Monday, June 13, 2016
A new report from the GAO covers funding of HUD's supportive housing program. Housing for Special Needs: Funding for HUD's Supportive Housing Programs, GAO Report #16-424 was released on May 31, 2016. The GAO findings are:
Until program funding for new development ceased in fiscal year 2012, the Department of Housing and Urban Development (HUD) used a two-phase process to allocate and award capital advances for Section 202 Supportive Housing for the Elderly (Section 202) and Section 811 Supportive Housing for Persons with Disabilities (Section 811). First, HUD headquarters allocated the amount of appropriated funds for capital advances to each of the 18 regional offices using a funding formula, which accounted for regional housing needs and cost characteristics. Funding was further divided among 52 local offices using a set-aside formula and was also split between metropolitan and nonmetropolitan areas for Section 202. In 2010, HUD eliminated the set-aside which had guaranteed a minimum amount of funding for each local field office. The process for making capital advance awards did not change, but HUD was better able fund properties at a higher level. Second, applicants submitted applications to the applicable HUD regional office, and staff from these offices evaluated and scored applications based on various criteria, including capacity to provide housing and ability to secure funding from other sources. Applicants in each regional office were ranked highest to lowest and funded in that order. Any residual funds that were not sufficient to fund the next project in rank order were pooled nationwide and HUD headquarters used a national ranking to fund additional projects.
Most but not all states (including the District of Columbia and Puerto Rico) had applicants that received capital advances for Section 202 and Section 811 in fiscal years 2008 through 2011. GAO found that some states had applicants that received capital advances in each of the years reviewed, while other states did not. In the period reviewed, four states had no applicants that received Section 202 capital advance awards, and eight states had no applicants that received Section 811 capital advance awards. HUD officials cited several reasons applicants from some states may not have received funding during this period, including applications that were submitted may have been ineligible or higher-scoring applications from other states may have been selected instead. The capital advance amounts varied. For Section 202, total capital advance amounts for fiscal years 2008-2011 for states that received at least one award ranged from less than $24 million to more than $75 million. For Section 811, total capital advance amounts for fiscal years 2008-2011 for states that received at least one capital advance award ranged from less than $4 million to more than $15 million.
A pdf of the full report is available here.
Thursday, June 9, 2016
Sometimes we run into stories that really really are sad. This story in the New York Times is sad. Imagine being old and homeless, whether recently homeless or homeless for a long time. Think about the struggles one has in being homeless. Compound those struggles with the challenges faced by someone who has mobility issues or physical problems identified with being older. Old and on the Street: The Graying of America’s Homeless is an in-depth story that ran on May 31, 2016 and notes [t]he emergence of an older homeless population is creating daunting challenges for social service agencies and governments already struggling to fight poverty.
They lean unsteadily on canes and walkers, or roll along the sidewalks of Skid Row here in beat-up wheelchairs, past soiled sleeping bags, swaying tents and piles of garbage. They wander the streets in tattered winter coats, even in the warmth of spring. They worry about the illnesses of age and how they will approach death without the help of children who long ago drifted from their lives.
Homelessness is not just an issue for elders, but it is an issue that is growing since all of us age. "The homeless in America are getting old... There were 306,000 people over 50 living on the streets in 2014, the most recent data available, a 20 percent jump since 2007, according to the Department of Housing and Urban Development. They now make up 31 percent of the nation’s homeless population."
There are the "recently" homeless some of whom lost jobs and others who can't afford a home on fixed-income, and then there are the long-term homeless.
Many older homeless people have been on the streets for almost a generation, analysts say, a legacy of the recessions of the late 1970s and early 1980s, federal housing cutbacks and an epidemic of crack cocaine. They bring with them a complicated history that may include a journey from prison to mental health clinic to rehabilitation center and back to the sidewalks.
The article notes the incidences of homelessness is somewhat geographic and is rising in the larger metropolitan areas. The article features interviews with several elders in California who are homeless.
