BILL ANALYSIS �
AB 1751
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Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Mariko Yamada, Chair
AB 1751 (Bloom) - As Amended: March 26, 2014
SUBJECT : Continuing Care Retirement Community (CCRC) governing
bodies.
SUMMARY : Increases the number of resident members on a CCRC
governing body and extends voting powers to those members;
requires quarterly distribution and internet posting of
financial statements. Specifically, this bill :
1)Requires a CCRC provider to provide quarterly, rather than
semi-annual, financial statements of activities comparing
actual costs against budgeted costs broken down by expense
category.
2)Requires written explanations of significant budget variations
within those financial statements.
3)Requires annual reports be posted on an internet website
administered by the CCRC.
4)Requires a single facility CCRC governing body to accept a
minimum of three residents, or a number equal to 25 percent of
the number of members on the governing board, as voting
members of the governing board, in addition to the current
requirement that at least one resident be a non-voting member
of the board.
5)Requires a multi-facility governing body to have at least
three residents from any of the facilities, or a number of
residents equal to 25 percent of the governing board,
whichever is greater, to participate as voting members, and to
provide those CCRCs without direct representation meeting
notices, material and minutes from board meetings.
6)Requires multi-facility providers to assure that meeting
notices, packets, minutes and other material of a
multi-facility governing body are provided to resident
associations or each facility.
7)Allows resident representatives to be present during Executive
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Session of the governing board.
EXISTING LAW :
1)Under the Residential Care Facilities for the Elderly (RCFE)
Act, provides for the licensure and regulation of RCFEs by the
Department of Social Services (DSS).
2)Provides for the regulation by DSS of activities relating to
continuing care contracts that govern care provided to an
elderly resident in a CCRC for the duration of the resident's
life, or a term in excess of one year.
3)Requires a CCRC provider to receive a certificate of authority
from the DSS in order to enter into such contracts.
4)Sets forth particular rights to which a resident of a CCRC is
entitled, in addition to any otherwise applicable civil or
legal rights, benefits or privileges, including, among others,
the right to live in an attractive, safe and well maintained
physical environment, and the right to organize and
participate freely in the operation of resident associations.
5)Finds and declares that residents of continuing care
retirement communities have a unique and valuable perspective
on the operations of and services provided in the community in
which they live; that resident input into decisions made by
the provider is an important factor in creating an environment
of cooperation, reducing conflict, and ensuring timely
response and resolution to issues that may arise; and that
continuing care retirement communities are strengthened when
residents know that their views are heard and respected.
6)Encourages continuing care retirement communities to exceed
the minimum resident participation requirements.
7)Requires the governing body of a CCRC to hold at least
semiannual meetings with the residents for the purpose of the
free discussion of income and expenditures, financial trends,
and issues related to proposed changes in policies, programs,
and services.
8)Requires each provider to make available financial statements
comparing actual costs to budgeted costs broken down by
expense category, and to consult with the residents during
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budget planning processes.
9)Requires the governing body of a single facility CCRC to
accept at least one resident of the continuing care retirement
community it operates to participate as a nonvoting resident
representative to the provider's governing body.
10)Requires multi-facility CCRCs to have either one non-voting
member of the governing body for each CCRC in the state, or
have an elected committee composed of residents nominate at
least one individual for every three (or fraction therefore)
CCRCs operated in the state, and inform resident associations
of facilities without direct representation of meeting
notices, material, and minutes from board meetings.
FISCAL EFFECT : Unknown
COMMENTS :
Background on Continuing Care Retirement Communities :
CCRCs offer a long-term continuing care contract with
prospective residents that provides housing, residential
services and nursing care, usually in one location, and usually
for a resident's lifetime. Most, but not all, CCRCs provide
three levels of care: independent living, assisted living, and
skilled nursing care. A resident may begin in the independent
living mode, but move to a higher level of care as his or her
mental or medical condition declines, and they become more
dependent upon others. Some CCRCs contract with a separate
entity to provide assisted living and skilled nursing in a
"health center" located within the CCRC. CCRCs largely offer
services to persons who have the means to invest a significant
sum in an entrance or admission fee. These fees commonly range
into the hundreds of thousands of dollars. CCRCs can be
not-for-profit, or for-profit entities. Not-for-profit
organizations often have philanthropic missions to serve older
adults across the economic spectrum and at various life-stages,
and many provide and/or develop low-income housing options,
promote wellness through their community-based programs, and
fundraise to provide charity care when residents exhaust their
funds.
The entire facility is licensed as an RCFE by the Community Care
Licensing Division (CCLD) of DSS, and, separately, receives a
Certificate of Authority from the Continuing Care Contracts
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Branch (CCCB) of DSS. The Continuing Care Contracts Branch
(Branch) enforces the Health and Safety Code, statutes governing
continuing care providers. The Branch is responsible for
evaluating the performance and financial health of providers to
monitor their financial position and ability to fulfill their
contractual obligations to the residents. This is accomplished
by among other things, monitoring economic and marketing
feasibility for all new developments; reviewing annual audited
financial statements and reserve reports to ensure continuing
care providers establish required reserves; reviewing financial
transactions that result in an encumbrance or lien on the
continuing care retirement community property or its revenues;
monitoring continuing care providers with potential financial
problems; reviewing continuing care contracts for compliance
with the statutes; and ensuring that disclosure of basic
information about continuing care providers is distributed.
Additionally, if a skilled nursing facility is operating on the
CCRC premises, it must be licensed by DPH. Generally, CCLD
administers and enforces rules relating to health and safety,
and the CCCB focuses on financial and contractual matters.
