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--- STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 2 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 3 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. STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 4 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 5 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 6 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 7 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 8 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 9 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, thelicenseeprovider 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 STAFF ANALYSIS OF ASSEMBLY BILL 1433 (Eng and Beall)Page 10 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). -- END --