How do cities respond to the challenges of individuals who are homeless, and especially those elders who are homeless? "The challenges faced ... have forced advocates for the homeless and government agencies to reconsider what kinds of services they need: It is not just a meal, a roof and rehabilitation anymore."
Assign this article to your students and ask them to create a plan for their city to provide services. It should be an interesting class discussion.
Wednesday, June 8, 2016
A recent New York Times article sheds light on a frequent topic I've encountered in my own research on the convergence of elder law, contract law, and nonprofit organizations law: when will a nonprofit nursing home or similar senior living operation be "allowed" to convert or sell-off to a for-profit operation? And what if the "real" plan is to convert to an entirely new type of for-profit operation?
The potential for conversion appears to be the heart of a dispute over two nonprofit nursing homes in Manhattan, where State and City authorities are seeking to prevent their purchase by a for-profit company known as Allure Group. From the New York Times:
Citing misrepresentations and broken promises, the New York State attorney general’s office is seeking to prevent the purchase of two nursing centers by a company that was involved in transactions that put a Manhattan nursing home in the hands of luxury condominium developers....
“Allure made clear and repeated promises to continue the operation of two nursing homes for the benefit of a vulnerable population — promises that proved to be false,” said Matt Mittenthal, a spokesman for the attorney general, referring to Rivington House and a nursing home bought by Allure in the Bedford-Stuyvesant section of Brooklyn, which were closed within a year of a court petition’s being filed. “Until we conclude our investigation, we will object to Allure buying additional nursing homes.”
In New York, any nonprofit seeking to sell its assets must petition a state court for approval; the attorney general reviews all such requests and can object if there are grounds to do so. The court has the final say....
Tuesday, June 7, 2016
We've reported earlier, including here and here, about recent financial and management issues at a Tampa, Florida continuing care retirement community that operates under the name of University Village. The latest event is the May 31, 2016 order of an administrative law judge that would uphold the decision of the Florida Agency for Health Care Administration to revoke the license for operation of a skilled nursing facility at University Village..
Many of the concerns appear to focus on the alleged action (or inaction) of an individual, John Bartle, who is described as holding various titles in the company that controls the CCRC's operations. At one point, the Administrative Law Judge made clear his view on Bartle's testimony:
The letter and the email reveal Mr. Bartle’s view that deadlines established by regulatory authorities performing the duties imposed on them for the protection of the public by the Legislature are not significant. This disregard, if not disdain, for the statutes and rules governing nursing home services and the enforcement of them is patent in the letter and e-mail, Mr. Bartle’s dismissive testimony about the shifting relationships of the various entities, his demeanor when testifying, and his evasive manner of answering questions when testifying. For these reasons, Mr. Bartle’s denial of the March 3 letter and much of his uncorroborated testimony are not accepted as credible.
My thanks to Karen Miller, Esq. for sharing this unusual ruling.
Friday, June 3, 2016
The Pew Research Center reports that for the first time in the modern era, more adult children ages 18 through 34 are living with their parents than living in other arrangements:
Broad demographic shifts in marital status, educational attainment and employment have transformed the way young adults in the U.S. are living, and a new Pew Research Center analysis of census data highlights the implications of these changes for the most basic element of their lives – where they call home. In 2014, for the first time in more than 130 years, adults ages 18 to 34 were slightly more likely to be living in their parents’ home than they were to be living with a spouse or partner in their own household.
It seems likely that this trend has long-range significance for both young adults and aging families.
