Tuesday, September 9, 2014
In Psychiatric Times, Dr. Anandhi Narasimhan, California-based and board certified in psychiatry and neurology, compares her professional and personal experiences with grieving following the death of her father. She writes well, and in additional to offering suggestions for coping, she shares this poignant detail from her father's life, which also served to introduce me to a new and intriguing idea, "dialysis at sea." She writes:
"My father was a distinguished scientist who placed value on education. Although he did not believe in lavishness, he always liked to present himself in a well-groomed fashion. I miss his sense of humor, and I have discovered how important such a quality can be when faced with tough times. Remembering his witty repertoire reminds me to celebrate his life.
The picture I have included [with her essay in Psychiatric Times] is from an Alaskan cruise my family took. We had talked about taking a cruise as a family in the past; this had been a dream of my father’s. When he was placed on regular dialysis treatments, he said, 'I guess now I won’t ever be able to go on a cruise.'
It wasn’t until I saw a poster advertising 'Dialysis at Sea' that I realized we could make his dream come true. With some logistical planning, transferring of medical records and such, we were able to take my father on an Alaskan cruise, an experience he both treasured and loved.When I was growing up, my father had a sort of utilitarian view of vacations—we often had to be doing and seeing things; they had to be productive. This vacation was different—it was nice to see him relax and enjoy the awesome beauty of Alaskan glaciers. His smile in the picture is how I would like to remember him: intelligent, positive, humorous, and charming."
Read more of "My Father's Influence" here.
Friday, September 5, 2014
We have several posts about the use of technology in caregiving. I cover it in my classes (do you?) and in particular, I want my students to think about consent, privacy and autonomy. Several years ago, there were stories about PARO, a therapeutic interactive robot designed to resemble a baby harp seal, and its use with certain individuals, including those residing in nursing homes. (The company website has quite a bit of information about PARO, including research papers.) There are lots of different types of technologies available, whether assistive or monitoring.
A recent article in the San Jose Mercury News (and picked up by my local paper, the Tampa Bay Times) Meet Paro, a robot designed to help the elderly, reports on the results from using Paro in a local retirement community. This article looks at the issues of ethics as well as how the use of such "socially assistive" robots results in less isolation for some residents. The story highlights the interactions of some residents with the robot. The article also reviews the debate regarding using such robots. For example, Sherry Turkle, an MIT social scientist is quoted in the article offering a concern that
"faux relationships" with machines may detract from human connections..."It's not just that older people are supposed to be talking. Younger people are supposed to be listening... [and] ... [w]e are showing very little interest in what our elders have to say." Robots like Paro may offer comfort to isolated seniors, Turkle has written, but it could "make us less likely to look for other solutions for their care."
Another expert, Professor Maja Mataric, offers a counter-view, that such robots provide both "valuable reinforcement and motivation" and notes that
While robots aren't a complete substitute for human interaction, she stressed, they may play a vital role since "there just simply aren't enough people to take care of our very large and growing elderly population." ... [and] added: "We need to think about the humane and ethical use of technology, because these things are coming."
I think this is a great topic for discussion with students. Let me know what you think.
Wednesday, September 3, 2014
We get calls of all types, on our cell phones and for those of us who still have them, our land lines. Imagine a phone call offering you counseling on end of life options. Sound far-fetched? Not so much for some. Kaiser Health News (KHN) ran a story in late August, Operator? Business, Insurer Take On End-of-Life Issues By Phone. The article describes a company "Vital Decisions... [where] [a]fter sending a letter (people rarely respond) counselors essentially cold-call to offer what they describe as “nondirected” end-of-life counseling" to those who are quite ill. The company uses social workers to make the calls, which are short (about 15 minutes). Here's what the program is designed to achieve:
to build a relationship over the phone, [with the patient] so [the patient] might be comfortable discussing his situation and his goals. Then he’ll be empowered to communicate those things with others, including his family and his doctors. He could also choose to allow the counselor to talk to his doctors or family directly. It’s paid for by insurers and federal privacy rules permit this for business purposes.
