Bill Text: GA SB166 | 2011-2012 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Insurance; extensively revise the requirements for continuing care providers/facilities
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2011-07-01 - Effective Date [SB166 Detail]
Download: Georgia-2011-SB166-Introduced.html
Bill Title: Insurance; extensively revise the requirements for continuing care providers/facilities
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2011-07-01 - Effective Date [SB166 Detail]
Download: Georgia-2011-SB166-Introduced.html
11 LC
21 1127ER
Senate
Bill 166
By:
Senators Stone of the 23rd, Mullis of the 53rd and Jeffares of the 17th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 33 of the Official Code of Georgia Annotated, relating to insurance,
so as to extensively revise the requirements for continuing care providers and
facilities; to revise definitions; to provide for enforcement powers of the
Commissioner of Insurance; to revise provisions relating to annual disclosure
statements; to revise requirements for continuing care agreements; to provide
extensive requirements for disclosure statements; to provide for specific
financial requirements; to provide for supervision, rehabilitation, and
liquidation of a continuing care provider facility; to revise provisions
relating to penalties for violations; to provide for related matters; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
33 of the Official Code of Georgia Annotated, relating to insurance, is amended
by revising Chapter 45, relating to continuing care providers and facilities, as
follows:
"CHAPTER
45
33-45-1.
As
used in this chapter, the term:
(1)
'Continuing care' or 'care' means furnishing pursuant to an agreement
shelter,
lodging that
is not in a skilled nursing facility as defined in paragraph (34) of Code
Section 31-6-2, an intermediate care facility as defined in paragraph (22) of
Code Section 31-6-2, or a personal care home as defined in Code Section
31-7-12;
food,;
and
either
nursing care
or personal
services, whether such nursing care
or personal
services are
is
provided in the facility or in another setting designated by the agreement for
continuing care, to an individual not related by consanguinity or affinity to
the provider furnishing such care upon payment of an entrance fee.
Other
personal services provided shall be designated in the continuing care agreement.
Agreements to provide continuing care include agreements to provide care for any
duration, including agreements that are terminable by either party.
(2)
'Continuing care agreement' means a contract or agreement to provide continuing
care or limited continuing care. Agreements to provide continuing care or
limited continuing care include agreements to provide care for any duration,
including agreements that are terminable by either party.
(2)(3)
'Entrance fee' means an initial or deferred payment of a sum of money or
property made as full or partial payment to assure the resident
a place in
a facility
continuing
care or limited continuing care; provided, however, that any such initial or
deferred payment which is greater than or equal to 12 times the monthly care fee
shall be presumed to be an entrance fee so long as such payment is intended to
be a full or partial payment to assure the resident lodging in a residential
unit. An accommodation fee, admission
fee, or other fee of similar form and application
greater than
or equal to 12 times the monthly care fee
shall be considered to be an entrance fee.
(3)(4)
'Facility' means a place in which it is undertaken to provide continuing care
or limited
continuing care.
(4)(5)
'Licensed' means that the provider has obtained a certificate of authority from
the department.
(6)
'Limited continuing care' means furnishing pursuant to an agreement lodging that
is not in a skilled nursing facility as defined in paragraph (34) of Code
Section 31-6-2, an intermediate care facility as defined in paragraph (22) of
Code Section 31-6-2, or a personal care home as defined in Code Section 31-7-12;
food; and personal services, whether such personal services are provided in a
facility such as a personal care home or in another setting designated by the
continuing care agreement, to an individual not related by consanguinity or
affinity to the provider furnishing such care upon payment of an entrance
fee.
(7)
'Monthly care fee' means the fee charged to a resident for continuing care or
limited continuing care on a monthly or periodic basis. Monthly care fees may
be increased by the provider to provide care to the resident as outlined in the
continuing care agreement. Periodic fee payments or other prepayments shall not
be monthly care fees.
(8)
'Nursing care' means services which are provided to residents of skilled nursing
facilities or intermediate care facilities.
(5)(9)
'Personal services' means, but is not limited to, such services
as:
individual assistance with eating, bathing, grooming, dressing, ambulation, and
housekeeping; supervision of self-administered medication; arrangement for or
provision of social and leisure services; arrangement for appropriate medical,
dental, nursing, or mental health services; and other similar services which the
department may define.
'Personal
services'
shall not be construed to mean the provision of medical, nursing, dental, or
mental health services by the staff of a facility.
Personal
services provided, if any, shall be designated in the continuing care
agreement.