Friday, May 27, 2016
Robert A. Mead, with many years of experience as a law librarian at the University of Kansas, the University of New Mexico and the New Mexico Supreme Court, and now serving as the Deputy Chief Public Defender for New Mexico, recently offered his take on claims made by family members and third-parties under state "filial responsibility" laws. His article, "Getting Stuck with the Bill? Filial Responsibility Statutes, Long-Term Care, Medicaid, and Demographic Pressure," appears in the Elder Law Advisory published by Westlaw in May 2016 (and apparently available by subscription only). He tracks the demographics of aging in the U.S. and surveys cases from Pennsylvania, North and South Dakota. Based on research, Rob predicts:
The doubling of the number of elders in society will require a substantial increase in Medicare and Medicaid funding especially if a significant percentage of them are indigent in their last years. Without this increase, filial responsibility statutes and Medicaid estate recovery will likely be used by states to address shortfalls in Medicaid funding. . . . Even without state authorities using filial responsibility statutes to seek Medicaid reimbursement, they will continue to be raised in related contexts. When siblings spar over the medical debts incurred by their deceased statutes and the effect of these debts on the probating of estates, filial responsibility becomes a complicating factor such as in Eori, Pittas, and Linderkamp cases. More insidiously, long-term care facilities are beginning to use filial support statutes to seek reimbursement for debts without waiting for resolution of whether the elder was eligible for Medicaid, as in Randall and Pittas. In some situations it will be financially advantageous for facilities to litigate against heirs rather than to settle for lower Medicaid rates. As the case law continues to develop and the demographic crisis grows, look for these novel uses of filial responsibility statutes to continue and become mainstream. It is incumbent upon lawyers representing clients in states with such statutes to plan and draft accordingly.
It is fun for me to see that Rob Mead, a former student from my own days at the University of New Mexico School of Law, has, entirely independent of my influence, kept his own eye on law and aging policy issues.
Thursday, May 26, 2016
Senior residential care provider Life Care Centers of America is the focus of recent legal news, including:
- KOAA TV 5 News: Colorado Jury Awards $5.5 million in wrongful death suit against Life Care Center of Pueblo.
- Chattanooga Times Free Press: Settlement May be Brewing in Government's Longtime Federal Case alleging False Claims - Billing Practices by Life Care Centers of America
Plaintiffs' Class Certified in Dispute over LTC Insurance Coverage for Care by "Managed Residential Communities" or "Assisted Living Services Agencies"
As we've reported fairly often on this Blog (see e.g., here, re California litigation), the long-term care insurance (LTCI) industry has been battling disputes on many fronts. One of the fronts is whether insurers can deny benefits to pay for care provided in settings other than "skilled nursing facilities." On March 1, 2016, a federal court in Connecticut granted class certification to estates and policy holders who are challenging denial of coverage for stays in "managed residential communities" (MRCs) in Connecticut or to cover services provided through "assisted living services agencies" (ALSAs). In Estate of Gardner v. Continental Casualty Company, 2016 WL 806823, the court agreed the plaintiffs had satisfied the class certification requirements for "numerosity," commonality, and typicality of issues, as well as establishing grounds to argue "imminence of injury" to support a claim for injunctive relief:
While Plaintiffs do seek monetary relief, it appears to the Court that what they primarily seek is forward-looking relief. Plaintiffs purchased long-term care policies, presumably with the expectation that they would utilize their coverage over a long term. Any adequate remedy would have to ensure that they could obtain coverage for claims prospectively. For that, an injunction is required. Moreover, Plaintiffs leave no ambiguity about the content of the injunction they seek: an end to Defendant's alleged policy of denying claims for assisted-living facilities across the board. This is exactly the type of relief Rule 23(b)(2) was designed to facilitate. Because Plaintiffs' proposed Rule 23(b)(2) class satisfied all of the requirements of Rule 23, certification is proper.
For more on the background of the Connecticut case, see "Connecticut class action accuses insurer of denying assisted-living claims."
Tuesday, May 24, 2016
On April 28, 2016, the Texas Court of Appeals affirmed an award of some $145k in damages to an elderly couple for breach of a "Life Care" contract by their residential community. In Barton Creek Senior Living Center, d/b/a Querencia at Barton Creek v. Howland, the residential community staff attempted to refuse to communicate with the children of a couple, in their 80s, on the reported grounds that "communication with their children was unworkable because of the discord with the children." The facility, Querencia, reportedly soon "terminated the Life Care Agreement with the Howlands and ordered them to vacate the premises within thirty days." The Howlands did vacate the premises, moving to an assisted living community with a different pricing and service structure; however, they contended they were denied the "benefit of their bargain" with Querencia.
