Elder Law Prof Blog

Pittsburgh-Post Gazette Editorial: "A Tipping Point" for Private Equity Firms in Nursing Homes

Recently, the Pittsburgh Post-Gazette's online publication carried an editorial on a very hot topic, the impact of private equity investment in nursing homes.  The opening paragraph sets the stage for the argument:

The long-term mismanagement of nursing homes by private equity firms has reached a tipping point, resulting in over 20 bankruptcy filings in local elder care facilities in just a few weeks. It’s only the beginning of turmoil for nursing homes run by private equity, and the terrible results should be a lesson guiding future oversight.

As the article explains, while there are a host of bankruptcies in the Pittsburg area, the problem is not "just" a local issue.  Further, the editorial tracks a corporate strategy designed to separate the operational side of the business from the more lucrative "management fee" side of the business, observing: 

Private equity firms extract money from nursing homes in a process called a “sale-leaseback,” or selling the land out from under the facilities for lump payments. Nursing homes are suddenly forced to pay rent or “management fees” to occupy facilities they once owned. This is the same process, in a much less sensitive business, that resulted in the bankruptcy of the Red Lobster restaurant chain.

I once tried to explain to a financial advisor that I wanted nothing to do with investments by private equity into for-profit health care, and especially into nursing home care, as I personally could see no easy way for profit-seeking to create better quality of care.  Did they listen?  It is hard to know.  But, as the editorial also points out, new federal Medicare/Medicaid rules now seek to compel facilities to "disclose their ownership." 

The editorial concludes with especially strong wording, expressing hope that disclosure rules will help to "shift incentives against vulture capitalists, and toward operators that put their patients, not profits, first."  

For more read,  Pittsburgh Post Gazette Editorial, "Private Equity and Nursing Homes are a Match Made in Hell." 

 

Report on 2024 Annual Sonya L. Patterson Memorial Elder Abuse Symposium in Oklahoma

Recently, I participated in a well-organized CLE event, offered annually as a memorial to a great attorney who passed away too soon.  The Annual Sonya Patterson Memorial Elder Abuse Symposium  is hosted by Legal Aid Services in Oklahoma.  By all accounts, Sonya Patterson, who died in an accident while just a few years into her already notable career as an attorney, is a proper subject of this tribute, as she was deeply concerned with advocacy for individuals who may be victims of abuse, exploitation or neglect.                             

Cutting edge topics were a big part of the summer 2024 program.  For example, one new concern is about "dirty deeds," where fraudsters record deed transfers, often targeting properties without any mortgages, and thus often targeting the equity earned by older owners.  We heard from hard-working staff members in the Oklahoma County Clerk's office in Oklahoma City, where the county has created a registry/notification system for owners as a way to receive an "alert" about potential fraud. In one instance, the fraudster was arrested while in the act, at the County Clerk's office!  We also heard about the very real need for pro bono legal assistance on this topic, as many older owners may not have ready savings or cash to pay private attorneys to catch and cure the fraud.  

Here was the full lineup for 2024 Symposium::

• Introduction to Elder Abuse Law: Cassandra Bobbitt & Richard Goralewicz
• Ageism:  Richard Goralewicz
• Step by Step, Slowly it Can Happen: Examining Dynamics of Conflicts of Interest for Lawyers in Representation of Older Persons and Families
• Oklahoma Legislative Responses to Elder Abuse: Oklahoma Representative Nicole Miller
• Cleaning Up "Dirty Deeds," by representatives of a County's Deed Recording Office and Attorney Christopher Jones 
• Recognizing and Responding to Elder Abuse in Indian Country: Peggy Jo Archer, Judith Kozlowski, Margaret Carson
• Undue Influence and Its Ethical Implications: David M. Postic, Adjunct Professor at University of Oklahoma College of Law

At the invitation of Rick Goralewicz, senior law project attorney with Legal Aid Services in Oklahoma, I used the visually interesting tale of a real-life Irish Pub to discuss very real consequences of failing to recognize conflicts of interest for attorneys attempting to represent both the older adult and other family members on planning transactions.  My special thanks to Rick and Attorney Ana Reynolds for inviting me again this year!  

 

Meet Crystal West Edwards, a Leader in Elder Law, Special Needs and Estate Planning, who is Meeting the Needs for a Diverse Range of Clients

One of the nicest aspects of getting older as an educator is witnessing how your former students are adapting and thriving in a changing world.  It seems like every week I hear from a former student who wants to share experiences.   Bring it on!  Such calls, emails and texts put a big smile on my face!  