(6)(10)
'Provider' means the owner or operator, whether a natural person, partnership,
or other unincorporated association, however organized, trust, or
corporation,
of an institution, building, residence, or other place, whether operated for
profit or not, which owner or operator undertakes to provide continuing care
or limited
continuing care for a fixed or variable
fee, or for any other remuneration of any type, whether fixed or variable, for
the period of care, payable in a lump sum or lump sum and monthly maintenance
charges or in installments.
(7)(11)
'Resident' means a purchaser of or a nominee of or a subscriber to a continuing
care agreement. Such an agreement
may
shall
not be construed to give the resident a part ownership of the facility in which
the resident is to reside unless expressly provided for in the
agreement.
(12)
'Residential unit' means a residence or apartment in which a resident lives that
is not a skilled nursing facility as defined in paragraph (34) of Code Section
31-6-2, an intermediate care facility as defined in paragraph (22) of Code
Section 31-6-2, or a personal care home as defined in Code Section
31-7-12.
33-45-2.
Except
as provided in this chapter, providers of continuing care facilities shall be
governed by the provisions of this chapter and shall be exempt from all other
provisions of this title.
(a) For the
purpose of enforcing the requirements of this chapter, the Commissioner and the
department shall be authorized to use the powers granted in Chapters 1 and 2 of
this title.
(b)
A provider or facility which charges a resident an entrance fee for lodging in a
residential unit and provides limited continuing care shall not call itself nor
be considered a provider of continuing care, but such provider or facility shall
otherwise be subject to the requirements imposed upon the providers and
facilities regulated by this chapter; provided, however, that a facility that
has received a certificate of authority and has been in conformance with the
provisions of this chapter prior to July 1, 2011, may continue to call and
present itself to the public as a provider of continuing care.
33-45-3.
Nothing
in this title or chapter shall be deemed to authorize any provider of a
continuing care facility
or a facility
providing limited continuing care to
transact any insurance business other than that of continuing care insurance or
limited
continuing care insurance or otherwise to
engage in any other type of insurance unless it is authorized under a
certificate of authority issued by the department under this title. Nothing in
this chapter shall be construed so as to interfere with the jurisdiction of the
Department of Community Health or any other regulatory body exercising authority
over continuing care providers
or limited
continuing care providers regulated by this
chapter.
33-45-4.
The
administration of this chapter is vested in the department, which
shall:
(1)
Prepare and furnish all forms necessary under the provisions of this
chapter;
(2)
Collect in advance, and the applicant shall pay in
advance,
at the time of
filing, a fee for an application for a certificate of authority or a renewal of
a certificate of authority, both as provided in Code Section 33-8-1, and a late
fee to be determined by the department. The department may also levy a fine not
to exceed $50.00 a day for each day of noncompliance;
and
the
following fees:
(A)
At the time of filing an application for a certificate of authority, an
application fee as provided in Code Section 33-8-1 for each
facility;
(B)
At the time of renewal of a certificate of authority, a renewal fee as provided
in Code Section 33-8-1 for each year or part thereof for each facility where
continuing care is provided; and
(C)
A late fee in an amount equal to 50 percent of the renewal fee in effect on the
last preceding regular renewal date. In addition to any other penalty that may
be provided for under this chapter, the department may levy a fine not to exceed
$50.00 a day for each day of noncompliance;
(3)
Adopt rules, within the standards of this chapter, necessary to effect the
purposes of this chapter. Specific provisions in this chapter relating to any
subject shall not preclude the department from adopting rules concerning such
subject if such rules are within the standards and purposes of this
chapter;.
(4)
Adopt rules, within the standards of this chapter, to set a bond conditioned
upon compliance with the provisions of this chapter. The amount of the bond
shall be not less than $10,000.00. The rules adopted by the department shall
provide for consideration of the obligations, financial condition, amounts of
debt, service provisions, and such other features as deemed pertinent and
applicable to the determination of a sufficient bond amount; and
(5)
Impose administrative fines and penalties pursuant to this chapter.
33-45-5.
No
person may engage in the business of providing continuing care or
limited
continuing care or issuing continuing care
agreements in this state without a certificate of authority therefor obtained
from the department as provided in this chapter.
For purposes
of this Code section, the term 'engage in the business of' shall include the
development or construction of a facility subject to regulation under this
chapter or the holding of oneself out to the public as a
provider. The application for approval or
renewal of a certificate of authority shall be on such forms as provided by the
department. The department shall issue such certificate of authority if the
applicant pays the required
fees,
and the continuing care agreement for the applicant meets the requirements of
Code Section 33-45-7. The department shall renew a certificate of authority if
the provider pays the required fees and furnishes the annual
disclosure
statements required by Code Section 33-45-6 and is otherwise not in violation of
this chapter.
33-45-6.