According to Vital Decision's CEO, the goal is to facilitate discussions about end of life care and empower the patient's decision-making. "The goal is for patients to receive care in those final months that aligns with what the patient wants, even if that's the most aggressive treatment available." Some are skeptical of this phone approach because of the lack of in-person interaction and the challenges to remain neutral, which is why one expert calls for "full transparency from insurers and the company to guard against bias in the sessions."
Monday, September 1, 2014
Washington Post writer Frederick Kunkle profiles Meryl Comer, author of "Slow Dancing With a Stranger," a new book that "offers an unflinching and intimate account about what it means to surrender one's career to care" for a loved one stricken with Alzhemier's. In describing the author and her book, he writes:
"Its a a love stsory without a happy ending, because the ending for Alzheimer's patients can seem more like endless twilight. And it's a call to arms for caregivers such as Comer....
When Alzhemier's took hold, [her husband, chief of hematology and oncology at NIH, Harvey Gralnick] was a fit 56-year-old -- he ran six miles a day -- who dressed impeccably wearing the latest fashions beneath his lab coat.... For a time, he was able to mask his symptoms behind his reputation as a brilliant if eccentric scientist....
As his condition worsened, Comer, too, gave up her career -- and she adds with a note of bitterness, her 'prime.' In her blunt-talking manner, she acknowledged that she did so not entirely out of devotion but because doctors told her more than once, wrongly, that the progress of her husband's disease would not be long.
Finances, too, were a factor. It was almost impossible to find care that she felt would be satisfactory for her husband and yet affordable. Her burden intensified even further when her mother, too, developed Alzheimer's; her mother now shares the same home with Comer and her husband."
The book is meant to make people mad -- and more realistic and focused -- about the need for solutions. The article quotes George Vradenburg, a co-founder with Comer of the nonprofit group USAgainstAlzheimer's, who hopes that Comer's book will stir conversations about a disease many prefer not to think about. "I hope America gets mad," Vradenburg is quoted as saying.
For more, see "Alzheimer's -- Thief and Killer," in the Washington Post.
Monday, August 25, 2014
In a feature article on Medicare's "star ratings," the New York Times reports that some nursing homes are able to "game the system" through self-reports of data that fail to include complaints filed with state agencies. The article uses examples to show that even five star ratings, the highest available, can be obtained despite pending state investigations into serious allegations of mishandled care. The ratings by Medicare were intended to provide an objective measure for consumers and in recent years a growing proportion of nursing homes have obtained higher ratings.
"But some nursing homes are not truly improving. Instead, they have learned how to game the rating system, according to ]New York Times] interviews with current and former nursing home employees, lawyers and patient advocacy groups. Nationally, the proportion of homes with above-average ratings has risen steadily. In 2009, when the program began, 37 percent of them received four- or five-star ratings. By 2013, nearly half did.
The Times analysis shows that even nursing homes with a history of poor care rate highly in the areas that rely on self-reported data. Of more than 50 nursing homes on a federal watch list for quality, nearly two-thirds hold four- or five-star ratings for their staff levels and quality statistics. The same homes do not fare as well on the sole criterion that is based on an independent review. More than 95 percent of the homes on the watch list received one or two stars for the health inspection, which is conducted by state workers."
For more, see "Medicare Star Ratings Allow Nursing Homes to Game the System" by Kate Thomas.
Sunday, August 24, 2014
The Pennsyvania Joint State Government Commission issued a final report of its Advisory Committee on Long Term Care Services and Support for Older Pennsylvanians on August 21, 2014, following a year-long assessment of existing concerns of independent and care-dependent elders in Pennsylvania.