Very recently, I had the opportunity to do a formal interview of a former student.  Crystal West Edwards is a 2008 Dickinson Law graduate.  In law school, Crystal quickly identified the intersection of health law, family law and planning issues as her "place."   And I'm smiling -- and sometimes  joining her in laughter -- throughout her account of daily life as a lawyer.  For more on Crystal's remarkable and successful path in advocacy for older adults, special needs clients, and families with estate and planning concerns, including clients of color, join us for the recording of our interview.  The interview -- available on YouTube --  is part of a new series on Profiles in Leadership, hosted by Dickinson Law Professor Daryl Lim, Associate Dean for Research and Innovation.  

Here is a direct link to cut & paste:

https://youtu.be/DMgMPFB6zPQ

 

What Happens When Living Isn't Easy in Senior Living?

 

More than 300  lawyers and other professionals attended the recent Pennsylvania Elder Law Institute (July 25-26, 2023) held in Harrisburg. It was good to be back among long-time friends as well as new colleagues -- our first time together in "real time" since 2019.  The programming began with a tribute to Jeffrey A Marshall, recently retired as a Williamsport, Pennsylvania attorney, who has been a guiding figure for the development of speciaized knowledge and skills for lawyers committed to helping older persons and their family members with practical concerns about care, financing, capacity, agency and more. 

This year the program once again began with a comprehensive "Year in Review" that focuses on recent and proposed legislation or rulemaking, demographic trends, and case law.  Deep appreciation to Marielle Hazen and Rebecca Hobbs for all of their hard work on this key presentation.  Important "keynote"speakers included David Lipschutz, Associate Director for the Center for Medicare Advocacy and legendary Tennessee Elder Law attorney Timothy Takacs.  

I had the pleasure of teaming with Katie Dang and A.V. Powell for a 90-minute session about "What Happens When Living Isn't Easy in Senior Living?" Central topics included concerns about contract rights and obligations in nursing homes, plus we made a deep dive into factors that can affect financial soundness of continuing care retirement communities (also known as CCRCs or life plan communities). 

Katie reported on successful efforts to avoid a one-sided contract of adhesion and help a family negotiate fair payment terms for a parent's admission to a nursing home.  She demonstrated key language to strike or modify to reduce the potential for unintended consequences of signing such agreements.

We also reported on a recent Ohio appellate case that rejected a nursing home's attempt to argue a family members was contractually obiligated to personally pay for care.

 

A.V. brought to the conversation his dry wit and 40+ years of  experience as a professional actuary.  He has analyzed the fiinancial viability of hundreds of CCRCs around the country.  He noted that Pennsylvania is the birthplace of the CCRC concept and he emphasized the significance of current residents who seek accountabiity by making requests to governing boards for timely evaluations of financial conditions.  A.V. also provided us as lawyers with ways to guide clients who are prospective residents in identifying how an enterprise can provide long-range reassurances about sound finances.   Trust is essential for a model that offers, on the one hand, a holistic approach to purpose-buldt housing, great food (and nutrition), activity and, if needed, nursing or dementia care, but, on the other hand  also expects people to pay thousands of upfront dollars in the form of admission fees plus significant monthly maintenance fees.    

Photos used here are by my summer research assistant, the great Noah Yeagley.  Thank you, Noah!  One of the fun aspects of this conference is being able to introduce current students to practitoners and getting to catch up with so many of my former Penn State Dickinson Law students, including Jared Childers, the incoming Chair of the Pennsylvania Bar's Elder Law Section, and who recently became an adjunct professor at Dickinson Law.  Congratuatlions, Jared!  

Widener Univ. Commonwealth Law School's Clinical Students to Serve as Monitors in Pennsylvania Guardianship Program

Mary Catherine Scott, Director of the Central Pennsylvania Law Clinic at Widener University Commonwealth Campus, has recently partnered with Dauphin County Orphans' Court in Harrisburg, Pennsylvania to expand her clinical students' opportunities for service. Law students will now have roles as monitors in guardianship cases, seeking to maximize the interests of protected persons.  The Pro Bono Guardianship Monitoring Program was begun in central Pennsylvania by the Honorable Todd Hoover, and is now overseen by Dauphin County Court of Common Pleas Judge Jeffrey Engle, involving as many as 400 active cases.  The monitor program is another component of the Pennsylvania courts' enhanced protections for older persons and other persons found to be in need of certain assistance.  Pennsylvania also has a state-wide Guardianship Tracking System. 

This is another example of expanding services to older adults in Pennsylvania, an outgrowth of the Elder Justice Consortium, supported by representatives of all nine law schools in Pennsylvania.    