(a)
Annually, on or before
May
1
June
1, the provider shall file
an
annual
a revised
disclosure statement and such other
information and data showing its condition as of the last day of the preceding
calendar year or fiscal year of the provider. If the department does not
receive the required information on or before
May 1 or
within 120 days after the last day of the fiscal year of the
provider,
June
1, a late fee may be charged
pursuant to
Code Section 33-45-4. The department may
approve an extension of up to 30 days.
(b)(1)
The provider shall also make the revised disclosure statement available to all
the residents of the facility.
(2)
A provider shall also revise its disclosure statement and have the revised
disclosure statement recorded at any other time if revision is necessary to
prevent an otherwise current disclosure statement from containing a material
misstatement of fact or omitting a material fact required to be stated therein.
Only the most recently recorded disclosure statement, with respect to a
facility, and in any event, only a disclosure statement dated within one year
plus 120 days prior to the due date of the time of renewal of a certificate of
authority required by this chapter, shall be considered current.
(b)
The annual statement shall be in such form as the department prescribes and
shall contain at least the following:
(1)
Financial statements audited by an independent certified public accountant,
which shall contain, for two or more fiscal years if the facility has been in
existence that long, the following:
(A)
An accountant's opinion and, in accordance with generally accepted accounting
principles:
(I)
A balance sheet;
(ii)
A statement of income and expenses;
(iii)
A statement of equity or fund balances; and
(iv)
A statement of changes in financial position; and
(B)
Notes to the financial statements considered customary or necessary for full
disclosure or adequate understanding of the financial statements, financial
condition, and operation;
(2)
The following financial information:
(A)
A schedule giving additional information relating to property, plant, and
equipment having an original cost of at least $25,000.00 so as to show in
reasonable detail with respect to each separate facility original costs,
accumulated depreciation, net book value, appraised value or insurable value and
date thereof, insurance coverage, encumbrances, and net equity of appraised or
insured value over encumbrances. Any property not used in continuing care shall
be shown separately from property used in continuing care;
(B)
The level of participation in medicare or Medicaid programs, or
both;
(C)
A statement of all fees required of residents including, but not limited to, a
statement of the entrance fee charged, the monthly service charges, the proposed
application of the proceeds of the entrance fee by the provider, and the plan by
which the amount of the entrance fee is determined if the entrance fee is not
the same in all cases; and
(D)
Any change or increase in fees when the provider changes either the scope of, or
the rates for, care or services, regardless of whether the change involves the
basic rate or only those services available at additional costs to the resident;
and
(3)(c)
If the
provider is an individual, the annual statement shall be sworn to by the
individual; if a limited partnership, by the general partner; if a partnership
other than a limited partnership, by all the partners; if any other
unincorporated association, by all its members or officers and directors; if a
trust, by all its trustees and officers; and, if a corporation, by the president
and secretary thereof.
Notwithstanding
the provisions of Code Section 33-45-9, the Commissioner may require a provider
to submit such other information as he or she deems necessary to enforce this
chapter.
33-45-7.
(a)
In addition to other provisions considered proper to effectuate any continuing
care agreement, addendum, or
amendment,
each such agreement, addendum, or amendment shall be in writing and
shall:
(1)
Provide for the continuing care
or limited
continuing care of only one resident, or
for two persons occupying space designed for double occupancy under appropriate
regulations established by the provider, and shall
state the
total consideration to be paid, including
a list all properties transferred and
their market value at the time of transfer, including donations, subscriptions,
fees, and any other amounts paid or payable by, or on behalf of, the resident or
residents;
(2)
Specify all services which are to be provided by the provider to each resident,
including, in detail, all items which each resident will receive, whether the
items will be provided for a designated time period or for life, and whether the
services will be available on the premises or at another specified location.