On appeal, Querencia does not challenge the finding that it failed to comply with the Life Care Agreement, but contends that the evidence is legally and factually insufficient to support the damages awarded to Howland. Specifically, Querencia argues that the damages cannot be tied to the pre-termination notice being 30 days instead of [the contract's specified notice of] 60 days. It also contends that Howland does not deserve damages for assistive services used after termination that they were already using before termination. Finally, Querencia contends that it properly withheld ten percent of the Howlands' deposit pursuant to their contract.
The appellate court rejected these arguments with a textbook discussion of remedies for breach of contract necessary to protect the non-breaching party's expectation interest:
Although the Howlands employed private care providers while at Querencia, there is evidence that the Howlands' move to The Summit increased their monthly expenses because the monthly rent was higher at The Summit, it provided fewer services than Querencia, and services at The Summit were more expensive.... Howland claimed over a million dollars in damages, Querencia countered that Howland profited from the breach, and the jury awarded Howland $82,500 plus the unrefunded deposit. The evidence in the record supports the jury's exercise of its role as factfinder regarding the damages award. The evidence also supports the jury's award of $62,990 representing the portion of the Howlands' deposit that Querencia did not refund. Querencia asserts that it was entitled to retain ten percent of the Howlands' deposit under the terms of the Life Care Agreement. But the jury found that Querencia breached that agreement, and restitution is a permissible measure of damages for breach of contract.... The jury was empowered to and did decide that Querencia must compensate for its breach by returning the final ten percent of the Howlands' deposit.
The finding of breach appeared to have been predicated on the contract's specified grounds permitting termination, which included fairly standard provisions such as inability to meet medical needs, nonpayment by the residents, or a resident's breach of "policies and procedures" that create a situation that is "detrimental to the health, safety or quiet enjoyment of the community by other residents or the staff." The court appeared to be persuaded by the argument that Querencia failed to comply with a further contractual provision, mandating parties be given an "opportunity-to-cure" in the event of disputes.
Despite the affirmance on damages, the appellate court also set aside the trial court's award of $166k in attorney's fees for the plaintiffs, rejecting a "lodestar" argument for the award, and remanded the case for further proceedings on reasonable and necessary fees.
In reading the opinion (and the headnotes from Westlaw on the opinion, which refer to Querencia as a "nursing home"), I'm struck once again by the confusion that "continuing care" contracts, including so-called "life care" contracts, can cause for parties, although usually any landmines tend to affect resident rights, rather than providers. Thus, I would anticipate that in the future, providers worried about protecting their right to terminate relations with "troublesome" individuals, will attempt to beef up their "policies and procedures," to give clearer rights to refuse to communicate with troublesome family members of residents.
Sunday, May 15, 2016
As reported in several financial news services, including McKnight's Long-Term Care News here, HCR ManorCare, owner/operator of a large number of skilled nursing and assisted living properties, is to be spun off by its corporate parent, HCP Inc., into the hands of "an independent real estate investment trust" called, appropriately enough, "SpinCo."
Certainly this seems to be a move to improve the financial position of HCP by separating the nursing home operations from independent living operations; it remains to be seen whether it also allows "troubled" HCR ManorCare to resolve concerns about quality of care and billing practices. The business history of ManorCare, with all of its various partners and name changes, probably serves as a marker for changes throughout the skilled care industry. For ManorCare's own perspective on its history, see "Our History Is Still Being Written."
Friday, May 13, 2016
Evict, Reject, Discharge: Are Nursing Homes Following the Rules or Is the Problem Bigger than "Rules"?
My colleague Becky Morgan posted earlier this week on the AP news story on nursing homes' attempts to evict difficult patients. This week the ABA Journal also linked to the AP story, plus tied the statistical reports of a nation-wide increase in complaints about evictions, rejections and discharges to one man's struggle to return to his California care center following what should have been short term hospitalization for pneumonia.
