II 

110TH CONGRESS 

2D SESSION S. 3732 

To assist in creating substantive culture change in long-term residential 

care by establishing a small house nursing home loan program to provide 

for the establishment, renovation, and construction of small house nursing homes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 11 (legislative day, DECEMBER 10), 2008 

Mr. CASEY introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To assist in creating substantive culture change in longterm residential care by establishing a small house nursing home loan program to provide for the establishment, 

renovation, and construction of small house nursing 

homes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Promoting Small 

5 House Nursing Homes Act’’. 


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1 SEC. 2. SMALL HOUSE NURSING HOME LOAN PROGRAM. 

2 (a) ESTABLISHMENT.—The Secretary of Health and 

3 Human Services (in this section referred to as the ‘‘Sec4 retary’’) shall establish a small house nursing home loan 

5 program (in this section referred to as the ‘‘program’’) 

6 under which the Secretary makes grants to eligible lenders 

7 in order for such eligible lenders to make direct loans to 

8 eligible borrowers for the establishment, renovation, and 

9 construction of small house nursing homes that meet the 

10 requirements of this section. 

11 (b) ELIGIBILITY.— 

12 (1) PROGRAM GRANT ELIGIBILITY.—To be eligi13 ble to obtain a grant under the program, an eligible 

14 lender shall— 

15 (A) be a nonprofit, non-Federal lender; 

16 (B) have a track record of lending to small 

17 house nursing homes, low income populations, 

18 or nursing homes that serve low income popu19 lations; and 

20 (C) submit to the Secretary an application 

21 in such form as the Secretary may reasonably 

22 require. 

23 (2) SMALL HOUSE ADVISORY PANEL.— 

24 (A) IN GENERAL.—Not later than 90 days 

25 after the date of enactment of this Act, the Sec26 retary shall establish an advisory panel (in this 


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1 section referred to as the ‘‘Small House Advi2 sory Panel’’) to— 

3 (i) evaluate applications for direct 

4 loans under the program in conjunction 

5 with eligible lenders; and 

6 (ii) carry out other responsibilities de7 termined appropriate by the Secretary. 

8 (B) MEMBERSHIP.—The Small House Ad9 visory Panel shall consist of not less than 5 and 

10 not more than 7 individuals who have expertise 

11 in the areas of person-centered long-term care 

12 culture change, long-term care financing, con13 sumers, and direct care workers. 

14 (3) EVALUATION OF ELIGIBLE BORROWER AP15 PLICANTS.— 

16 (A) ESTABLISHMENT OF EVALUATION

17 TOOL AND CRITERIA.— 

18 (i) IN GENERAL.—The Secretary, in 

19 collaboration with the Small House Advi20 sory Panel, shall establish an evaluation 

21 tool and evaluation criteria with which to 

22 prioritize eligible borrowers who submit to 

23 an eligible lender an application for a di24 rect loan under the program. 


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1 (ii) EVALUATION TOOL.—The evalua2 tion tool established under subparagraph 

3 (A) shall be based upon the model guide4 line priorities under subsection (c)(5). 

5 (iii) PRIORITIZATION OF ELIGIBLE

6 BORROWERS.—Eligible borrowers shall be 

7 prioritized under the program in accord8 ance with the extent to which they meet 

9 such model guideline priorities. 

10 (B) EVALUATION OF APPLICATIONS AND

11 RECOMMENDATIONS.— 

12 (i) IN GENERAL.—Applications for a 

13 direct loan under the program shall be 

14 evaluated by the Secretary, in collaboration 

15 with the Small House Advisory Panel. 

16 (ii) RECOMMENDATIONS.—The Sec17 retary shall establish procedural guidelines 

18 under which any recommendations of the 

19 Secretary for making direct loans shall be 

20 provided to eligible lenders. 

21 (4) LOAN ELIGIBILITY.—To be eligible for a di22 rect loan from an eligible lender under the program, 

23 an eligible borrower shall be a private or public non24 profit entity or a for-profit entity that— 


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1 (A) agrees to use the proceeds from such 

2 direct loan to construct or renovate a small 

3 house nursing home that— 

4 (i) is designed to establish substantive 

5 culture change; and 

6 (ii) meets the model small house nurs7 ing home requirements and guidelines 

8 under subsection (c); 

9 (B) submits a detailed plan describing— 

10 (i) the particular model or approach 

11 to person-centered care that the small 

12 house nursing home will implement; and 

13 (ii) how the small house nursing home 

14 will meet such model small house nursing 

15 home requirements and guidelines; 

16 (C) has been approved by a State or local 

17 entity (in accordance with applicable State and 

18 local law) to operate a skilled nursing facility 

19 (as defined in section 1819(a) of the Social Se20 curity Act (42 U.S.C. 1395i–3(a)) or a nursing 

21 facility (as defined in section 1919(a) of such 

22 Act (42 U.S.C. 1396r(a))); 

23 (D) with respect to the facility, ensures 

24 that at least 30 percent of the residents of the 

25 facility are Medicaid-funded individuals under 


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1 title XIX of the Social Security Act (42 U.S.C. 