The provider shall indicate which services or items are included in the
agreement
for continuing care
monthly care
fee and which services or items are made
available at or by the facility at extra charge. Such items
shall
may
include, but are not limited to, food,
shelter
lodging,
personal services or nursing care, drugs, burial, and incidentals;
(3)
Describe the terms and conditions under which
an
agreement for continuing care
the continuing
care agreement may be canceled by the
provider or by a resident and the conditions, if any, under which all or any
portion of the entrance fee will be refunded in the event of cancellation of the
continuing
care agreement by the provider or by the
resident, including the effect of
death of
or any change in the health or financial
condition of a person between the date of entering
an
agreement for continuing care
a continuing
care agreement and the date of initial
occupancy of a
living
residential
unit by that person;
(4)
Describe:
(A)
The residential unit;
(B)
Any property rights of the resident;
(C)
The
the
health and financial conditions required for a person to be accepted as a
resident and to continue as a resident, once accepted, including the effect of
any change in the health or financial condition of a person between the date of
entering into a continuing care agreement and the date of taking occupancy in a
living
residential
unit;
(D)
The conditions under which a residential unit occupied by a resident may be made
available by the provider to a different or new resident other than on the death
of the prior resident;
(5)(E)
Describe
the
The policies
to be implemented and the circumstances
under which the resident will be permitted to remain in the facility in the
event of financial difficulties of the resident;
and
(F)
The procedures the provider shall follow to change the resident's accommodation
if necessary for the protection of the health or safety of the resident or of
the general and economic welfare of the facility;
(6)(5)
State the fees that will be charged if the resident marries while at the
designated facility, the terms concerning the entry of a spouse to the facility,
and the consequences if the spouse does not meet the requirements for
entry;
(7)(6)
State whether the funds or property transferred for the care of the resident
is:
(A)
Nonrefundable, in which event the
continuing
care agreement shall comply with this
subparagraph. Such
continuing
care agreement shall allow a 90 day trial
period of residency in the facility during which time the provider, resident, or
person who provided the transfer of funds or property for the care of such
resident may cancel the agreement after written notice. A refund
must
shall
be made of such funds, property, or both within 120 days after the receipt of
such notice and shall be calculated on a pro rata basis with the provider
retaining no more than 10 percent of the amount of the entry fee.
Notwithstanding the provisions of this subparagraph, the provisions of paragraph
(8)(7)
of this
subsection,
and the provisions of subsections (b) and (e) of this Code section shall apply
to nonrefundable
continuing
care agreements; or
(B)
Refundable, in which event the
continuing
care agreement shall comply with this
subparagraph. Such
continuing
care agreement may be canceled upon the
giving of written notice of cancellation of at least 30 days by the provider,
the resident, or the person who provided the transfer of property or funds for
the care of such resident; provided, however,
that
if
an
a continuing
care agreement is canceled because there
has been a good faith determination that a resident is a
danger to
that resident or to
threat to his
or her health or safety or to the health or safety
of others, only such notice as is
reasonable under the circumstances shall be required. The
continuing
care agreement shall further provide in
clear and understandable language, in print no smaller than the largest type
used in the body of the
continuing
care agreement, the terms governing the
refund of any portion of the entrance fee, which terms shall include a provision
that all refunds be made within 120 days of notification.
The moneys
refunded to the resident may be from the escrow account required by Code Section
33-45-8 or from other funds available to the provider, and the continuing care
agreement shall further comply with the following requirements:
(i)
For a resident whose
continuing
care agreement with the facility provides
that the resident does not receive a transferable membership or ownership right
in the facility and who has occupied his
or her
residential unit, the refund shall be
calculated on a pro rata basis with the facility retaining no more than 2
percent per month of occupancy by the resident and no more than a 4 percent fee
for processing. Such refund shall be paid no later than 120 days after the
giving of notice of intention to
cancel.;
or
(ii)
Alternatively,
if
If
the
contract
continuing
care agreement provides for the facility
to retain no more than 1 percent per month of occupancy by the resident, it may
provide that such refund will be payable upon receipt by the provider of the
next entrance fee for any comparable
residential
unit upon which there is no prior claim by any
resident;
provided, however, that the agreement may define the term 'comparable
residential unit upon which there is no prior claim'; specifically delineate
when such refund is due; and establish the order of priority of refunds to
residents. Unless the provisions of
subsection (e) of this Code section apply, for any prospective resident,
regardless of whether or not such
a
resident receives a transferable membership or ownership right in the facility,
who cancels the agreement prior to occupancy of the
residential
unit,
the refund shall be the entire amount paid toward the entrance fee, less a
processing fee not to exceed 4 percent of the entire entrance fee, but in no
event shall such processing fee exceed the amount paid by the prospective
resident. Such refund shall be paid no later than 60 days after the giving of
notice of intention to cancel. For a resident who has occupied his
or her
residential unit and who has received a
transferable membership or ownership right in the facility, the foregoing refund
provisions shall not apply but shall be deemed satisfied by the acquisition or
receipt of a transferable membership or an ownership right in the facility. The
provider shall not charge any fee for the transfer of membership or sale of an
ownership
right.
