NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10657
SPONSOR: Rules (Schimminger) TITLE OF BILL:
An act to amend the public health law, in relation to promoting the
development, expansion and efficient operation of continuing care
retirement communities; and providing for the repeal of certain
provisions upon expiration thereof
PURPOSE OF THE BILL:
Article 46 of the Public Health Law was enacted in 1989 to establish
Continuing Care Retirement Communities (CCRCs) in New York. Later amend-
ments included Article 46A, which established fee-for service (FFS)
CCRCs, and a new Life Care at Home program added in 2015. CCRCs provide
a full range of services including independent housing, assisted living
and nursing home care to residents in a campus setting as their needs
change. Since the early 1990s the number of CCRCs and similar communi-
ties has exploded across the nation, becoming one of the primary means
by which seniors of varying income levels are able to fund and provide
for their ongoing health care, services, and housing needs. However,
since Article 46 was enacted here in New York, only 12 CCRCs have become
operational.
In the over 25 years since its enactment, Article 46 has become outdated
and now represents a major impediment to the development and expansion
of CCRCs in New York. The regulatory framework and policies stemming
from Articles 46 and 46-A create an environment in which it is: (1)
prohibitively expensive and administratively burdensome to consider
starting a new CCRC or expanding a current community; and (2) extremely
difficult for current communities to operate efficiently and make their
services more affordable to residents.
Comprehensive statutory and regulatory reforms are needed in order to
modernize the Article 46 and 46-A provisions and eliminate barriers to
the development, expansion, and efficient operation of CCRCs in New York
while preserving vitally important resident protections.
SUMMARY OF SPECIFIC PROVISIONS:
Sections one and two of the bill amend sections 4601 (CCRC) and 4651
(FFS CCRC) of the Public Health Law to ensure that any references to
"continuing care retirement communities" or fee-for-service continuing
care retirement communities" apply to the term "life plan community", a
more recent name ascribed to CCRCs.
Section three of the bill amends section 4602 of the Public Health Law
to assign an advisory role to the Continuing Care Retirement Community
Council and modify its composition.
Section four of the bill amends section 4603 of the Public Health Law to
delegate the other duties of the CCRC Council to the Commissioner of
Health, including the granting of certificates of authority through an
expedited administrative review process, with final approval for nursing
home beds remaining with the Public Health and Health Planning Council
(PHHPC). It also establishes clear guidelines and timeframes for the
processing of applications and making determinations. In cases when the
State has exceeded established timeframes for review, certain aspects of
applications would be deemed approved.
Sections five and six of the bill amend sections 4604 (CCRC) and 4655
(FFS CCRC) of the Public Health Law to restrict the use of the term
"life plan community" to either a CCRC or a fee-for-service CCRC estab-
lished under Article 46 or Article 46-A, respectively.
Sections seven and eight of the bill conform the adult care facility
(ACF) resident notice requirements in sections 4604 (CCRC) and 4655 (FFS
CCRC) of the Public Health Law to the revised CCRC contract provisions
contained in paragraph 21 of section 4608 and paragraph 17 of section
4659, respectively.
Section nine of the bill amends section 4604 of the Public Health Law to
clarify that the Commissioner of Health is responsible for conducting
reviews of various aspects of an application for a certificate of
authority to operate a CCRC, in concert with the PHHPC (for nursing home
beds); the attorney general (for selected forms of independent living
unit ownership); and any designee(s) of the Commissioner.
Sections ten, eleven and twelve of the bill make conforming amendments
to sections 4604 and 4604-a of the Public Health Law related to the
transfer of CCRC Council authority to the Commissioner of Health.
Sections thirteen and fourteen of the bill amend sections 4605 (CCRC)
and 4656 (FFS CCRC) of the Public Health Law to: (1) authorize CCRCs in
existence prior to January 1, 2016 to provide residential health care
facility (RHCF) services to persons who are not residents of the commu-
nity indefinitely at the percentage deemed permissible by the Commis-
sioner of Health; (2) allow the Commissioner to authorize new CCRCs to
provide RHCF services to persons who are not residents of the community
for a seven-year period, provided, however, that the operator may seek
an extension of this authorization at the end of the seven-year period;
(3) eliminate any restrictions on providing ACF services to persons who
are not residents of the community; and (4) provide that a CCRC serving
an individual receiving ACF services who is not a resident of the commu-
nity will not be subject to any restrictions on providing that individ-
ual with RHCF services as a non-resident of the community.
Sections fifteen and sixteen of the bill make conforming amendments to
sections 4605-a and 4605-b of the Public Health Law related to the
transfer of approval authority for continuing care at home contracts to
the Commissioner of Health.
Sections seventeen and eighteen of the bill make conforming amendments
to sections 4607 (CCRC) and 4658 (FFS CCRC) of the Public Health Law
related to reports that would need to be made to the Commissioner of
Health.
Section nineteen of the bill amends section 4608 of the Public Health
Law to require Medicare supplement coverage to include any coinsurance
amounts due and payable for the 21st day through the 100th day of any
Medicare Part A benefit period for post-hospital skilled nursing facili-
ty care, and makes a conforming amendment.
Section twenty of the bill amends section 4608 of the Public Health Law
to substitute the approval of the Commissioner of Health for the Super-
intendent of Financial Services related to changes in contacts, fees and
charges.