The story of Bruce Anderson is a reminder that a need for high-quality, facility-based "long term " care is not limited to "elderly" individuals. But it is also a reminder that individuals with serious behavioral issues, not just physical care needs, complicate the picture. Anderson experienced a severe brain injury at age 55 following a heart attack, but his younger age, lack of "private pay resources," and a history of apparently problematic behavior, are all reasons why a "traditional" nursing home may seek to avoid him as a resident.
The ongoing California litigation over Mr. Anderson and similarly situated residents heightens the need to think critically about whether we're being naive as a nation about "home is best" shifting of funding resources. Certainly there are many -- and probably too many -- individuals in facilities when they could be maintained at home if there was more funding to supplement family-based care.
At the same time, I tend to see this as downplaying the very real needs for high-level, behavioral care for individuals who aren't easily cared for by families or "traditional" nursing homes, much less by hospitals organized around critical care. It is about more than mere eviction, discharge and rejection statistics. The 1999 Olmstead decision was a watershed moment in recognizing the need for de-institutionalization of those with disabilities. But it may have pasted over the real need for quality of assistance and care in any and all settings, and what that means in terms of costs to a nation.
My thanks to Professor Laurel Terry at Dickinson Law who took time away from the fun of grading her exams to send us the ABA story.
Tuesday, May 10, 2016
Let's just start by saying the article I'm about to cite is a must-read for us.
The AP did a story on May 8, 2016, Nursing homes turn to eviction to drop difficult patients. The article opens "Nursing homes are increasingly evicting their most challenging residents, advocates for the aged and disabled say, testing protections for some of society's most vulnerable...Those targeted for eviction are frequently poor and suffering from dementia, according to residents' allies. They often put up little fight, their families unsure what to do. Removing them makes room for less labor-intensive and more profitable patients, critics of the tactic say, noting it can be shattering."
The AP did a study of data from the Long-Term Care Ombudsman Program and learned that complaints regarding involuntary discharges have increased by about 57% since 2000. "[Discharge] was the top-reported grievance in 2014, with 11,331 such issues logged by ombudsmen, who work to resolve problems faced by residents of nursing homes, assisted living facilities and other adult-care settings." Why this increase in discharges? The article offers that the involuntary discharge often happens "because the resident came to be regarded as undesirable — requiring a greater level of care, exhibiting dementia-induced signs of aggression, or having a family that complained repeatedly about treatment, advocates say. Federal law spells out rules on acceptable transfers, but the advocates say offending facilities routinely stretch permitted justifications for discharge. Even when families fight a move and win an appeal, some homes have disregarded rulings."
The American Health Care Association offers an opposing view of the discharges, explaining that in some cases it is "lawful and necessary to remove residents who can't be kept safe or who endanger the safety of others, and says processes are in place to ensure evictions aren't done improperly."
The article also includes examples where a resident is admitted to a hospital and when ready to return to the nursing home, is refused readmission. Several cases are highlighted in the article, with experts from both sides of the issue offering opinions. The article also references staffing levels and the trauma encountered by residents who find themselves in a discharge situation.
Have your students read the applicable federal statute and then this article. I guarantee an interesting discussion.
Monday, April 18, 2016
Arizona State University is considering plans to develop a Continuing Care Retirement Community (CCRC) near its main campus, working with Pacific Retirement Services (based in Oregon) as a co-developer and operator. From the announcement:
ASU is working with the ASU Foundation, who has hired Pacific Retirement Services to co-develop and operate the project. Artistic renderings depict a gleaming a 20-story building with 291 independent, assisted, memory care and skilled nursing units....
ASU is currently in discussion with Mayo Clinic, Osher Lifelong Learning Institute and ASU’s nursing, health, innovation, nutrition, arts and design and teaching programs as potential partners. Other amenities include casual dining, health club, game room, estate planning, concierge service, classroom and intergenerational childcare programming....
ASU is currently conducting a marketing and feasibility study about the facility, which would ground lease approval from the Arizona Board of Regents. If approved, construction could begin in 2018 and begin accepting residents in 2020.