Nothing in this paragraph shall be construed to require a continuing care
agreement to provide a refund to more than one resident at a time upon the
vacation of a specific comparable residential
unit;
(8)(7)
State the terms under which
an
a continuing
care agreement is canceled by the death of
the resident. These terms may contain a provision that, upon the death of a
resident, the entrance fee of such resident shall be considered earned and shall
become the property of the provider. When the unit is shared, the conditions
with respect to the effect of the death or removal of one of the residents shall
be included in the
continuing
care agreement;
(9)(8)
Require:
(A)
Describe
the policies which may lead to changes in monthly recurring and nonrecurring
charges or fees for goods and services
received. The
continuing
care agreement
shall
to
provide for advance notice to the resident, of not less than 60 days, before any
change in fees or charges or the scope of care or services may be effective,
except for changes required by state or federal assistance
programs;
(B)
A description of the manner by which the provider may adjust periodic charges or
other recurring fees and the limitations on these adjustments, if any;
and
(C)
A description of any policy regarding fee adjustments if the resident is
voluntarily absent from the facility;
(10)(9)
Provide that charges for care paid in one lump sum shall not be increased or
changed during the duration of the agreed upon care, except for changes required
by state or federal assistance programs;
and
(11)
Specify whether or not the facility is, or is affiliated with, a religious,
nonprofit, or proprietary organization or management entity, the extent to which
the affiliate organization will be responsible for the financial and contractual
obligations of the provider, and the provisions of the federal Internal Revenue
Code, if any, under which the provider or affiliate is exempt from the payment
of federal income tax; and
(12)(10)
Describe the policy of the provider regarding reserve funding.
(b)
Notwithstanding
the provisions of subparagraph (a)(6)(A) of this Code section,
a
A
resident has the right to rescind a continuing care agreement, without penalty
or forfeiture, within seven days after executing
the
such
continuing care agreement. During the
seven-day period, the resident's funds shall be retained in
a
separate
an
escrow account
under terms
approved by the department
in accordance
with the provisions of subsection (a) of Code Section
33-45-8. A resident shall not be
required to move into the facility designated in the
continuing
care agreement before the expiration of
the seven-day period.
In the event
that the prospective resident exercises his or her right to rescind the
continuing care agreement within seven days of executing such continuing care
agreement, the facility shall return any portion of the entrance fee paid by the
resident within 30 days of receipt of the prospective resident's notice of
rescission.
(c)
The continuing
care agreement shall include or shall be
accompanied by a statement, printed in boldface type, which reads: 'This
facility and all
other
continuing care
facilities
agreements
in this state are regulated by Chapter 45 of Title 33 of the Official Code of
Georgia Annotated. A copy of the law is on file in this facility. The law
gives you or your legal representative the right to inspect our most recent
annual
disclosure
statement before signing the agreement.'
(d)
Before the transfer of any money or other property, other than an application
fee which shall not exceed $1,500.00, to a provider by or on behalf of a
prospective resident, the provider shall present a typewritten or printed copy
of the
continuing
care agreement
and the
disclosure statement required pursuant to Code Section
33-45-10 to the prospective resident and
all other parties to the agreement. The provider shall secure a signed, dated
statement from each party to the contract certifying that a copy of the
continuing
care agreement
with the
specified attachment as required pursuant to this
chapter
and the
disclosure statement was
received.
(e)
If a resident dies before occupying the facility or, through illness, injury, or
incapacity, is precluded from becoming a resident under the terms of the
continuing care agreement, the agreement
is
shall
be automatically canceled, and the
resident or his
or
her legal representative shall receive a
full refund of all moneys paid to the facility, except those costs specifically
incurred by the facility at the request of the resident and set forth in writing
in a separate addendum, signed by both parties, to the agreement.
(f)
In order to comply with this Code section, a provider may furnish information
not contained in the continuing care agreement through an addendum.
(g)
The Commissioner may also require the provider to submit to him or her a copy of
the continuing care agreement generally used by the provider; provided, however,
that nothing in this subsection shall prohibit the department from requiring the
submission of an individual contract between the provider and the
resident.
33-45-8.
(a)
Any portion of the entrance fee paid by a resident to the provider shall be held
in an escrow account. The escrow agreement shall state that its purpose is to
protect the resident or the prospective resident. Escrow funds may be released
to the resident, prospective resident, or provider in accordance with the
provisions of this Code section.
(b)
Entrance fees placed in escrow may be released in accordance with the provisions
of this subsection as follows:
(1)
Escrow funds may be released to the resident during or following the seven-day
right of rescission period required in subsection (b) of Code Section 33-45-7.
Such release shall be in accordance with the provisions of that Code
section;
(2)
When a continuing care agreement between a resident and provider is
nonrefundable, escrow funds or a portion thereof may be released to the resident
if the resident exercises his or her right to receive a refund as provided in
subparagraph (A) of paragraph (6) of subsection (a) of Code Section 33-45-7.
