| Proposed Standard | Purpose and Rationale | Link to Model Law |
Elaboration (if any) |
| Governance |
CCRC provider Boards of Directors should balance the interests of residents with those of other stakeholders,
including executives and employees, in keeping with the purpose and
well-being of the enterprise and the composition of the
Board should reflect this balance. |
Model CCRC Governance Act | Click here for a lively, impromptu discussion among a group of residents on this topic. |
| Financial Guarantee |
Residents of CCRCs should have the same financial protection
in the event of provider impairment as that which life and
annuity insurance policyholders already have. This
requires legislation like that proposed here which is
adapted from the insurance precedent. |
Model Financial Guarantee Act | |
| Financial Responsibility |
Some contracts leave more of
the future financial risk with residents than do others.
Entering residents are expected to have sufficient assets
(in addition to any Entrance Fees) or other guarantees to
ensure that they can pay future provider fees as they come
due and that resident asset threshold is higher when
providers shift risk to residents. This standard and
model law establishes benchmarks to ensure that entering
residents who do not have care-inclusive (Type A) contracts
can afford the added risk they thereby assume. |
Model Financial Responsibility Act | |
| CCRC Fiduciary Act |
Residents in CCRCs and participants in Continuing Care at
Home (CCAH) programs constitute a class of elderly citizens
who are often more vulnerable and gullible than are younger
people in the prime of life. Accordingly, those who
serve this class should be held to a high standard of duty
and conduct. |
Model CCRC Fiduciary Act | |
| Financial Viability and Rehabilitation Act |
Residents in CCRCs and participants in Continuing Care at
Home (CCAH) programs are particularly vulnerable to provider
financial impairment and other impacts and should have
protections similar to those accorded to insurance company
policyholders. This resident protection requires legislation like that proposed
here which is adapted from the insurance precedent. |
Model Financial Viability and Rehabilitation Act | |
| CCRC Standard Valuation | In
order for there to be some assurance that funding for
deferred services promised to CCRC residents -- in return for
current payments including Entrance Fees -- will be there later when needed, it is
important that such commitments be valued currently together
with projections of expected future income. For
insurance companies analogous valuations are conducted by
actuaries. This standard extends to CCRCs a similar
standard for financial integrity. This requires
legislation like that proposed here which is adapted from
the insurance precedent. |
Model CCRC Standard Valuation Act | |
| Prepaid Medical Reserve |
Many CCRCs advise their residents that a portion of their
Entrance Fees may be currently tax deductible as prepaid medical expenses. There
is not now, however, any requirement that those funds be
earmarked for the intended purpose. This places the related tax deductions
in jeopardy. This standard calls for the CCRC
to establish a reserve item for amounts designated for
prepaid medical expenses to ensure that such amounts are in
fact used for that purpose. |
Model Prepaid Medical Reserve Act | |
| Investment Regulation |
Entrance Fee Continuing Care Contracts like single premium
annuities bring in cash in return for long deferred
promises. That requires trust and prudence in the
investment of funds. Of course, investment in the
Continuing Care facility itself is an appropriate
investment, assuming that the facility is operated to ensure
a fair investment return. Insurance companies have long had
regulated investments to avoid speculative investments that
can undermine their risk averse mission. This Model Law
extends similar investment protections to Continuing Care
contract holders that life and annuity insurance
policyholders already have. |
Model CCRC Investment Act | |
| Nonforfeiture |
There is no required correlation currently between
Continuing Care Contract forfeiture provisions and the value
of the services provided thereunder. This standard
would correct that imbalance. There has also been
controversy about a widespread industry practice in which
payments of promised refund or death benefits are dependent
on successor residents. This has led to delays in the
payments of funds and denial by providers of liability
for promised refunds. This standard would apply to
CCRCs nonforfeiture principles comparable to those that have
long applied to the life and annuity insurance industry. The
legislation modeled here is adapted from the insurance
precedent. |
Model CCRC Standard Nonforfeiture Act | Click here for further explanation. |
| Contracts |
Continuing Care Contracts are now written by providers and
must be accepted before a person eligible for residence is
allowed to move in. The result is that some contracts are
one sided and there is a need to balance the interests of
residents with those of the executives and of the enterprise
which they lead. Moreover, Continuing Care Contracts
can be quite complex and difficult for ordinarily educated
people to understand. This can lead to confusion and
disappointment. The standard proposed in the
accompanying model law applies to Continuing Care Contracts
concepts analogous to those governing life and annuity
insurance contracts. |
Model CCRC/CCAH Standard Contract Provisions Law | |
| Transfers |
Some CCRCs penalize internal transfers by only crediting a
transferring resident with the Entrance Fee originally paid
for the apartment relinquished and then reselling that same
apartment at current market Entrance Fee rates. This
discourages internal transfers which can be positive in
allowing a resident to adapt to the losses that inevitably
accompany aging. This standard and model law
encourages transfers as an adaptive mechanism. |
Model CCRC Transfer Act | |
| Continuing Care at Home |
There is a movement to encourage Continuing Care at Home
(CCAH) programs as an adjunct to CCRCs or in place of CCRC
residence. By their nature such programs involve more
enterprise risk than do brick and mortar CCRCs, and they
verge on becoming very liberal long term care insurance, but
without the regulatory oversight applicable to insurance.