For more, read Arizona State University to Build CCRC on Campus, from Senior Living publication.
My thanks to Karen Miller, J.D., who lives in a successful CCRC affiliated with the University of Florida.
Addendum: After posting the above information about ASU's possible project, I noticed that Arizona State University is a named co-sponsor of what appears to be three-day education and business development forum called the ASU-GSV Summit. Bill Gates is a keynote speaker. What struck me as interesting is the summit, from April 18-20, is being held in California -- San Diego to be exact -- and not in ASU's home state. As someone who grew up in the Valley of the Sun, I've been watching the increasingly entrepreneurial spirit of ASU for some time, and this is more evidence.
Friday, April 15, 2016
The New York Times ran a story recently about a new trend in housing for elders---multigenerational homes. Multigenerational Homes That Fit Just Right are homes that, as the name implies, are designed for multiple generations of a family that live in the same house. "[A] growing number of families ... are seeking specially designed homes that can accommodate aging parents, grown children and even boomerang children under the same roof. The number of Americans living in multigenerational households — defined, generally, as homes with more than one adult generation — rose to 56.8 million in 2012, or about 18.1 percent of the total population, from 46.6 million, or 15.5 percent of the population in 2007, according to the latest data from Pew Research. By comparison, an estimated 28 million, or 12 percent, lived in such households in 1980."
But how does one accommodate family dynamics when living together under one roof? In fact, the story notes, many of the multigenerational households do live in an "ordinary" home. But, it appears that the building industry has developed an option that is catching on, "responding quickly to this shifting demand by creating homes specifically intended for such families." For example, one builder's homes "don’t offer just a spare bedroom suite or a “granny hut” that sits separately on the property or a room above a garage. The NextGen designs provide a separate entranceway, bedroom, living space, bathroom, kitchenette, laundry facilities and, in some cases, even separate temperature controls and separate garages with a lockable entrance to the main house. Family members can live under the same roof and not see one another for days if they so choose."
The article explains the drivers for the trend, baby boomers (of course), the 2008 recession, tough job market and higher rents facing millenials, the boomerang children and again, those baby boomers, "[m]any [of whom] are planning ahead in hopes that they can devote more attention to their children and grandchildren — and spend little, if any, time in a nursing home."
Expect to see more of these multigenerational homes over the next years. From a legal perspective, it seems that ground rules, a family contract and a care would be important to the success of the venture (whose turn is it to cut the grass this week? No loud music after 11 p.m. as a couple of an examples). What an interesting concept of the market changing to accommodate demand.
Monday, March 28, 2016
From the New York Times, courtesy of reader and Bethesda, Maryland Elder Law Attorney Morris Klein, comes a demonstration of just how "clued in" the world of senior living has become. A recent article begins with the background of ShantiNiketan in Florida, and continues with other descriptions of creatively-designed assisted living, nursing facilities and day programs serving ethnic communities around the country, including Chinese-Americans:
Indian immigrants who came to the United States in the 1960s and ’70s for educational and work opportunities have begun to downsize and contemplate their postcareer years, said Iggy Ignatius, 60, ShantiNiketan’s chairman. “Many people were thinking they’d go back to India, but pragmatically it’s not possible,” he said. “Our children are here. Our grandchildren are here.”
In Florida, from the architecture that reminds Dr. Chandran of Chennai, India, to the vegetarian meals and Bollywood dance classes, “we have created a mini-India, a piece of India,” Mr. Ignatius said. The Chandrans moved into their three-bedroom condominium in 2011, paying $250,000, and now they lead yoga classes in ShantiNiketan’s meditation room.
For more, read the always interesting Paula Span's full article, A New Spin on Senior Living.
Thursday, March 24, 2016
Earlier this week, I reported on the Florida Office of Insurance Regulation's actions affecting University Village, a Continuing Care Retirement Community (CCRC) in west Florida. Additional events are now coming to the surface in media reports, including turmoil with employees over salary and benefits:
Workers from the Nursing Center at University Village made a lot of noise walking a picket line, protesting salary caps and reductions in benefits. This labor unrest comes while the new owners of University Village, Westport Holdings of Tampa, struggle to stop the state from yanking their license and shutting them down.