In a one-page summary of the 200 page report, the Commision makes the following Recommendations:
"Opportunities exist to improve system structure and organization, reduce barriers, and break down silos that characterize service delivery and payment. Better care transitions and improved coordination of service providers are also crucial, along with increased support for family caregivers. Focused information and awareness for consumers and families helps ensure they know where to turn when a crisis hits, which is often their first exposure to long term care. Expanding access to services and supports, through a tiered system that shares costs, will help improve quality and increase accountability. Enhancements to local resources, including Area Agency on Aging networks, will focus services and advance more equal community, facility, and home care options. These reforms will help ensure access to long term care for all Pennsylvania seniors, and prevent those who need assistance but don’t qualify for supports, from falling between the cracks."
Now comes the hard work . . . getting to an implementation stage.
Friday, August 22, 2014
Canada's hospitals are "overflowing at the seams" with patients who don't need to be there - frail and aging seniors, many of them with dementia, who have nowhere else to go, says the incoming leader of the Canadian Medical Association. The "warehousing of seniors" is costing the system $2.3 billion a year and highlights urgent need for a national rethink of seniors' care, Dr. Chris Simpson said in his inaugural speech Wednesday as CMA president.
Simpson, who also chairs the national Wait Times Alliance, said Canadians are facing long waits for virtually every non-urgent test, surgery or procedure "because the beds needed are filled with patients who don't need to be in hospitals."
Seniors awaiting placement in other facilities are occupying about 15 per cent of hospital beds. But "instead of focusing on getting them back to their independence we put them in beds, because that's what we do in hospitals. We put people to bed instead of putting them in a care environment that lifts them up and restores them and helps them live a dignified life."
Thursday, August 21, 2014
Wow! Medicaid transfer rules argued in prime time! (Well, almost...)
On August 20, the Ohio Supreme Court heard oral argument on Estate of Atkinson v. Ohio Dept. of Job & Family Services, Case No. 2013-1773. Video of the presentations (including the very interesting questions from the bench) can now be viewed here on the Ohio Channel.
This strikes me as a great opportunity for Elder Law course students to read briefs and observe lawyers in oral argument tackle technical, challenging legal issues (listen to the Court ask one attorney to slow down and explain his use of pronouns). Can you predict the outcome? Note: The Supreme Court's arguments on Ohio Channel appear as high quality productions, well edited, with subtitles indicating the names of the speakers and the identity of the issues on appeal, and the website is searchable for other appellate cases for faculty members looking for examples to use in other classes.
As framed in the appeal, the issue is whether the community husband's actions triggered a period of ineligibility for Medicaid benefits for his wife in the nursing home. The record showed the husband transfered the couple's home "out" of the couple's long-standing revocable trust to the name of the institutionalized spouse, and then in turn, the same day, to the community spouse. As described in one news account:
"The county department of job and family services found that the transfer of the home, valued at $53,750, was improper because it violated federal and state Medicaid rules. While Mrs. Atkinson’s Medicaid benefits were approved, the agency temporarily excluded nursing-home care from her coverage because of the transfer."
The state has been successful with its arguments before state agencies up to this point. The Ohio Supreme Court, however, asked the attorneys about the applicability and relevance of the 6th Circuit's 2013 decision in Hughes v. McCarthy regarding permitted use of spousal annuities in Medicaid planning in Ohio. During the oral argument, one Justice also asks whether the state should be bound by the position taken by the federal agency, Health and Human Services (apparently in an amicus brief), in support of the family's argument.
There are also opportunities here to think about whether -- and how -- this particular transfer issue might have been avoided with different planning.