This standard would limit such programs to what is
reasonable given the constructive purposes that such CCAH
programs can meet. |
Model Continuing Care at Home Authorization Act | Video Discussion of Continung Care at Home at a NaCCRA Meeting |
| Conversion to Enable Resident Ownership |
A few CCRCs have an ownership model. The condominium
form, which involves fee simple ownership, creates transfer
delays and difficulties at the death of a resident.
These difficulties can be avoided with specifically tailored
cooperative ownership models. Moreover, such models
can enable the gradual conversion of existing CCRCs to an
ownership model that is more compatible with the large
Entrance Fees that are often required. Existing
residents can retain their existing arrangements for life if
they wish, while those residents who choose ownership, and
new residents who may prefer ownership, can purchase an
commensurate interest in the cooperative corporation
together
with a lifetime lease to occupy a specified unit. This
law is adapted from laws that have allowed New York City
apartments to convert from rental to cooperative ownership. |
Model CCRC Cooperative Conversion Law |
Click here for
an Explanatory Paper. Many residents of Entrance Fee CCRCs are confused about Ownership. Click here for a discussion by Bob Nagele of Connecticut of this confusion. |
| Self-Certification |
Highly detailed, reactive regulatory requirements for
advance approval of facilities etc. inhibit providers
responsiveness to changing needs and run up costs, though
they are intended as a protection for the public. Since
capital investment often lies fallow awaiting inspection or
approval, excess regulation involves considerable cost for
providers which drives up the cost of housing and services
provided for the aging. Regulation also inhibits
innovation which might otherwise improve the services
offered. Such oversight, approval, and inspection is redundant for the most responsible providers who are regularly voluntarily in compliance with all requirements. This legislation would allow a provider to earn a Trusted status facilitating the certification and inspection process by allowing self-certification for those providers who achieve and maintain an exemplary record. While this legislation is proposed at the state level, Federal legislation is also involved because of Federal oversight of Medicare, Medicaid and the Patient Protection and Affordable Care Act of 2010. |
Model CCRC Self-Certification Act | |
| Federal Trusted Provider Status |
Because CCRCs are subject to oversight by the Federal
Centers for Medicare and Medicaid and other Federal Agencies,
Federal legislation is needed to fully implement a targeted
oversight program allowing responsible providers to earn
Trusted Status. Accordingly this model Federal
enactment is included in this portfolio of proposed
standards and legislation. |
Model Federal Trusted Providers Act | |
| Federal End of Life Palliation |
Once it is clear that the end of life is approaching, care
needs shift from restoration to comfort. Recent
hospice legislation has moved in this direction. The
model law suggested here would clarify personal rights of
choice as life's end approaches. |
Model Federal End of Life Palliation Act |
| Walt Boyer: Financial Soundness Committee and
Review of the Standards and Model Laws |
Questions and Answers for Financial Soundness Committee
Chair, Walt Boyer |
| Reverend Bob
Nicholson responds to Walt Boyer's presentation of the Model Laws |
Walt Boyer reports on the Model Laws |