Residents Are Asking a Lot of Questions -- Tough Questions -- about CCRCs

It is Sunday, and I'm looking at a long list of things to do next week, with grading exams at the top of my list.  Significantly, however, in the last six to eight months, at increasing rates, I'm hearing from current and prospective residents of Continuing Care Retirement Communities (CCRCs, also sometimes called Life Plan Communities).  Here are examples of some of the most often asked questions:

• "The company that runs my CCRC is about to engage in development of a new CCRC.  Is the money I've already paid in the form of an admission fee, or the money I continue to pay as monthly service fees, going to support this new development?"
• "During the lock-down associated with protecting residents and the public from COVID-19, we were asked to give up services that were the very reason we choose this community.  But now that we are no longer locked down, the services either are not returning or the fees we are charged are actually increasing.  Is there some effective way to object to this disconnect between the promises and the delivery of services?"
• "My parents are thinking about moving into a CCRC.  On the one hand, I like the idea of the active community they are choosing.  But on the other hand, the amount they are expected to pay in the form of an admission fee is astounding.  Why are some communities calling this a refundable fee and others are saying it isn't a refundable fee? What are the protections for the 'refundable' fee?"
• "We have just learned that our nonprofit CCRC is being transferred to a for-profit company as the owner-operator.  How is this likely to impact my wife and I as residents?"

Answers to many of these questions depend on the state's laws governing this form of senior living operation and, even more, on the particular contracts between the resident and the provider.  State regulators have concerns here too.  For those looking for legal assistance in their particular community, I sometimes recommend looking for attorneys in the caller's home state, someone who understands CCRCs from a resident perspective. I first wrote about the need for attorneys who understand resident perspectives in 2006.  

Sometimes "elder law" attorneys have this expertise, but not always.  Plus, it can be important to consult with an attorney who understands consumer protection laws, and not "just" CCRC law.  Finally, if litigation is actually on the horizon, the choice for legal advice can depend on whether the attorneys have expertise in litigation or dispute resolution and not "just" contract law. 

So, all of this is a short way of saying that even though, as an legal academic,  I often write about the importance of resident rights in CCRCs, and even though I believe the future of CCRCs is very much tied to the answers, I'm not in a position to respond to individual questions. The very fact that I'm writing this Blog Post is a potential indication that something important could be going on in the industry.  Perhaps that "something" should be addressed by the industry itself, especially if it wants the CCRC concept not just to survive, but thrive.  In my opinion, it is not enough for the industry to say that "every CCRC is different."  

Highlights from Touro Conference on Aging, Health, Equity, and the Law (9.13.21)

Touro College's Jacob Fuschberg Law Center hosted a fabulous half-day, interdisciplinary program on Aging, Health, Equity and the Law.  Among the highlights:

• A perfect kickoff with opening remarks on the theme of the conference from Syracuse Law Professor Nina Kohn, who outlined the civil rights of older persons, reminding us of existing laws and the potential for legal reforms;
•  A unique "property law" perspective on the importance of careful planning about ownership or rights of use, in order to maximize the safety and goals of the older person, provided by Professor Lior Strahilevitz from University of Chicago Law School;  
• Several sessions formed the heart of the conference by taking on enormously difficult topics arising in the context of Covid-19 about access to health care, including what I found to be a fascinating perspective from Professor Barbara Pfeffer Billauer  from her recent work in Israel. She started with an interesting introduction of three specific pandemic responses she's identified in her research. She then focused on how "Policy Pariah-itizing" has had a negative effect on health care for older adults, with examples from Israel, Italy, and China.  I was also deeply impressed by the candid presentations of several direct care providers, including nursing care professionals Esperanza Sanchez and Nelda Godfrey, about the ethical issues and practical pressures they are experiencing; 
• Illinois Law Professor Dick Kaplan offered  timely perspectives on incorporating cultural sensitivity in Elder Law Courses.  His slides had great context, drawing in part from an article he published about ten years ago at 40 Stetson Law Review 15;
• Real world examples about tough end-of-life decisions involving family members and/or formally appointed surrogates, with Deirdre Lock and Tristan Sullivan-Wilson from the Weinberg Center for Elder Justice leading breakout groups for discussions.

I know I'm failing to mention other great sessions (there were simultaneous tracks and I was playing a bit of leap-frog).  But the good news is we can keep our eyes out for the Touro Law Review compilation of the articles from this conference, scheduled for Spring 2022 publication.  I know it was a big lift to pull off the conference in the middle of the fall semester.  Thank you!

Pushing Back Against the Disappearance of the "County Home"

In Carlisle, a classic college town in Central Pennsylvania, the hottest topic at the moment is, surprisingly enough, the "county" nursing home.

"Save Claremont" signs outnumbered the political signs in the recent primary election.

A robust advocacy movement seeks to prevent the sale of Claremont Nursing & Rehabilitation Center, a publicly-administered facility with 282-beds to private enterprise.  In a detailed story carried by local newspaper, The Patriot News, both sides of the issue are making their pitches:  

 

The members of Citizens Saving Claremont are arguing the county not only can keep Claremont afloat, but with some effort, investment and leadership, they can make it thrive.