The amount and timing of the release of funds to the resident shall be in
compliance with the provisions of that subparagraph;
(3)
When the continuing care agreement between a provider and resident or
prospective resident is refundable, escrow funds may be released by the provider
to such resident or prospective resident. The amount and timing of the release
of funds to the resident shall be in compliance with the provisions of
subparagraph (B) of paragraph (6) of subsection (a) of Code Section
33-45-7;
(4)
For a facility under construction or in development, escrow funds may be
released to the provider when:
(A)
The provider has presold at least 50 percent of the residential units, having
received a minimum 10 percent deposit on each of the presold residential
units;
(B)
The provider has received a commitment for any first mortgage loan or other
financing, and any conditions of the commitment prior to disbursement of funds
thereunder have been substantially satisfied; and
(C)
Aggregate entrance fees received or receivable by the provider pursuant to
binding continuing care agreements, plus the anticipated proceeds of any first
mortgage loan or other financing commitment, are equal to not less than 90
percent of the aggregate cost of constructing or purchasing, equipping, and
furnishing the facility, and not less than 90 percent of the funds estimated in
the statement of cash flows submitted by the provider as that part of the
disclosure statement required by this chapter, to be necessary to fund start-up
losses and assure full performance of the obligations of the provider pursuant
to continuing care contracts shall be on hand;
(5)
At the time a new project is financed or after the opening of a facility by a
provider, escrow funds may be released to the provider, so long as the provider
is in compliance with the financial reserves required by Code Section 33-45-11
and sufficient funds are maintained in escrow to meet the provider's obligations
under subparagraphs (1) and (2) of this subsection; or
(6)
Escrow funds may be released to the provider under terms submitted to and
approved by the Commissioner.
33-45-9.
No
act, agreement, or statement of any resident, or of an individual purchasing
continuing
care or limited continuing care for a
resident, under any
continuing
care agreement to furnish care to the
resident shall constitute a valid waiver of any provision of this chapter
intended for the benefit or protection of the resident or the individual
purchasing care for the
resident;
provided, however, that nothing in this Code section shall be construed to
prohibit a continuing care agreement from providing for a resident or
prospective resident to agree to arbitration prior to bringing any action
pursuant to Code Section
33-45-12.
33-45-9.33-45-10.
(a)
Each facility shall maintain as public information, available upon request,
all
annual
a copy of its
current disclosure statement and the disclosure and all previous
disclosure statements that have been filed
with the department.
(b)
Each facility shall post in a prominent position in the facility so as to be
accessible to all residents and to the general public a
brief
summary of the
latest
annual
disclosure
statement
required
pursuant to subsection (a) of this Code
section, indicating in the summary where
the full
annual
disclosure
statement may be inspected in the facility. A listing of any proposed changes
in policies, programs, and services shall also be posted.
(c)
Before entering into
an
a continuing
care agreement to furnish continuing care
or at the time
of, or prior to, the transfer of any money or other property to a provider by or
on behalf of a prospective resident, whichever occurs
first, the provider undertaking to furnish
the care, or the agent of the provider, shall
make full
disclosure and provide
the current
disclosure statement required pursuant to subsection (a) of this Code section
and copies to the prospective resident, or
his or
her legal representative, of the
continuing
care agreement
to furnish
continuing care.
(d)
The text of the disclosure statement required by this Code section shall contain
at least:
(1)
The name and business address of the provider and a statement as to whether the
provider is a partnership, corporation, or other type of legal
entity;
(2)
The names and business addresses and description of the business experience of
the person, if any, in the operation or management of similar facilities of the
officers, directors, trustees, managing or general partners, any person having a
10 percent or greater equity or beneficial interest in the provider, and any
person who will be managing the facility on a day to day basis and a description
of these persons' interests in or occupations with the provider;
(3)
Information on all persons named in response to paragraph (2) of this subsection
which details:
(A)
Any conflict or potential conflict of interest; and
(B)
Any relevant criminal record, including a plea of nolo contendere, background
on relevant civil judicial proceedings, and relevant action brought by a
governmental agency or department, if the order or action arose out of or
related to business activity of health care;
(4)
A statement as to whether the provider is or is not affiliated with a religious,
charitable, or other nonprofit organization; the extent of the affiliation, if
any; the extent to which the affiliate organization will be responsible for the
financial and contract obligations of the provider; and the provision of the
Federal Internal Revenue Code, if any, under which the provider or affiliate is
exempt from the payment of income tax;
(5)
An estimate of the number of residents of the facility to be provided
services;
(6)
The location and description of the physical property or properties of the
facility, existing or proposed, and to the extent proposed, the estimated
completion date or dates, whether construction has begun, and the contingencies
subject to which construction may be deferred;
(7)
The location of other facilities, if any, which the provider owns or
operates;
(8)
A statement that the provider maintains financial reserves in conformance with
the requirements of Code Section 33-45-11 or otherwise meets the requirements of
