BILL ANALYSIS Ó
SENATE HUMAN
SERVICES COMMITTEE
Senator Leland Y. Yee, Chair
BILL NO: AB 261
A
AUTHOR: Chesbro
B
VERSION: June 18, 2013
HEARING DATE: June 25, 2013
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FISCAL: Yes
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CONSULTANT: Tepring Piquado
SUBJECT
Residential care facilities for the elderly: fees and
charges
SUMMARY
This bill prohibits Residential Care Facilities for the
Elderly (RCFE) from requiring advance notice to terminate
an admission agreement upon death of a resident, prohibits
RCFEs from assessing fees once the personal property of a
deceased resident is removed and requires that within three
days of a patient's death the RCFE provide a written notice
of the facility's polices involving contract termination
and refunds, as specified. This bill requires RCFEs to
refund any fees paid in advance that cover the time after
the resident's property has been removed. It also makes
other conforming changes.
ABSTRACT
Existing law:
1) Establishes California Residential Care Facilities
for the Elderly Act. (HSC§1569 et seq.)
Continued---
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2) Defines "Residential care facility for the elderly"
as a housing arrangement chosen voluntarily by persons
60 years of age or over, or their authorized
representative, where varying levels and intensities
of care and supervision, protective supervision,
personal care, or health-related services are
provided, based upon their varying needs, as
determined in order to be admitted and to remain in
the facility. (HSC§1569.2 (l))
3) Requires the Department of Social Services (DSS) to
inspect and license Residential Care Facilities for
the Elderly (RCFEs). (HSC§1569.11)
4) Establishes that an "admission agreement" shall
include all documents that a resident or his or her
representative must sign at the time of, or as a
condition of, admission to a RCFE. (HSC§1569.880)
5) Requires the admission agreement include the
facility's policy concerning refunds and conditions
under which the admission agreement may be terminated,
among other things, as detailed. (HSC§1569.884)
6) Requires RCFEs to implement a theft and loss
program which includes an inventory and surrender of
personal effects and valuables following the death of
a resident to the authorized representative in
exchange for a signed receipt and immediate written
notice to the public administrator of the county upon
the death of a resident whose heirs are unable or
unwilling to claim the property. (HSC§1569.153(f))
7) Permits RCFEs to charge a fee for the services
provided, which shall include, but not be limited to,
supervision, room, leisure activities, and meals.
(HSC§1569.5)
8) Provides that any fee charged by a licensee of a
residential care facility for the elderly, whether
prior to or after admission, shall be clearly
specified in the admission agreement.
(HSC§1569.651(d))
9) Provides that any person who violates this chapter,
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or who willfully or repeatedly violates any rule or
regulation adopted under this chapter, is guilty of a
misdemeanor and upon conviction thereof shall be
punished by a fine not to exceed one thousand dollars
($1,000), by imprisonment in the county jail for a
period not to exceed one year, or by both the fine and
imprisonment. (HSC§1569.40)
10) Defines "Equity project" as a continuing care
retirement community where residents receive an equity
interest in the continuing care retirement community
property. (HSC§1771 (e)(6))
11) Defines "Refundable contract" as a continuing care
contract that includes a promise, expressed or
implied, by the provider to pay an entrance fee refund
or to repurchase the transferor's unit, membership,
stock, or other interest in the continuing care
retirement community when the promise to refund some
or all of the initial entrance fee extends beyond the
resident's sixth year of residency. (HSC§1771 (r)(2))
Existing state regulation:
1) States the admission agreement shall be
automatically terminated by the death of the resident,
whose relatives shall not be liable for any payment
beyond that due at the date of death, unless agreed to
in writing or ordered by the court. (MPP CCL Title 22,
Title 22, Division 6, Chapter 8 § 87507)
This bill:
1) Prohibits a Residential Care Facility for the
Elderly (RCFE) from requiring advanced notice for
terminating an admission agreement upon death of a
resident.
2) Prohibits an RCFE from assessing fees once all
personal property belonging to the deceased resident
is removed from the living unit.
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3) Prohibits an RCFE from impeding the removal of the
deceased resident's personal property, as specified.
4) Establishes that an RCFE must refund any fees paid
in advance covering the time after the belongings were
removed from the facility within 15 days, as
specified.