 

"It has been sustained for 192 years," said Tim Potts, one of the founding members of Citizens Saving Claremont. "This year, 2021, is the first year that we've had to use county money to support Claremont, and that's only on a temporary basis because of the impact of COVID." . . .

 

But that doesn't change the fact that Claremont is hemorrhaging money, Cumberland County Commissioner Gary Eichelberger said.  Projections show it will only get worse and will have to be propped up by taxpayer dollars.  

 

And the completion of a sales agreement could be just days away.

For some advocates, keeping the facility in public hands is about maintaining a commitment to citizens of all income levels, and they point out that Claremont's Medicare "star" rating has usually been higher than private enterprise nursing homes in the region.  As recently as 2002, as many as 40 of Pennsylvania's 67 counties had "public homes"; but, currently just 21 remain in county hands.

For more see Citizens Group Pushes to Save Claremont, published online behind a paywall on June 1, 2021 and on the front page of the traditional newspaper format on June 4, 2021.  

 

Unilateral Attempts to Change Scope of Services in Continuing Care and Life Plan Communities

With lockdowns being lifted in commercial arenas, I'm once again hearing from residents in Continuing Care Retirement Communities (CCRCs), also sometimes called Life Plan Communities, as well as other similar senior living settings.  The most frequently raised concern is "how can management of my community make major changes in services and amenities without asking us if we agree to a new contract?"  Sometimes I am able to recommend local legal counsel for the callers.

As a matter of theory, there's a traditional  "law-based" answer to this question, with state-specific tweaks.  And then there is what happens all too often in real life. 

Generally speaking, the law provides that unilateral attempts by one party to make significant changes in the parties' duties under a contract are not legally effective.  Here's one state Supreme Court's typical statement of the rule of law (written in the context of considering an employer's unilateral attempt to change an employment contract):

The cases dealing with employment contracts are merely part of the general rule that recognizes no difference between an express and an implied contract.... As a result, to effectively modify a contract, whether implied-in-fact or express, there must be: (1) an offer to modify the contract, (2) assent to or acceptance of that offer, and (3) consideration."

Demasse v. ITT Corp., 984 P.2d 1138, 1144 (Az. 1999).  As my law students know, "consideration" is a legal term of art, and generally means a "bargained for exchange." In the context of modification of existing agreements, this often involves new financial terms or mutual concessions in the parties' respective duties.

But, the real-life situation is that the party with the greater bargaining power simply ignores the bargaining process altogether. In employment contexts, that's the employer.  They treat their notice of major changes as "the new agreement" simply because no one objected.  That's not how the rule of law is supposed to work, but it does, all too often.  Indeed, I will confess that the very reason I started teaching Contract law was my growing familiarity with disputes in senior living scenarios that made me wonder if there was something about contract law I'd missed back in my own days as a law student.  There wasn't (although the full explanation would require a law review article) -- but the world keeps spinning along with the more powerful party in many commercial contexts able to avoid the contract because they are "in charge."  

Residents don't, however, have to put up with this.  Resident groups in individual CCRCs and those living in states where there are regional organizations have learned to flex their considerable muscle, both in negotiations with management and with state regulators or legislators.  I'm also hearing from more attorneys who are representing residents in negotiations, or when necessary, in arbitrations or on  lawsuits alleging breaches of contract and fiduciary duties.  Plus, I'm hearing from more states officials who are asking good questions.

It not a secret that I like CCRCs and I like them a lot.  I've visited CCRCs throughout the U.S. and they tend to be vital examples of senior living, offering community engagement, social networks, friendly-settings, caring service providers, and the reassurance of assistance if needed.  Many forms of senior living options are struggling with the impact of the pandemic, with enhanced pressures on facilities to balance their budgets. This is probably triggering a new upswing in attempts to make unilateral changes.  

I have worried, long before the pandemic, that an episodic  history of paternalistic or peremptory changes by management in CCRCs can undermine public confidence in this format as a viable alternative for seniors.  CCRCs have their highest value for consumers when residents are making the transition before becoming too frail to appreciated the amenities and services.  New residents may be unlikely to  "invest" in CCRCs if they lack confidence that promised services will be available when needed.  

Financial Capacity as an Alzheimer's Indicator?

Published recently in the New York Times, She Bought a Truck on eBay, Then Forgot It. A Dementia Diagnosis Came Later. discusses how a lack of financial capacity may be an indicator of dementia.