Tuesday, August 19, 2014
We have blogged previously on hospice, and a new article adds to the body of literature on the subject. The Journal of Palliative Medicine published an article by Dr. Joan Teno, Dr. Michael Plotzke, Dr. Pedro Gozalo, and Dr. Vincent Mor, A National Study of Live Discharges from Hospice. The study recognizes that there are various reasons that a person may leave hospice care, such as "patients decide to resume curative care, their condition improves, or hospices may inappropriately use live discharge to avoid costly hospitalizations." The abstract offers the following conclusion-about 20% of "hospice patients are discharged alive with variation by geographic regions and hospice programs. Not-for-profit hospices and older hospices have lower rates of live discharge." Why is it important to study this? As the introduction to article points out, there are instances when a provider may improperly discharge a patient and the timing can be telling: improper admission to hospice at the beginning or an effort to avoid costs. Building on existing research, this study finds similar results in some areas, but makes some important conclusions that deserve additional study
Provide and state variation raises concern that live discharges are not driven by patient preference but by provider and market behavior. Hospice programs that exceed their aggregate reimbursement caps (a marker for hospices with an excessive average hospice length of stay) had nearly double the rate of live discharges compared to hospice programs that did not exceed their aggregate cap.
The authors suggest there are certain red flags that should alert regulators that more careful scrutiny is needed for a specific hospice.
A hospice program with a high rate of live discharges deserves regulatory scrutiny especially when they have a pattern of hospitalization and hospice readmission. With increased hospice competition or potential future changes in hospice payment policies, hospices may change their enrollment and pattern of live discharges to maximize their profitability. Potentially, live hospice discharges represent a vulnerability of the Medicare Hospice Benefit. Hospices with high rate of these patterns of live discharges should trigger further regulatory review that examine whether their hospice enrollees were eligible, adequately informed about the Medicare hospice benefit before electing hospice, and whether the hospice program did a good enough job of advance care planning to avoid hospitalizations.
The Centers for Disease Control says more than 1 million people in the U.S. are living with HIV, and almost 1 in 6 don't know they are infected. This could affect Suncoast seniors who may be unaware of the dangers. There are certain things we are hesitant to discuss with children, and frequently those same topics are avoided with seniors. But whether we address it or not, older people are not only sexually active; according to the American Academy of HIV Medicine, by 2015, half the U.S. HIV population will be age fifty or older. “But they think they're not at risk. In their day, condoms were only for birth control. And so today, they don't have to worry about birth control and they don't know about HIV and all the other STD's that they could have to worry about.” Seniors with HIV that don't realize it are in a very dangerous position. “HIV accelerates and predisposes you to a number of diseases which causes death.
Sunday, August 17, 2014
The Washington Post ran a fascinating article on a particular Medicare scam. A Medicare Scam That Just Kept Rolling was published August 16, 2014 and focuses on power wheelchairs. The article offers a detailed look at how this particular scam worked.
The wheelchair scam was designed to exploit blind spots in Medicare, which often pays insurance claims without checking them first. Criminals disguised themselves as medical-supply companies. They ginned up bogus bills, saying they’d provided expensive wheelchairs to Medicare patients — who, in reality, didn’t need wheelchairs at all. Then the scammers asked Medicare to pay them back, so they could pocket the huge markup that the government paid on each chair.
This eye-opening article points out that the depth and breadth of the scam remains largely unknown, but is on its way out.
But, while it lasted, the scam illuminated a critical failure point in the federal bureaucracy: Medicare’s weak defenses against fraud. The government knew how the wheelchair scheme worked in 1998. But it wasn’t until 15 years later that officials finally did enough to significantly curb the practice.
The article is accompanied by a video that shows in "four easy steps" how to perpetrate a Medicare scam as well as a sidebar with slides showing how the power wheelchair scam works. Variations of the scam are more than 40 years old and have morphed with the times.
If you aren't shaking your head in wonder now, consider why these scams can happen:
[F]or Medicare officials at headquarters, seeing the problem and stopping it were two different things.
That’s because Medicare is an enormous system, doing one of the most difficult jobs in the federal government. It receives about 4.9 million claims per day, each of them reflecting the nuances of a particular patient’s condition and particular doctor’s treatment decisions.
By law, Medicare must pay most of those claims within 30 days. In that short window, it is supposed to filter out the frauds, finding bills where the diagnosis or the prescription seem bogus.
The way the system copes is with a procedure called “pay and chase.” Only a small fraction of claims 3 percent or less — are reviewed by a live person before they are paid. The rest are reviewed only after the money is spent. If at all.
