensed medical or geriatric professional to advise the  
            resident, the resident's representative, and the provider  
            regarding the relocation of the resident, upon request by  
            the resident or the resident's representative.  Allows a  
            provider to place a reasonable limit on the cost of the  




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            services of the medical or geriatric professional.

          10.Requires the provider to identify unique service and  
            care needs, if applicable, for a resident directly  
            affected by the temporary relocation.  Requires the  
            unique services and care needs identified to be in  
            writing and become a part of the resident's plan of care.

          11.Requires the provider to set forth specific procedures  
            for the resident to follow regarding relocation to the  
            unit vacated, the selection of a new unit, and timeframes  
            for making choices.  Requires specified procedures for  
            returning the relocated resident when residential units  
            are ready for occupancy, including compliance with notice  
            requirements, and selection and characteristics of units.

          12.Provides that if the relocation of a resident of a  
            continuing care retirement community will exceed 18  
            months, the resident will have all options that are  
            available in the case of permanent closure, unless there  
            is a written agreement between the affected resident and  
            the provider that the provider may extend the period of  
            temporary closure for up to six months.


                                  FISCAL IMPACT  

          According to the Assembly Appropriations Committee analysis  
          of a prior version of the bill, costs associated with this  
          legislation would be minimal and absorbable within existing  
          resources.  It is unclear whether recent amendments would  
          alter the fiscal analysis.


                            BACKGROUND AND DISCUSSION  

          Author's statement

          The authors state that, currently, the Health & Safety Code  
          does not provide guidance to operators and residents of  
          CCRCs on how to appropriately handle temporary relocation  
          of residents, due to remodeling or reconstruction projects.  
           The authors state that this bill establishes notification  
          requirements, procedures for selecting temporary  
          accommodations, payment responsibilities for moving costs  




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          and monthly fees, procedures for returning to the  
          originally vacated unit, and contract cancellation  
          provisions if the relocation exceeds 18 months.



          Continuing Care Retirement Communities (CCRCs)

          CCRCs offer a long-term continuing care contract that  
          provides housing, residential services, and nursing care,  
          usually in one location, and usually for a resident's  
          lifetime.  Most CCRCs provide three levels of care:  
          independent living, assisted living, and skilled nursing.   
          A resident may begin in the independent living setting and  
          move to a higher level of care as his or her care needs  
          change.

          DSS licenses each CCRC as a "residential care facility for  
          the elderly."  Two branches at DSS participate in the  
          regulation of CCRCs: the senior care program branch  
          monitors CCRCs for compliance with licensing laws and  
          regulations regarding buildings and grounds,  
          accommodations, care and supervision of residents, and  
          quality of service.  The continuing care community branch  
          is responsible for reviewing and approving applications to  
          operate a CCRC and monitors the ongoing financial condition  
          of CCRC providers.  If a skilled nursing facility is  
          operating on the CCRC campus, it must be licensed by the  
          Department of Public Health.



          Legislative history

          A prior bill, AB 407 (Beall and Eng), Chapter 442, Statutes  
          of 2009, established requirements for the permanent closure  
          of a CCRC.  Prior to AB 407, while the law regulated the  
          establishment and operation of CCRCs, minimal regulations  
          governed a facility's closure.  The authors of this bill  
          report that AB 407, as introduced, addressed both permanent  
          and temporary closures.  Due to provider concerns over  
          prevailing economic conditions, however, AB 407 was amended  
          to address only permanent closures.  The joint authors of  
          both AB 407 and this bill note that they and stakeholder  
          organizations representing CCRC providers and CCRC  




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          residents agreed to address residential temporary  
          relocations this year. 


          Arguments in support
          Aging Services of California, the sponsor of this measure,  
          writes that this measure is a product of several months of  
          work with stakeholders and will establish new provisions in  
          the CCRC statutes that address temporary resident  
          relocations in CCRCs. Aging Services states that, while  
          most CCRC remodeling and renovation projects are executed  
          with minimal impact on residents, the Health & Safety Code  
          does not provide guidance to operators and residents of  
          CCRCs on how to handle temporary construction relocations  
          when disputes arise. The sponsor states that the bill will  
          provide equity and certainty to residents and providers  
          facing remodeling projects that require residents to  
          temporarily relocate from their homes or apartments during  
          construction. The sponsor believes that the bill strikes a  
          balance between the need of CCRCs to remain attractive to  
          future residents and protecting the rights of existing  
          residents. 

          Related/prior legislation

          AB 407 (Beall and Eng), Chapter 442, Statutes of 2009,  
          established patient protection requirements on continuing  
          care retirement communities in the event of their closure.