[M]oney troubles aren’t unusual among people who are beginning to experience cognitive decline. Long before they receive a dementia diagnosis, many people start losing their ability to manage their finances and make sound decisions as their memory, organizational skills and self-control falter, studies show. As people fall behind on their bills or make unwise purchases and investments, their bank balances and credit rating may take a hit.

The isolation that came from COVID may have allowed a number of cases to go undetected, since there wasn't the same level of interaction with folks. "Many older people have remained isolated from loved ones who might be the first to notice unpaid bills or unopened bank notices."  Check out the finding from one of the studies mentioned in the aticle

Another study, published in JAMA Internal Medicine in November, used data on Medicare claims and from the Federal Reserve Bank of New York/Equifax Consumer Credit Panel to track people’s credit card payments and credit scores. The study found that people with Alzheimer’s and related dementia were more likely to miss bill payments up to six years before their diagnosis than were people with no diagnosis. The researchers also noted that the people whose dementia was later diagnosed started to show subprime credit scores 2.5 years before the others.

Read this article---it's important!

Multi-Generational Housing Increasing

A recent study, Family Matters: Multigenerational Living Is On The Rise And Here To Stay, was recently published.

Generations United wanted to learn more about the effect of the vast COVID-19 pandemic on multigenerational living specifically, and at the end of January 2021 commissioned a public opinion poll, conducted online by The Harris Poll, to determine if multigenerational households were growing and what makes them tick. The survey results reported here give us insights as to the growth, why families plan to continue living together – and why it helps them be strong and resilient.

The findings are very interesting:

Our results are clear: multigenerational living is indeed on the rise in 2021, with more than 1 in 4 Americans (26%) living in a household with 3 or more generations. Given our finding in 2011 that 7 percent of Americans lived in a multigenerational household,4 this means that multigenerational living has nearly quadrupled in the past decade (a 271 percent increase from 20115 to 2021). This finding is incredibly striking, and our survey reveals some of the impetus for this staggering growth. As expected, the pandemic does play a strong role. Among those living in a multigenerational household, nearly 6 in 10 (57%) say they started or are continuing to live with multiple generations because of the pandemic.

The full report is available here.

A Veterans' Low Interest Mortgage Program that Doesn't Quite Add Up?

Today, Veterans' Day, I caught an interesting radio piece on the marketing of supposedly low-interest-rate loans for those who are or have service in U.S. military branches. I've been teaching a Nonprofit Organizations Law course this semester at Dickinson Law, and the lack of transparency in the various loan programs reminded me of a student's presentation about a "veterans' benefit" nonprofit organization that, until recently, seemed to be doing more fundraising for the organizers than for the military service people.  Misuse of "charitable" missions is a topic we explore in the class.

But, I caught the program a second time while driving.  The second time around I realized that the story started with a curious segment with a particular veteran who was describing his recent struggle with a misleading veteran-friendly loan company that charged more, not less, than conventional loans.  This time, I realized the interview included a tour of the older vet's lovely home on the water in Florida, and of his various boats. The borrower was clearly proud, and rightly so, and the interviewer even admitted to a bit of envy.  The loan he was seeking was to refinance about $350k for what seemed to be pretty high-end living and it was easy to be glad the older gentleman has done well in his post-service life. 

The radio interview and the accompanying article at NPR's Morning Edition site described low-interest loans, "backed by the U.S. Department of Veterans Affairs" as a "perk" offered to vets and service members in honor of their service. Wait a minute.  This wasn't a struggling veteran getting started in civilian life, perhaps needing help to buy a first or second home or to fund to start a new business.  This veteran was struggling to find the best terms in a veteran-friendly program -- not to "get" a loan.  

My reaction the second time while listening to the program about misleading loans to veterans was "wouldn't it be better if all consumers could rely on transparency and fairness in lending rates and terms?" 

Court Called Upon to Prevent Misuse of Law to Penalize Homeless People

As many of our regular readers know, I grew up in Phoenix, Arizona.  One of the developments I have followed over the years is the number of homeless residents of Phoenix.  I'm a cyclist in my spare time and one of my regular downtown bike routes in Phoenix takes me past an ever-growing encampment.  In addition, a large park near my parents' home now serves as a daytime gathering spot for many.  In the scorching heat of the summer, and the desert cold of the winter, there are more and more people without adequate shelter.  The New York Times recently pointed out that in contrast to historical statistics suggesting that nationwide, "elderly" persons make up a small percentage of the homeless population, in the last few years we are seeing a surge among older adults.  See Elderly and Homeless: America's Next Housing Crisis, a feature article published on September 30, 2020, that, in part, profiles the issues in Arizona.  