The whole thing is set up as a kind of honor system, built at the heart of a system so rich that it made it easy for people to be dishonorable.
The article talks about comparisons--the amount of money spent on power wheelchairs as compared to the total amount of dollars spent in the Medicare universe and although the amount spent on wheelchairs is a lot, it's a small amount in that universe. The article mentions the steps the government has taken to end the motorized wheelchair scam such as competitive bidding and rent-to-own. So if the wheelchair scam is on the decline, what's the next one? According to the article, orthotics and prosthetics. Stay tuned...
Thursday, August 14, 2014
The journal Health Affairs is seeking articles on older adults, and specifically regarding the care and management of multiple chronic conditions among this population. We are interested in work that spans the full range of care settings, including primary care and specialty practices, hospitals, nursing homes and other long-term care settings. We are grateful to The John A. Hartford Foundation for providing support for our ongoing coverage of these topics. There is no deadline for submissions; papers on these topics will be considered on an ongoing basis and considered for publication through 2015. For more information, contact Health Affairs executive editor, Don Metz: email@example.com.
Tuesday, August 12, 2014
It is no secret that the long-term care insurance industry has struggled to offer products that are both attractive and affordable for consumers and financially worthwhile for the insurance companies. MetLife and Prudential no longer offer new policies, for example.
Genworth, the largest provider of long-term care insurance, announced on July 29, 2014 that its second quarter showed significant changes and that it is conducting a comprehensive review of its long term care insurance claim reserves. Apparently the company's investors have asked for additional information, following the last in-depth review of the claims reserve, which was conducted in 2012. Genworth's news release explained:
"The primary areas of focus in the current review are: (i) an analysis of potential causes of the meaningful increases in adverse claims experience in the second quarter of 2014 and (ii) an assessment of the assumptions and methodology underlying the associated reserves, including morbidity, mortality, interest rates and claim terminations. The company intends to complete this review before the release of financial results for the third quarter of 2014. The company continues to believe that the existing assumptions and methodology provide the most reliable best estimate. However, given the review underway that will consider both long-term and recent experience, the company will likely change some of its assumptions, which could increase our long term care insurance claim reserves, and any increase may or may not be material."
As reported by Reuters, ratings of Genworth by Fitch already assume some level of LTC earnings and reserve volatility, but depending on the size of any charges taken by Genworth in the third quarter, "Fitch may review the ratings of GNW [Genworth] and the review could result in a revision in the Outlook to Negative or a rating downgrade."
Monday, August 11, 2014
The Washington Post recently completed a disturbing three-part series on hospice. To analyze the quality of services rendered to terminal patients, the reporters reviewed "Medicare billing records for more than 2,500 outfits, obtained an internal Medicare tally of nursing care in patients near death and reviewed complaint records at hundreds of hospices." The Post tracks data pointing to staff shortages, lack of coordination in care, failure to provide sustained assistance during critical periods, and the potential for Medicare to incentivize such gaps through perverse funding priorities.
Sunday, August 10, 2014
By 2050, a quarter of China’s population is expected to be age 65 or older. Although the government has recently loosened its restrictive population policy to allow most couples to have two children, so far it doesn’t look likely that any forthcoming baby boom will save China from its rapidly aging population. China’s current elderly, especially those living in rural areas, frequently endure chronic medical conditions without treatment, according to a new study in the journal International Health. Dai Baozhen of Jiangsu University’s Department of Health Policy & Management analyzed the results of China’s semi-regular “health and nutrition survey” for 2009, looking in particular at the responses from rural households in nine provinces.
Among his findings: China’s elderly are likely to be less educated than younger cohorts and often poorer. Nearly 70 percent of the rural elderly in the survey had an annual income of less than 5,000 renminbi ($810). Many also said their children had left home to work in cities, and while they might send money back, they couldn’t provide steady emotional support or help in obtaining and monitoring health care. Fifty-eight percent of the elderly respondents were illiterate, another barrier in obtaining health services.