Sections twenty-one and twenty-two of the bill amend sections 4608
(CCRC) and 4659 (FFS CCRC) of the Public Health Law to clarify that a
CCRC contract or a fee-for-service continuing care contract takes
precedence over any conflicting requirements for separate admissions
agreements for levels of care covered in the CCRC including a nursing
home admission agreement, an ACF admission agreement or an assisted
living residency agreement.
Sections twenty-three and twenty-four of the bill amend sections 4609
(CCRC) and 4660 (FFS CCRC) of the Public Health Law to extend the time-
frame for a refund when a formerly occupied unit is vacated but not yet
resold from one year to two years, and to clarify that residents are
permitted to make irrevocable gifts or bequests of entrance fee amounts
otherwise subject to refund. Section twenty-four also clarifies that
resident internal transfers in fee-for-service CCRCs do not trigger
refund requirements.
Sections twenty-five and twenty-six of the bill amend sections 4610
(CCRC) and 4663 (fee-for-service CCRC) of the Public Health Law to allow
up to 85 percent of escrowed entrance fees to be released to the opera-
tor to finance the cost of acquiring, constructing, and equipping the
facility, provided other conditions of these sections have been met.
Section twenty-seven of the bill amends section 4614 of the Public
Health Law to eliminate the responsibility of the Superintendent of
Financial Services to participate in on-site examinations of CCRCs
conducted by the Commissioner of Health at least once every three years.
Sections twenty-eight through thirty-three of the bill amend sections
4615, 4616 and 4617 (CCRC) and sections 4668, 4669 and 4670 (FFS CCRC)
of the Public Health Law to authorize the Commissioner of Health, with
the consent of the PHHPC, to take actions related to revocation, suspen-
sion or annulment of a certificate of authority; appointment of a care-
taker; and/or receivership of a CCRC.
Sections thirty-five through forty-two of the bill make conforming
amendments to sections 4621 and 4623 (CCRC) and sections 4651, 4654,
4655, 4657, 4658 and 4659 (fee-for-service CCRC) of the Public Health
Law to substitute the Commissioner of Health for the CCRC Council
related to promulgation of regulations, approvals of certificates of
authority, and content of various disclosures.
Section forty-three of the bill amends section 4611 of the Public Health
Law to confer authority on the Commissioner of Health to establish
reserve and asset levels for CCRCs.
Section forty-four of the bill adds a new section 4625 to the Public
Health Law to require the Commissioner of Health to convene a workgroup
of CCRC industry experts to investigate and develop recommendations on
creating additional cost-effective options for financing the development
of additional CCRCs and fee-for-service CCRCs. The workgroup would
report its findings to the Commissioner, Legislature and CCRC Council by
January 1, 2018.
JUSTIFICATION:
Articles 46 and 46-A of the Public Health Law, and the regulations and
policies that emanate from these laws, make the establishment and opera-
tion of CCRCs unnecessarily complex and expensive in New York as
compared to other states. Two State agencies (the Department of Health
(DOH) and the Department of Financial Services (DFS)) review applica-
tions for entrance-fee CCRC models, while three State agencies (DOH, DFS
and the Office of the Attorney General) review applications for equity
model CCRCs. The resulting review process is protracted, exceedingly
complex, duplicative and expensive. Ongoing oversight of CCRC community
operations, marketing practices, contracting, fees and investments is
burdensome, time-consuming and adds significantly to the cost of operat-
ing these communities. This, in turn, increases fees to residents.
Those provisions of Article 46 and Article 46-A that mandate multiple
agency involvement should be revised to consolidate oversight in DOH and
make it clear that other agencies are involved in a limited consultative
role. Although this may have been the original intent of the statute,
actual practice has evolved over the years such that there are competing
interests among agencies in terms of authority to regulate CCRCs.
Because they offer multiple levels of care, CCRCs are subjected to
repeat and duplicative State survey inspections. These multiple surveys
are costly to both the State and the community; they are disruptive to
operations and residents; and findings are often contradictory between
survey teams. There is also confusion about the CCRC contract, which
governs all services provided in the community.
CCRCs are also subject to overly proscriptive requirements governing
refunds, accessing funds to finance construction/purchase, and how
reserve funds can be invested. While robust protections are needed to
ensure the financial well-being of the communities and that resident
deposits and fees are secure, the current requirements preclude communi-
ties from covering their cost of capital with earnings from their
investments. As a result, resident fees increase and the model becomes
less affordable to more New Yorkers.
Both nationally and here in New York, CCRCs have proven themselves to be
financially stable and sound investments for residents and surrounding
communities. Contrary to costing the State money, CCRCs are a proven
economic driver for local communities. They are a sound investment that
pays dividends in managing the care and housing needs of seniors;
provide an alternative to estate planning to qualify for Medicaid; and
enable seniors to remain near family members and friends. The CCRC model
is not a new Medicaid program that will cost the State money. Quite the
opposite, seniors who invest in their care and housing needs through a
CCRC do not divest their assets to qualify for Medicaid-funded services.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
Positive to the State. The economic activity, associated with further
CCRC development and operation would be expected to generate additional
tax revenues to the State. Reduced reliance on Medicaid associated with
CCRC residency would save State and federal dollars.
EFFECTIVE DATE:
180 days after enactment, provided that the commissioner may make regu-
lations beforehand that would become effective at the same time as the
law.