So, it was with great interest that I read a report on a federal appellate decision, limiting the ability of municipalities to use criminal laws to penalize individuals, in an attempt to discourage or remove people who are living on the streets.  The report is by one of  Dickinson Law's third year law students, Jacqueline Stryker.  She writes in part:  

"The city of Boise, Idaho attempted to fight homelessness in the community through a combination of its public camping ordinance and its disorderly conduct ordinance.  In Martin v. City of Boise, 920 F.3d 584 (9^th Cir. 2019), the 9^th Circuit Court of Appeals considered whether the Eighth Amendment’s prohibition on cruel and unusual punishment bars a city from criminally prosecuting people for sleeping outside on public property when those people have no shelter.  The Court concluded that it does.  A municipality cannot criminalize people who sleep outside when no sleeping space is practically available in any shelter. "

Ms. Stryker observes in her conclusion, "Whether the decision of the Ninth Circuit in Martin will gain traction a local governments grapple with the growing problem of homelessness and homeless encampments is yet to be seen."

For more of Ms. Stryker's timely, concise case analysis, see:  Municipal Efforts to Combat Homelessness.

California Appellate Court Rules CCRC Residents Are Protected From Mandatory Arbitration

For more than ten years it is probably fair to say that the most ubiquitous appellate "elder law" cases are those involving attempts by nursing homes to compel arbitration, rather than court-based litigation, usually raised as a defense to personal injury suits brought by residents or family members of residents.  Admission contracts routinely include mandatory arbitration clauses.  Arbitration is often promoted by nursing homes to prospective customers as offering efficient, cost-effective resolution for any disputes; however, seasoned attorneys also know that limiting disputes to arbitration is a means by which care-providers avoid trials by jury, publicly reported trials, and most court-based rules on procedure, rights to discovery and admissibility of evidence.   

This month, a California appellate court (Second District, Division 6) ruled that residents of continuing care communities are protected because of California laws interpreted as prohibiting mandatory arbitration in "rental agreements."  From the June 1, 2020 opinion in Harris v. University Village Thousand Oaks, CCRC, LLC:

Civil Code section 1953, subdivision (a), states, “Any provision of a lease or rental agreement of a dwelling by which the lessee agrees to modify or waive any of the following rights shall be void as contrary to public policy: [¶] ... [¶] (4) [Their] procedural rights in litigation in any action involving [their] rights and obligations as a tenant.”

 

... The plain language of Civil Code sections 1940 and 1953 applies to the continuing care contracts here because the fees paid by appellants include payment for the right to live in a residence. Appellants are thus “persons who hire dwelling units.” (Civ. Code, § 1940, subd. (a).) Thus, the protections for “boarders” and “lodgers” (Civ. Code, § 1940, subd. (a)) apply to the “board, or lodging” portions of continuing care contracts (Health & Saf. Code, § 1771, subd. (m)(1)). Because the allegations in the complaint here include claimed violations of “rights and obligations as a tenant” (Civ. Code, § 1953, subd. (a)(4)), the arbitration agreements are void.

The court discussed the reasons legislatures enacted statutory laws to "protect the rights of tenants."  It continued:

Elders entering continuing care contracts are entitled to the same protection as mobile home owners. Both groups face significant economic barriers to relocating. The Legislature recognizes that “elderly residents often ... expend a significant portion of their savings in order to purchase care in a continuing care retirement community,” and that there is a need “to protect the rights of the elderly.” (Health & Saf. Code, §§ 1770, subd. (b), 1776.)

The court acknowledged that CCRC residents also have some express statutory protections under state laws regulating CCRCs, but concluded that the lack of any bar on arbitration in that statutory scheme does not preclude protection for residents under landlord-tenant law.  

Moreover, the continuing care contract statutes “shall be liberally construed for the protection of persons attempting to obtain or receiving continuing care.” (Health & Saf. Code, § 1775, subd. (e). To deny residents of a continuing care retirement community the protection given others who contract for lodging would be inconsistent with this express policy. The legislative purposes of both the landlord-tenant laws and the continuing care contract laws are best served by applying the arbitration prohibition to the housing component of continuing care contracts.

The full opinion is currently available on Westlaw at 2020 WL 2831923.  

Is This the Time for Renewed Consideration of "Negotiated Risk Agreements" in Care Settings?

In 2011, Joshua R. Wilkins, then a graduating student at Dickinson Law, won one of the top awards for a student writing competition sponsored by the National Academy of Elder Law Attorneys (NAELA).  Joshua wrote about "Consumer Directed Negotiated Risk Agreements."  His introduction began:  

Negotiated risk in the assisted living context is a largely misunderstood concept. Opponents and proponents of the concept often fail to agree on fundamental concepts underlying negotiated risk. Similarly, states have enacted legislation authorizing or prohibiting what is described as negotiated risk – however those states have defined the concept so differently than other states that it is difficult to understand the concept as a cohesive whole. Negotiated risk can be broadly defined as the shifting of responsibility for certain consequences between the resident and the assisted living facility. Further concepts of definition vary greatly between lawyers and industry actors, and will be discussed later.