Health care workers represented by the Service Employees International Union are protesting working without a contract since December. Westport Holdings claims through the years the University Village nursing center was overly generous to its employees, and it’s time to reel in costs.
“What do they consider to be generous? I’ve been working with them for over 20 years and I haven’t seen $20 an hour yet,” Scott said.
Management wants to cap salaries and reduce health care benefits. It contends workers at University Village are paid more than employees at other local facilities.
For more, see News Channel 8's report on Employees Protest Benefit Cuts at Embattled Hillsborough Retirement Community.
Sunday, March 20, 2016
On March 16, 2016, the Florida Office of Insurance Regulation issued suspension orders affecting University Village, a Continuing Care Retirement Community (CCRC) in Tampa, Florida. Long-Term Living publication reports:
The first order states the facility was acquired illegally. IMH Healthcare, LLC, the general partner of the new ownership, does not have approval to operate as a licensed CCRC provider.
The second order makes several allegations against University Village for violating provisions of Florida’s Insurance Code for:
failing to comply with the OIR’s target examination and filing false information;
failing to fulfill statutory and contractual obligations to residents, estates of former residents and prospective residents, including failing to pay more than $4 million in refunds owed to residents;
continuing to accept new residents while being financially insolvent; and
engaging in fraudulent or dishonest management practices.
For more on the OIR action, read Tampa Times coverage, "Florida Officials Move to Suspend Tampa's University Village Retirement Home."
The events that led to this state action are somewhat unusual. For earlier reports on the long-simmering issues, see Channel 8 News Report from September 2015: "Owner Claims, State Lying, Retirees Suffer." See also a Tampa Bay Times article from February 2015, "State Looks into Alleged Financial Problems at Tampa Retirement Community."
Friday, March 18, 2016
Does California's New "Revocable Transfer on Death (TOD) Deed" Increase Risk of Elder Abuse and Estate Costs?
Colleagues in California recently shared with me information on California's adoption of statutory recognition of "Transfer on Death Deeds" or TODs under AB 139. The law was signed by the Governor on September 21, 2015 and became effective on January 1, 2016. The law includes "simple" forms, both for establishing the "revocable" transfer of title, and for any "revocation" of such a deed. Proponents of the legislation cite simplicity and low cost as advantages of using such deeds. The legislative history for the law explains:
The bill would provide, among other things, that the deed, during the owner’s life, does not affect his or her ownership rights and, specifically, is part of the owner’s estate for the purpose of Medi-Cal eligibility and reimbursement. The bill would void a revocable TOD deed if, at the time of the owner’s death, the property is titled in joint tenancy or as community property with right of survivorship. The bill would establish priorities for creditor claims against the owner and the beneficiary of the deed in connection with the property transferred and limits on the liability of the beneficiary. The bill would establish a process for contesting the transfer of real property by a revocable TOD deed. The bill would make other conforming and technical changes. The bill would require the California Law Revision Commission to study and make recommendations regarding the revocable TOD deed to the Legislature by January 1, 2020.
Critics of the law, including California Advocates for Nursing Home Reform (CANHR), warn that despite the "simple" label, the appropriate use of such transfers in estate planning is anything but simple, and such deeds pose another opportunity for undue influence and manipulation of elders.
The spring issue of CANHR's Advocate newsletter (available via subscription, following a "donation" to the organization) further comments:
It is important to note that thousands of California citizens who are 55 years of age or older and who have recently signed up for health care under California's Medic-Cal expansion program will now have their estates subject to Medi-Cal recovery when they die. If their homes were transferred before their deaths, transferred to an irrevocable trust or if they transferred the property and retained an irrevocable life estate (another cheap, but effective way to transfer property) there will be no estate claim on the home. But, because the [new law's] TOD is revocable and the transfer and the transfer of the property under a TOD does not occur until the death of the owner, these TODs are subject to estate recovery, which means that those same low-income elders, who are likely to execute TODs will also be more likely to be on Medi-Cal and thus [inadvertently] subject their estates to recovery.