5) Requires that, if fees are assessed while a
resident's property remain in a unit after the
resident is deceased, the licensee shall, within three
days of becoming aware of the resident's death,
provide to the resident's responsible person or other
individuals identified in the admissions agreement,
with written notice of the facility's policies
regarding contract termination upon death and refunds.
6) States that this section does not apply to fees
charged by a continuing care equity project or amounts
deducted from entrance fee refunds or repayments, as
specified in statute.
7) Requires the RCFE's admission agreement to include
the facility's policy concerning refunds, including
the conditions under which a refund for advanced
monthly fees will be returned in the event of a
resident's death.
FISCAL IMPACT
An Assembly Appropriations Committee analysis indicates
that costs associated with this legislation should be minor
and absorbable within existing resources.
BACKGROUND AND DISCUSSION
Purpose of the bill
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According to the author, AB 261 brings additional clarity
and fairness to a certain billing practice with regard to
assessing fees upon the death of a resident in Residential
Care Facilities for the Elderly (RCFEs). This bill
prohibits an RCFE from requiring advanced notice before
terminating an admission agreement when the resident has
died. It also requires that fees stop once the deceased
resident's personal property has been removed from the
resident's apartment.
Residential Care Facility for the Elderly
Residential Care Facilities for the Elderly (RCFEs) provide
a housing arrangement chosen voluntarily by the resident,
the resident's guardian, conservator or other responsible
person. RCFEs provide care, supervision and assistance with
activities of daily living, such as bathing and grooming to
people 60 years of age and over and people under 60 with
compatible needs. RCFEs may also be known as assisted
living facilities, retirement homes and board and care
homes. RCFEs can range in size from six beds or less to
more than 100 beds. The residents in these facilities
require varying levels of personal care and protective
supervision. RCFEs also may provide incidental medical
services under special care plans. RCFEs are licensed by
the Community Care Licensing branch of DSS.
According to DSS, as of May 2013, there were 7,500 licensed
RCFEs in the state with a total capacity of 143,459
residents. According to the organization California
Registry, the cost of residential care for an elderly
person can range from $1,500 to $4,500 a month, depending
on the care needs, the quality of the accommodations and
the location of the facility.
Admission Agreements
California Statute provides that an admission agreement
contract between an RCFE and a resident shall include all
documents that a resident or responsible person must sign
at the time of, or as a condition of, admission into an
RCFE.
Specifically, the admission agreement includes, among other
requirements:
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(a) A comprehensive description of any items and
services provided under a single fee, such as a
monthly fee for room, board, and other items and
services.
(b) A comprehensive description of, and the fee
schedule for, all items and services not included in a
single fee. In addition, the agreement shall indicate
that the resident shall receive a monthly statement
itemizing all separate charges incurred by the
resident.
(c) A comprehensive description of billing and payment
policies and procedures.
(d) The facility's policy concerning refunds.
(e) Conditions under which the agreement may be
terminated.
According to the author, there is currently no statutory
prohibition on RCFEs requiring a cancellation notice even
in cases where a resident has passed away, provided the
policy is disclosed and agreed to in writing in the
admission agreement.
California Regulations
California regulation states that "the admission agreement
shall be automatically terminated by the death of the
resident, whose relatives shall not be liable for any
payment beyond that due at the date of death, unless agreed
to in writing or ordered by the court." (MPP CCL Title 22,
Title 22, Division 6, Chapter 8 § 87507)
While this legislation would largely codify the state
regulation that requires admission agreements to be
terminated at the date of death, it would not permit any
exceptions, such as orders by the court.
Prior Legislation
AB 1142 (Chesbro, 2011) was substantively similar
legislation. It addressed the termination of the admissions
agreement and prohibited the assessment of fees after all
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personal property was removed from the RCFE. The bill was
held without hearing in Senate Human Services.
PRIOR VOTES
Assembly Floor: 76 - 0
Assembly Appropriations: 7 - 0
Assembly Human Services: 7 - 0
POSITIONS
Support: California Assisted Living Association
(CALA) (sponsor)
Alzheimer's Association
AARP
California Advocates for Nursing Home Reform
(CANHR)
California Assisted Living Association
California Association for Health Services
at Home
California School Employees Association,
AFL-CIO
County Welfare Directors Association of
California (CWDA)
Oppose: None received
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