As a polestar, the general opinions regarding negotiated risk should be summarized. Opponents of the concept believe that negotiated risk is an illegitimate and unenforceable imposition upon the rights of assisted living residents by facilities attempting to contract away liability for resident injuries.  Proponents color negotiated risk as a method for residents to exercise greater control over their living conditions and tailor the services supplied and guidelines imposed by the resident’s facility.

 

This paper proposes an alternative approach to negotiated risk that incorporates concerns of opponents of negotiated risk, and the selling points of proponents. A consumer directed negotiated risk agreement – one prepared by the resident’s independent attorney, would assist the resident in directing their standard of assisted living, while protecting their interests. A document of this type would require new state legislation authorizing the enforceability of risk shifting, and also delineating the boundaries that such an agreement could be used for. Additional benefits to this type of negotiated risk is that concerns over resident safety and welfare during the admissions process could be addressed without completely overhauling the market-based approach that is a hallmark of assisted living. Also, because residents seeking negotiated risk agreements would have to enlist the aid of an independent attorney, they would be more likely to benefit from advice regarding many other aspects of aging that they may not have otherwise obtained – including Medicaid and estate planning, education about possible exploitation, and review of pertinent resident admissions forms and contracts.

In proposing a consumer-driven approach, Joshua recognized critics' past reasons for opposing "negotiated risk" agreements, including the serious concern that facilities could mandate such "agreement" as an automatic wavier of all appropriate standards for care.  That's not true choice.  Attorney Eric Carlson, long-known for his advocacy for seniors, wrote an early article, Protecting Rights or Waiving Them?  Why 'Negotiated Risk' Should be Removed from Assisted Living Law, Journal of Health Care Law & Policy (2007).   

The specific risk that I'm thinking of these days is the risk that attends continued interaction with family members and friends for residents of assisted living or dementia care facilities.  Coronavirus is just one of the risks that comes about through such interaction, and certainly the emerging details of facilities that fail to adopt or enforce sound infection control measures are, at best, disturbing even without this particular disease.  Further, just because one resident is willing to "accept" risk coming from outside interactions, that doesn't mean the entire resident community would feel the same, and yet their own exposure to the risk increases with every fellow resident's outside contact.  And staff members' safety is also impacted by third-party interactions.  

Perhaps negotiation of the risk agreement provisions regarding community/family interactions should be made viable only where stronger safeguards can be developed against "casual" infection sources.  We have standards for "green" architecture.  Are there similar standards for "clean" architecture in senior living settings (and beyond)?  

AALS Call for Papers/Presenters on Intersectionality, Aging and the Law

The AALS Section on Law and Aging is joining forces with the Sections on Civil Rights, Disability Law, Family and Juvenile Law, Minority Groups. Poverty, Sexual Orientation, Gender-Identity Issues, Trusts & Estates and Women in Legal Education to host a program for the 2021 Annual Meeting, scheduled to take place in San Francisco in January.  The theme for the program is appropriately broad -- "Intersectionality, Aging and the Law."  

I like this definition of "intersectionality": 

The interconnected nature of social categorizations such as race, class, and gender as they apply to a given individual or group, regarded as creating overlapping and interdependent systems of discrimination or disadvantage.  Example:  "Through an awareness of intersectionality, we can better acknowledge and ground the differences among us."

We need great presenters!  

From Naomi Cahn at George Washington Law:

We are interested in participants who will address this subject from numerous perspectives. Potential topics include gray divorce, incarceration, elder abuse (physical or financial), disparities in wealth, health, housing, and planning based on race or gender or gender identity, age and disability discrimination, and other topics.  The conception of the program is broad, and we are exploring publication options.

If you are interested in participating, please send a 400-600 word description of what you'd like to discuss.  Submissions should be sent to Professor Naomi Cahn, [email protected], by June 2, 2020, and the author[s] of the selected paper(s) will be notified by July 1, 2020.  

AALS is planning on hosting the annual meeting from January 5-9 and I personally feel the overall theme for the conference is apt in these fraught times:  The Power of Words

 

Special Needs Trust Failing?

Kiplinger recently ran an article, How a Special Needs Trust for Your Child Can Fall Apart,  which explains

Parents of disabled children must juggle a lot of responsibilities: work, bills and of course caregiving. But one ball they can’t afford to drop is special needs planning. One wrong move in this complicated ballet balancing benefits and services with asset rules could be disastrous. While every family’s situation is unique, the laws regulating special needs trusts are complex and can require some strategizing by families and trust companies — and if necessary, utilization of available government and nonprofit support programs. 