It was not uncommon for China’s rural elderly to suffer chronic conditions, according to the study, including hypertension (18 percent), asthma (6 percent), and diabetes (3 percent). And those figures represent diagnosed conditions—the worrying possibility exists that many elderly suffer in the absence of any diagnosis. Fully a quarter of elderly were diagnosed with hypertension, and a third of those diagnosed with diabetes received no treatment.
Isolation and depression are also significant risks for rural elderly. China’s overall suicide rate has dropped sharply over the past two decades, especially among rural women under age 35. But among China’s elderly, it remains distressingly high. According to a recent study by researchers at the University of Hong Kong, cited by the Economist, the suicide rate for men in the Chinese countryside aged 70 to 74 is 41.7 per 100,000 (more than four times higher than the national average of 9.8 per 100,000).
Source/read more: Bloomberg
Sunday, August 3, 2014
I was reading an article about Merrill Lynch hiring a financial gerontologist, Five Questions for Financial Gerontologist Cyndi Hutchins. Ms. Hutchins "works with other Merrill Lynch financial advisers to manage their clients' transitions into retirement. She specializes in settling the fears many aging people have about life without a steady paycheck." In the interview, Ms. Hutchins explains why she got a degree in gerontology and explains what concerns clients vis a vis retirement: paying for out of pocket health care costs, including long term care, as well as those for family members. Comparing the Boomers and Millenials, Hutchins references the proverbial 3-legged stool and says for boomers-it's 2 legs--with no pension leg, but for Millenials, it's just one leg (savings). Her biggest challenge--client fears. "Helping them keep a healthy outlook and keeping it real is probably the biggest challenge. You don't want to come out there sounding like a Debbie Downer, but you want your clients to understand the issues that they're facing and face those issues head on and feel like they have clarity. There's so many things to consider."
I was intrigued by this concept of financial gerontology so I did a google search and found out Ms. Hutchins is not the only one out there. The American Institute for Financial Gerontology offers not only CEs but also a registered financial gerontologist program ("RFG®"). The faculty include several individuals well-known to elder law attorneys. Dr. Sandra Timmermann wrote an article that was published in 2005 in the Journal of Financial Services Professionals, Looking into the Crystal Ball and Seeing Gray: Predictions For Financial Services. At the time of authoring the article, Dr. Timmermann "was the founder and Executive Director of the MetLife Mature Market Institute" (dissolved 06/2013) and is currently a consultant for businesses on aging.
Thursday, July 31, 2014
At the 2014 International Elder Law and Policy Conference hosted by John Marshall Law School in Chicago on July 10 and 11, many weeks of hard work culminated in adoption of a "Chicago Declaration on the Rights of Older Person." The 11th draft -- of what is to be a working document for the future -- will be presented at the Fifth Working Session of the United Nations Open-Ended Working Group on Ageing to be held in New York City this week.
In addition, the Chicago Declaration was submitted by United States Representative Janice Schakowsky (Illinois) to the Congressional Record on July 25.
Congratulations to all who worked on this, with the leadership of many, including Associate Dean Ralph Rubner and Amy Taylor, Head Research Coordinator at John Marshall Law School. More work for everyone is ahead on this exciting task of seeking wider recognition of the human rights of older persons.
Speakers at the "Side Event" for the Chicago Declaration, to be held on August 1 at the U.N., include William Pope, Commissioner of the American Bar Association Commission on Law and Aging, and Ebbe Johansen, Vice President, AGE Platform Europe from Brussels.
Wednesday, July 30, 2014
From the Department of Justice, news of the False Claims Act settlement reached with Omnicare Inc., "the nation's largest provider of pharmaceuticals and pharmacy services to nursing homes." The company has agreed to pay $124.24 million "in return for their continued selection" as the supplier of drugs to elderly Medicare and Medicaid beneficiaries. The claims related to improper discounts allegedly given by Omnicare as incentives for doing business with the company.