that Code section; the provisions that the provider has made or will make to
provide reserve funding or security to enable the provider to perform its
obligations fully under continuing care agreements to provide continuing care or
limited continuing care at the facility, including the establishment of escrow
accounts, trusts, or reserve funds, together with the manner in which these
funds will be invested; and the names and experience of any individuals in the
direct employment of the provider who will make the investment
decisions;
(9)
A financial statement audited by an independent certified public accountant
which shall provide the information required by this Code section for two or
more fiscal years if the facility has been in existence that long. If the
facility has been in existence for a lesser length of time, the financial
statements of the provider shall be for the most recent fiscal year or such
shorter period of time as the provider shall have been in existence. If the
provider's fiscal year ended more than 120 days prior to the date the disclosure
statement is recorded, interim financial statements as of a date not more than
90 days prior to the date of recording the statement shall also be included but
need not be certified to by an independent certified public accountant. The
financial statement shall contain the following:
(A)
An accountant's opinion and, in accordance with generally accepted accounting
principles:
(i)
A balance sheet;
(ii)
A statement of income and expenses;
(iii)
A statement of equity or fund balances; and
(iv)
A statement of changes in financial position; and
(B)
Notes to the financial statements considered customary or necessary for full
disclosure or adequate understanding of the financial statements, financial
condition, and operation and additional costs to the resident;
(10)
The level of participation in medicare or Medicaid programs, or both;
and
(11)
A statement concerning all fees required of residents, including, but not
limited to:
(A)
A statement of the entrance fee charged, the monthly service charges, the
proposed application of the proceeds of the entrance fee by the provider, and
the plan by which the amount of the entrance fee is determined if the entrance
fee is not the same in all cases; and
(B)
A record of past increases in entrance fees and monthly care fees and other
similar charges during the previous three years;
(12)
If a facility is in a stage of being proposed or developed, it shall
additionally provide:
(A)
The summary of the report of an actuary estimating the capacity of the provider
to meet its contractual obligation to the residents; and
(B)
A statement of cash flows and narrative disclosure detailing all significant
assumptions used in the preparation of the statement of cash flows. The
Commissioner may establish by rule or regulation the necessary and significant
assumptions used in the preparation of the statements of cash flow;
and
(13)
Any additional costs to the resident.
(e)
The cover page of the disclosure statement shall state, in a prominent location
and in boldface type, the date of the disclosure statement, the last date
through which the disclosure statement may be delivered if not earlier revised,
and that the delivery of the disclosure statement to a contracting party before
the execution of a continuing care agreement is required by this chapter, but
that the disclosure statement has not been reviewed or approved by any
government agency or representative to ensure accuracy or completeness of the
information set out.
(f)
A copy of the continuing care agreement generally used by the provider shall be
attached to each disclosure statement.
(g)
The Commissioner may prescribe a standardized format for the disclosure
statement required by this Code section.
(h)
The department may require a provider to alter or amend its disclosure statement
in order to provide full and fair disclosure to prospective residents. The
department may also require the revision of a disclosure statement which it
finds to be unnecessarily complex, confusing, or illegible.
33-45-11.
(a)
A provider or facility shall maintain financial reserves equal to 25 percent of
the total operating costs of the facility projected for the 12 month period
following the period covered by the most recent audited financial statements
included in the disclosure statement required by Code Section 33-45-10. In
addition to total operating expenses, total operating costs shall include debt
service, consisting of principal and interest payments, along with taxes and
insurance on any mortgage loan or other financing, but shall exclude
depreciation, amortized expenses, and extraordinary items as approved by the
Commissioner. If the debt service portion is accounted for by way of another
reserve account, the debt service portion may be excluded.
(b)
A provider or facility which has opened but not yet achieved full occupancy, as
defined by its lender or financing documents, if any, or 95 percent occupancy of
its residential units; or a provider or facility that has received a certificate
of authority and has been in conformance with the provisions of this chapter
prior to July 1, 2011, shall be required to achieve the level of financial
reserves required by paragraph (1) of this subsection as follows:
(1)
The provider or facility shall submit a plan to the Commissioner the terms of
which assure that the provider or facility shall maintain sufficient progress
to achieving the level of financial reserves required by this Code section;
and
(2)
The plan demonstrates that the provider or facility is substantially likely to
achieve the required level of financial reserves within five years of opening or
for existing facilities that received a certificate of authority and have been
in conformance with the provisions of this chapter prior to July 1, 2011, within
five years of July 1, 2011. For purposes of this paragraph, the term
'substantially likely' means a provider or facility shall meet the level of
financial reserves required by paragraph (1) of this subsection at a minimum
rate of 20 percent per year as of the end of each fiscal year after the later of
the date the facility opens or July 1, 2011, up to a total of 100 percent as of
the end of the fifth fiscal year.