Residents pay a significant sum to live in a CCRC yet have only
limited input into the financial decision-making of the board
that governs it. Residents have, in the past, expressed
concerns about decisions to expand, buy, build new facilities,
and other activities that could result in higher fees. Some
residents are fearful that if fees become too high, they will
deplete their own funds, limiting their ability to control their
lives.
Author's Statement: "As the population of elderly Californians
grows, it is essential that an effective and fair infrastructure
of care is created to meet the increasing needs of the aging
population. Almost 20,000 California seniors currently reside
in the state's nearly 100 Continuing Care Residential
Communities (CCRC). CCRC's provide seniors with a variety of
housing options and a continuum of care to meet the ongoing
needs of aging, including independent living, supported or
assisted living, short or long term nursing care, and memory
support or special care. CCRCs are attractive to many seniors
because they offer the opportunity to receive services in their
homes and age in place.
"Under current law, the governing board of a CCRC is only
required to admit one non-voting resident member. This means
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that major decisions about the future of the community are made
almost entirely without resident consent. Furthermore, CCRC
administrators are only required to provide financial statements
of activities to residents semiannually. Many residents pay
hundreds of thousands of dollars of their lifesavings to join
CCRCs and they deserve representation and accountability that is
reflective of their investment. AB 1751 allows CCRC residents
to more effectively engage with the management of their
communities by ensuring they are properly represented on CCRC
boards. The bill requires provider boards to admit three voting
resident members or a number of residents equal to 25% of the
board. Additionally, the bill encourages CCRCs to be more
finically accountable to their residents by requiring them to
release financial reports quarterly and post their annual
statements online. Releasing these quarterly statements will
allow residents to stay appraised on the fiscal health of their
communities. Furthermore, access to this important financial
information will help seniors make informed choices regarding
the sustainability of CCRCs they are considering relocating
too."
Supporters Argue :
The California Continuing Care Residents Association (CalCRA),
an organization whose primary mission is to ensure that the
legal and contractual commitments of providers with respect to
residents are protected and promoted, states that AB 1751 helps
residents of continuing care retirement communities protect
their investments, and engage meaningfully in their communities.
According to CalCRA, AB 1751 does so by providing fair and
equal representation on provider boards and by making financial
information available to residents to help ensure that the
resident continues to make healthy decisions about their
investment in the CCRC.
The California Advocates for Nursing Home Reform states that
under present statute, residents of CCRCs have no rights, to be
represented as full voting members on providers' boards of
directors; their representation is only advisory in nature.
CANHR identifies a variety of California CCRCs that already have
voluntarily histories of voting representation of residents on
their boards.
The Consumer Federation of California writes in support of the
prospect of residents having the same authority to place items
on CCRC board agendas as those board members who do not live at
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the facility.
Donna Ambrogi, founder of the California Law Center on Long-term
Care who has served for six years as a voting member of a CCRC,
states CCRC residents who are full members of the board with the
right to vote, are in the best position to voice the concerns of
residents and to work collaboratively with other board members
to ensure the future viability of the community.
Opponents Argue :
Multiple CCRCs wrote to express opposition with provisions of AB
1751 relating to the selection of residents to serve on the
governing boards of the facility. Opponents argue that placing
residents on the governing board is a violation of the
California Corporations Statute that govern non-profit board
activities, relating to self-dealing.
LeadingAge, a statewide organization which represents hundreds
of providers of not-for-profit senior residential care options
serving over 100,000 older Californians throughout the state
expresses concern that AB 1751 mandates the appointment of up to
25 percent of a governing board's membership which would set an
onerous precedent because residents could have conflicts of
interest on matters coming before the board, particularly
regarding their fees, and would have to disqualify themselves
from participating in major decisions. Corporate and
organizational activities of boards-of-directors require skill,
knowledge and commitment, therefore, the board itself should
have latitude on who to allow to serve on such entities.
Previous Legislation :
AB 827 (Speier), Chapter 920, Statutes of 1995, established the
Department of Social Services as the regulator of CCRCs and
required minimum standards in continuing care contracts.
SB 309 (Ortiz), Chapter 553, Statutes of 2002, added non-voting
resident representatives to a CCRC governing board.
REGISTERED SUPPORT / OPPOSITION :
Support
California Continuing Care Residents Association-Sponsor
California Advocates for Nursing Home Reform (CANHR)
AB 1751
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California Communities United Institute
California Senior Legislature
Consumer Federation of California
National Association of Social Workers (NASW)-California Chapter
One individual.
Opposition
American Baptist Homes of the West - Oppose Unless Amended
Atherton Baptist Homes - Oppose Unless Amended
be.group - Oppose Unless Amended
California Association of Continuing Care Retirement
Communities-Oppose Unless Amended
Carlsbad by the Sea - Oppose Unless Amended
Carmel Valley Manor - Oppose Unless Amended
Casa de las Campanas - Oppose Unless Amended
Casa de Manana - Oppose Unless Amended
Fredericka Manor - Oppose Unless Amended
front porch - Oppose Unless Amended
Heritage on the Marina - Oppose Unless Amended
LeadingAge California - Oppose Unless Amended
Monte Vista Grove Homes - Oppose Unless Amended
O'Connor Woods - Oppose Unless Amended
Paradise Valley Estates
Retirement Housing Foundation - Oppose Unless Amended
Analysis Prepared by : Robert MacLaughlin / AGING & L.T.C. /
(916) 319-3990