          AB 949 (Krekorian), Chapter 686, Statutes of 2007,  
          established procedures and duties for a residential care  
          facility for the elderly prior to transferring a resident  
          to another facility or living arrangement as a result of  
          forfeiture of a license or change of the use of the  
          facility.

                                   PRIOR VOTES
           
          Assembly Floor:     68 - 0
          Assembly Appropriations:17 - 0
          Assembly Human Services:  6 - 0

                                     COMMENTS
           




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          1.Opposition to prior version of the bill. The Department  
            of Social Services indicates that it opposed the prior  
            version of the bill and is currently evaluating whether  
            recent amendments remove its opposition. 

          2.Definition of temporary location.  The bill defines a  
            residential temporary location as a relocation that lasts  
            for a period of at least nine months but does not exceed  
            18 months without the written agreement of the resident.   
            The authors may wish to address why the protections  
            afforded by this bill would be unnecessary for residents  
            who are relocated for a lesser period of time, such as  
            six months.

          3.Authors' amendment. The authors propose to strike the  
            following language to simplify the requirement related to  
            the offering of a substitute unit.

            (d)  If accommodations are not available at a continuing  
            care retirement community operated by the provider within  
            a 30 mile radius, the licensee shall be required to  
            provide a unit in a facility, agreed to by the resident,  
            that most closely provides the services, size, features,  
            and amenities provided in the unit being vacated.     If  
            the provider has acted in good faith and fair dealing in  
            offering a particular unit to the resident, the  
            provider's duty under this section to provide a temporary  
            relocation unit has been satisfied, and no alternative  
            unit or units need be offered.
            
          4.Recommended committee amendments.  Staff recommends the  
            following clarifying amendments:

            a. Page 25:
                
               15       (c)  The provider shall meet with the  
               resident and, at the
               16    resident's request, family members or other  
               individuals at least
               17    30 days in advance of the transfer to discuss  
               all aspects of the
               18    transfer , including, but not limited to, the  
               rights, requirements, and procedures outlined in this  
               section and section 1793.91  .  Notice of this meeting  
               shall be provided in writing and




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               19    at least seven days in advance of the meeting  
               and shall include all
               20    of the following information:
               21       (1)  The date of the transfer.
               22       (2)  The available replacement unit or units  
               and monthly fees.
               23       (3)  The time when the resident will be able  
               to inspect the
               24    replacement unit or units.
               25       (4)  The estimated date when the resident  
               will be able to return
               26    to his or her unit or may move to a substitute  
               permanent unit.
               27       (d)  If accommodations are not available at a  
               continuing care
               28    retirement community operated by the provider  
               within a 30-mile
               29    radius, the  licensee   provider  shall be required  
               to provide a unit in a facility,
               30    agreed to by the resident, that most closely  
               provides the services,
               31    size, features, and amenities provided in the  
               unit being vacated.
               32    If the provider has acted in good faith and fair  
               dealing in offering
               33    a particular unit to the resident, the  
               provider's duty under this
               34    section to provide a temporary relocation unit  
               has been satisfied,
               35    and no alternative unit or units need be  
               offered.

            b. Page 26:

               16        1793.91.  The provider shall set forth  
               specific procedures for
               17    the resident to follow regarding relocation to  
               the  originally  unit vacated, the
               18    selection of a new unit, and timeframes for  
               making choices.
               19    Procedures for returning the relocated resident  
               when residential
               20    units will be ready for occupancy shall include  
               all of the following:
               21       (a)  The provider shall provide the resident  




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               at least 60 days
               22    notice of the return to his or her unit or a  
               substitute permanent
               23    unit, and subsequent notices 30 days and seven  
               days prior to the
               24    return date.  
               25       (b)  The resident shall have the right to  
               return to his or her
               26    previously occupied unit or a unit comparable in  
               services, size,
               27    features, and amenities to the  originally  unit  
               vacated, without payment of
               28    any further entrance or accommodation fee.  The  
               provider is not
               29    required to guarantee a specific unit.   
               Assignment of units shall be
               30    based upon the length of occupancy of returning  
               residents.
               31       (c)  If the relocation of a resident of a  
               continuing care retirement
               32    community will exceed 18 months, the resident  
               will have all options
               33    allowed by Section 1793.82, unless there is a  
               written agreement
               34    between the affected resident and the provider  
               as described in
               35    subdivision (d)  (e)  .


                                    POSITIONS  

          Support:  Aging Services of California (sponsor)
                    
          Oppose:Department of Social Services (prior version -  
          1/14/10).


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