CANHR is "embarking on a campaign to educate consumers about the impact" of the new California law.
Wednesday, March 9, 2016
This week is Spring Break for our law school and I've had a bit of time to catch up on my stack of "must read" books. Here are two that caught my attention:
Settling In: My First Year in a Retirement Community, by Richard L. Morgan (2007):
"At age seventy-four, I left my home in the state of North Carolina, which I dearly loved and where I had lived for fifty years, to come to a retirement community in Pennsylvania. In a real way, I left my identity, forged over years of hard work and experience, to start a new life as a relative nobody. At times I endured sleepless nights, worrying if I had made the right decision."
With that beginning, the writer tracks his evolution in thinking about a retirement community, candidly describing excitement and depression, while achieving a growing sense of engagement with his new environment. A retired Presbyterian minister, the writer uses both religious and non-religious texts to supplement his thinking. There's a real honesty here that transcends any religion, and the book seems useful not just for new or prospective residents but also for adult children and care-givers.
What's the Deal with Retirement Communities?, by Brad C. Breeding, Certified Financial Planner (2014):
I met the author a few years ago while he was in the development phase of a project to provide consumer-friendly internet materials on continuing care retirement communities (and more on that in a few days!). But he also has a helpful little book that offers objective information on how to assess a community, including chapters on understanding various types of contracts and financial viability factors. A good place to start for someone who wants to ask the right questions.
Wednesday, March 2, 2016
The New York Times ran a story at the end of February about the appeal of a Continuing Care Retirement Community or CCRC. (Just a note that LeadingAge, a group of aging service organizations is using Life Plan Communities). The Everything-in-One Promise of a Continuing Care Community examines the appeal of CCRCs. Looking at how it works, the article discusses the often-times hefty entrance fee and compares that to a "fee for service model". The article explains what one gets (and what one doesn't) when one is signing a CCRC contract: "[k]eep in mind that few of these contracts involve direct, conventional purchase of a housing unit. In most cases, the resident buys only the lifetime right to live in a community, take advantage of its range of amenities and services, and receive care there. The units generally are not bought and sold on the open market."
My co-blogger, Professor Pearson is quoted in the article discussing regulatory oversight and transparency:
“There’s a lack of transparency with C.C.R.C.s that’s resulted in weaker trust,” said Katherine C. Pearson, a professor at the Dickinson School of Law of Pennsylvania State University who has testified before Congress on the issue. “You need to visit several facilities, talk to residents, look at past cost increases and five years of financial records.”
Professor Pearson, who talks with continuing care community residents around the country, said there was no one rule of thumb to use when evaluating these communities. A prospective resident generally wants a community that is active and engaged and “supports healthy living,” she said. But given the magnitude of the decision (after all, it is often the last major purchase someone will ever make), it deserves very careful consideration.
“Get as much financial information as you can,” she said. “This is not an impulse buy.”
The article offers some practical advice when considering a CCRC. The article notes it isn't as easy as an apples to apples comparison since there is no government rating system of CCRCs and "[t]he major drawback in evaluating continuing care communities is the complexity of their contracts, which come in a number of variations. Some may require a deposit of up to $1 million, while others may charge only monthly fees. Refunds may be difficult to obtain and depend upon the length of stay and other requirements. Contract details have to be read carefully and financial statements reviewed." The article suggests
- review of the contract by a team of professionals, and look specifically at the contract regarding refunds of the entrance fee, whether there is a rescission period, how a decision is made if the resident needs a higher level of care and the financial stability of the company.
visiting the CCRC and talking to residents and staff. Visit all areas of the CCRC.
compare several CCRCs and check with the appropriate state agency for any complaints filed vs. the CCRC. Ask around-the article suggests the local senior center might be a good place to find out more.