The article reviews the laws, the requirements for a valid third party SNT and highlights one person's experiences, an attorney's advice for the person and advice for parents of children with special needs.

The key takeaway from this story is that it is essential that parents of a disabled child learn about federal, state, local community, charitable and other nonprofit support programs that may help. They must also discuss eligibility rules with relatives who may want to make gifts for the child, leave a share of their estate, include the child in a beneficiary designation for a retirement plan or life insurance or provide other types of in-kind support and maintenance.

Finally, setting up a special needs trust requires planning, legal and financial expertise, and the proper and compassionate administration of a professional trustee.

Brief Report from Pennsylvania's 2019 Elder Law Institute

The Pennsylvania Bar hosted our annual Elder Law Institute in Harrisburg on July 18 and 19.  One of my favorite parts of the conference every year is the opening session, when Marielle Hazen gives a "year in review" on legislative and regulatory changes, and Rob Clofine does the same for case law.  This year, Marielle began with a survey of the audience (250+) and asked attendees about frequency of issues arising in their practices.  She asked about Medicaid, Medicare, estate planning, special needs planning and more. The most hands went up when the question was about guardianships.  That surprised many at first, but then Rob Clofine also pointed out that several of his "top 10 cases" for the year involved disputes arising in the context of guardianships.  As I'm now involved in a very big project about education for guardians in Pennsylvania, the informal survey is another reminder of the growing need for better planning to avoid unnecessary guardianships, as well as the concerns among families that can arise when a guardian must be appointed by a court.  I'll write more about these issues and my project soon.

I wasn't able to stay for the whole conference (I really should own stock in Southwest Airlines!), but I did serve as a moderator for a 90-minute session on Continuing Care Retirement Communities in Pennsylvania.  Our panelists included attorneys Linda Anderson (addressing topics from the perspective of consumers and their family members), Karen Feather, Special Assistant for Licensing in Pennsylvania's Insurance Department, and Kimber Latsha, who has deep experience representing both for-profit and non-profit CCRCs in Pennsylvania.  In addition, in the audience we had Dave Sarcone, Associate Professor of International Business and Management at  Dickinson College, who coauthored an article with me earlier in the year about Ongoing Challenges for Pennsylvania Continuing Care and Life Plan Communities.  The session proved to be, shall we say, vibrant, with lots of interaction between panel members and the audience, and with fairly strong opinions emerging at times. 

Points of strongest interaction included issues surrounding an individual or couple's assets.  CCRCs typically use an underwriting process for both health and financial qualifications for applicants seeking to become new residents.  Applications require disclosure of "assets" -- and the question was whether that meant "all" assets, or only those the individual or couple believe are needed in order to qualify for admission.  One concern is whether an individual is "allowed" to spend "other" assets without seeking permission from  the administrators of the CCRC.  A similar question arose in connection with "refundable" entrance fees.   In states, such as Pennsylvania, without deadlines for refunds, the waiting period can stretch to months or even years.  We learned that the Pennsylvania Department of Insurance has recently revisited that fact, and is issuing new guidelines to providers about reasonable waiting periods.  I can see another article in my future on these topics.  

Will You Outlive Your Retirement Savings?

Kiplinger published a slide show that focuses on reasons why folks may outlive their retirement savings. 15 Reasons You'll Go Broke in Retirement include explanations, some of which are out of an individual's control but most are not. These explanations include: abandoning stocks or investing too heavily into stocks, not saving enough for your anticipated life span, living beyond your means, only having one source of income, not working long enough, getting sick, failing to take state taxes into account, financially supporting the kids, being under-insured, falling victim to  a consumer scam, using retirement savings as collateral and lacking a rainy day fund.

NYT: Making Annuities Easier to Understand

The more I work in the field of elder law, and teach classes, the more I am convinced that enterprises who market to families and seniors fail to realize greater transparency can help their commercial products and enterprises succeed. 

Thus, it is useful to read a New York Times' column on annuities, one that appears to be the first of a series.  The author, Ron Lieber, begins his column on The Simplest Annuity Explainer We Could Write:

Annuities can be complicated. This column will not be.

 

After I wrote two weeks ago about getting tossed out of the office of an annuity salesman, there was a surprising clamor for more information about this room-clearing topic. One group of readers just wanted a basic explainer on how annuities work. For that, read on.

 

Another group of readers worried that those hearing of my experience might assume that all annuities are bad, and that all people who sell them use subterfuge to do so. Neither of those is true: Next week, I’ll introduce you to some reasonable people who are trying to use certain annuities in new and improved ways.

My thanks to Dickinson Law colleague Laurel Terry for the heads up!