(c)
The financial reserves required by this Code section may be funded by cash, by
invested cash, or by investment grade securities, including bonds, stocks,
United States Treasury obligations, obligations of United States government
agencies, any reserves required by lenders or established by the facility, or
any other financial resources approved by the Commissioner that can be used by
the facility to meets its operating reserve.
(d)
The provider or facility shall notify the Commissioner as soon as the provider
or facility has knowledge of the need to expend any funds which reduce the
balance in the financial reserves to an amount less than the amount required by
this Code section. Such notice shall be made within at least 30 business days
of the provider or facility having such knowledge. If the provider or facility
does not have such knowledge within 30 business days, the provider or facility
shall notify the Commissioner as soon as possible, but not more than 30 business
days after the expenditure of such funds. In the event that the amount in the
reserves falls to an amount less than the amount required by this Code section,
the Commissioner:
(1)
Shall require that the provider or facility submit a corrective action plan to
be approved by the department such that the Commissioner finds that the provider
or facility can be reasonably expected to be able to reinstate the level of
financial reserves required by this Code section within sufficient time to
ensure that the contractual liabilities of the provider and the best interests
of the residents of the facility will be adequately protected; and
(2)
May require the provider or facility to make additional financial arrangements
to ensure that the contractual liabilities of the provider and the best
interests of the residents of the facility are adequately protected. Such
arrangements may include:
(A)
The posting of a security bond;
(B)
Requiring that the proceeds from any entrance fees from new residents be placed
in escrow. Any requirement to escrow funds shall not be applied to funds which
are subject to prior claims by a resident of the facility;
(C)
Any other security which the Commissioner determines provides adequate assurance
that the provider or facility will be able to fulfill its obligations to its
residents to the same extent as it would be if the financial reserves were
funded at the amount required by this Code section; or
(D)
Requiring the provider or facility to work with lenders to refinance or
reevaluate the current debt of the provider or facility.
(e)
Upon written application by a provider, the Commissioner may authorize a
facility to maintain financial reserves in an amount less than the amount set
forth in this Code section, or at a lesser rate than the minimum rate of 20
percent per year as of the end of each fiscal year set forth in paragraph (2) of
subsection (b) of this Code section, if the Commissioner determines that the
contractual liabilities of the provider and the best interests of the residents
of the facility may be adequately protected by the financial reserves in a
lesser amount or by achieving the required financial reserves at a lesser rate
than 20 percent per year.
33-45-11.33-45-12.
Any
resident injured by a violation of this chapter may bring an action for the
recovery of damages plus reasonable attorney's fees.
33-45-10.33-45-13.
(a)
Any person who knowingly maintains, enters into, performs, or, as manager or
officer or in any other administrative capacity, assists in entering into,
maintaining, or performing any continuing care agreement subject to this chapter
without a valid certificate of authority or renewal thereof, as contemplated by
or provided in this chapter, or who otherwise violates any provision of this
chapter, is guilty of a misdemeanor. Each violation of this chapter constitutes
a separate offense.
(b)
The
In addition to
the powers granted pursuant to Chapters 1 and 2 of this title, the
department may bring an action to enjoin a
violation, threatened violation, or continued violation of this chapter in the
superior court of the county in which the violation occurred, is occurring, or
is about to occur.
(c)
If, after a period of 180 days, or such additional time as the department shall
deem appropriate, the corrective action plan required by paragraph (1) of
subsection (d) of Code Section 33-45-11 has been submitted and approved by the
department and the department deems the facility or provider to be unable to
achieve the necessary financial reserves or is not making substantial progress
toward achieving the required financial reserves, the department shall be
authorized to take immediate action against the facility or provider's
certificate of authority, including suspension or revocation of the certificate
of authority; provided, however, that before the Commissioner suspends or
revokes a certificate of authority, the Commissioner shall conduct a hearing in
accordance with Chapter 2 of this title.
(c)(d)
Any action brought by the department against a provider shall not abate by
reason of a sale or other transfer of ownership of the facility used to provide
care, which provider is a party to the action, except with the express written
consent of the Commissioner
of
Insurance.
33-45-12.33-45-14.
Any
contract or
agreement
for continuing care
agreement
executed before July 1, 1991, which is amended or renewed subsequent to July 1,
1991, and any contract or
continuing
care agreement
for
continuing care executed on or after July
1, 1991,
is
shall
be subject to this
chapter."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.