According to the DOJ press release, the settlement resolves two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act. "The first whistleblower, Donald Gale, a former Omnicare employee, will receive $ 17.24 million."
DOJ states that since January 2009, it has "recovered a total of more than $19.5 billion through False Claims Act cases," including more than $13.9 billion in cases alleging fraud associated with health care programs.
What do you think about promotion of filial support laws -- laws potentially obligating adult children to care for and maintain or financially assist an indigent parent -- as grounds to encourage states to promote the purchase of "long-term care" insurance? In essence, that is what three authors associated with the "American College of Financial Services" advocate in a recent article for volume 20 of Widener Law Review. Here's the SSRN abstract from "Leveraging Filial Support Laws Under State Partnership Programs for Long-Term Care Insurance."
"As thousands of the United States’ baby-boomers retire each day, people live longer, families disperse, and the population ages. Financing long-term care needs has become an increasingly important focal point in both civilian and government budget discussions. In order to reduce reliance on government provided long-term care funding programs such as Medicaid, states can leverage the often unenforced filial responsibility laws and State Long-Term Care Partnership Programs. Through the enforcement of existing filial responsibility laws, states can provide the proverbial “stick” to incentivize people to purchase long-term care insurance by increasing their personal liability for their family members’ long-term care expenditures. Furthermore, by offering liability protections from filial responsibility laws under the state’s long-term care insurance partnership program, states will be able to offer a “carrot” to encourage participation in the long-term care insurance market. Ultimately, by leveraging these two existing legal structures, states can incentivize the purchase of long-term care insurance and reduce reliance on government provided long-term care financing programs."
Tuesday, July 29, 2014
From Senior Housing News, comes the word of River Terrace Estates, a nonprofit Continuing Care Retirement Community (CCRC) in Bluffton, Indiana, that filed for protection in bankruptcy court on July 22. Unlike some Chapter 11 reorganizations for CCRCs, River Terrace is not a "new" construction, having opened in 2004. However, as with newer operations that came on line just as the 2008 financial crisis hit, River Terrace reports being impacted by the recession, reportedly a hard hit for housing in Northern Indiana. As described in Senior Housing News, one potentially unique aspect of the River Terrace financing issues is the source of the loans it carried:
"Contrary to some CCRCs that rely heavily on institutional investments, River Terrace Estates’ financing encompasses roughly 1,400 individuals who own RTE bonds. As a result, the CCRC determined that Ch. 11 was the only feasible method to restructure the bonds. In connection with the filing, the CCRC has already filed a plan of reorganization in order to expedite the process, River Terrace Estates stated in a news release.
'Because we have some 1,400 bondholders, we decided the best way to give them a voice in this process is to ask them to vote on a two-part plan so we know their intentions,' Stewart said. RTE bondholders will be asked to vote on whether they want to keep their bonds for the long-term based on the community’s recent progress, or market the CCRC to validate its value."
According to news reports, either way, "bondholders will take a serious haircut, perhaps recovering only 53% in a bond exchange or $0.46 on the dollar in the sale of the facility, a hard hit on predominantly non-institutional investors," according to George Mesires, a lawyer with the finance and restructuring team for a Chicago law firm, quoted in Senior Housing News and on the firm's website.
Another potentially unique feature will be River Terrace Estate's plan for going forward with a different payment model for new residents. Rather than paying an entry fee described as $55k to $100k, new residents can pay a "nonrefundable communtiy fee of about $30,000, accordiong to figures provided" by a spokesperson quoted in Senior Housing News.
This summer has brought news of other financial struggles for CCRCs, including the June Chapter 11 filing by Texas-based senior living company Sears Methodist Retirement Systems, and the Chapter 11 filing by a New York life care community, The Amsterdam on July 23. The ability of CCRCs to emerge successfully from similar reorganizations in the past has often depended on new operating partners and restructuring of loans, but also on the ability of the companies to reassure future residents of appropriate protection and use of "large" upfront fees.