2 1396 et seq.), as determined in accordance with 

3 guidelines to be issued by the Secretary that 

4 take into consideration the number of days such 

5 residents spend in the facility, and does not dis6 charge residents based on their ability to pay; 

7 (E) complies with lending standards devel8 oped, in consultation with the Secretary, by a 

9 task force of experts in long-term care financ10 ing, affordable housing with services develop11 ment, and nontraditional lending; and 

12 (F) agrees to share financial and operating 

13 data with researchers and Federal agencies des14 ignated by the Secretary. 

15 (5) LOAN DISQUALIFICATION.—In no case may 

16 an entity which has displayed a pattern of failing to 

17 comply with State and Federal quality of care stand18 ards (as determined by the Secretary) or an entity 

19 with a pattern of violating State and Federal labor 

20 laws (as determined by the Secretary) be an eligible 

21 borrower under the program. 

22 (c) MODEL SMALL HOUSE NURSING HOME RE23 QUIREMENTS AND GUIDELINES.— 

24 (1) IN GENERAL.— 


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1 (A) DEVELOPMENT.—Not later than 90 

2 days after the date of enactment of this Act, 

3 the Secretary shall develop model small house 

4 nursing home guidelines that meet the require5 ments of this subsection. 

6 (B) CONSISTENCY WITH REQUIREMENTS

7 APPLICABLE UNDER THE SOCIAL SECURITY

8 ACT.—The guidelines established under sub9 paragraph (A) shall be consistent with, and in 

10 addition to, any requirements applicable to an 

11 eligible borrower under sections 1819 and 1919 

12 of the Social Security Act (42 U.S.C. 1395i–3; 

13 1396r). 

14 (2) PRACTICE RESEARCH AND IMPLEMENTA15 TION.— 

16 (A) IN GENERAL.—Under the guidelines 

17 under paragraph (1), a small house nursing 

18 home that obtains proceeds from a direct loan 

19 made under this section shall be based on meth20 ods and practices that have been tested through 

21 pilot programs and other research carried out 

22 at not less than 1 implementation site in the 

23 United States for at least a 2-year period. 

24 (B) IMPROVEMENTS IN QUALITY OF

25 LIFE.—Pilot programs and research referred to 


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1 in subparagraph (A) shall be designed to estab2 lish a clearly articulated, evidence-based ap3 proach to creating improvements in the quality 

4 of life and care outcomes of residents of small 

5 house nursing homes as well as providing for 

6 improvements in the professional satisfaction 

7 and career development of the staff of small 

8 house nursing homes. 

9 (C) RESEARCH REQUIREMENT.—Research 

10 referred to in subparagraph (A) shall be con11 ducted by a researcher— 

12 (i) who has expertise in long-term 

13 care; and 

14 (ii) who has no financial or profes15 sional interests in the success of the meth16 ods or practices involved. 

17 (3) REQUIREMENTS OF SMALL HOUSE NURSING

18 HOMES.—Under the guidelines developed under 

19 paragraph (1), a small house nursing home that ob20 tains proceeds from a direct loan made under this 

21 section shall— 

22 (A) establish a self-directed model of care 

23 for residents that incorporates collaborative de24 cisionmaking by residents and nursing assist25 ants; 


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1 (B) provide for a universal worker ap2 proach to resident care (including care available 

3 from a nursing assistant, personal care, social4 ization services, meal preparation services, and 

5 laundry housekeeping services) that is orga6 nized to support and empower all staff to re7 spond to the needs and desires of residents; 

8 (C) provide for consistent staff assign9 ments; 

10 (D) consist of a physical environment de11 signed as a home, rather than an institution— 

12 (i) that contains residential style de13 sign elements and materials throughout 

14 the home that are similar to the residential 

15 style design elements and materials in the 

16 immediate surrounding community, includ17 ing residential style design elements in 

18 areas that have mixed-zoning purposes, 

19 and do not use commercial and institu20 tional elements and products (such as a 

21 nurses’ station, medication carts, hospital 

22 or office type florescent lighting, acoustical 

23 tile ceilings, institutional style railings and 

24 corner guards, and room numbering and 

25 labeling) unless mandated by authorities 


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1 with appropriate jurisdiction over the small 

2 house nursing home; 

3 (ii) which is designed to be a fully 

4 independent and disabled accessible house, 

5 apartment, or independent wing of an ex6 isting structure with not more than 25 

7 residents in the house, apartment, or inde8 pendent wing; 

9 (iii) that contains a full private bath10 room for each bedroom that, at a min11 imum, provides a toilet, sink, and acces12 sible shower; 

13 (iv) which has a life-safety rating that 

14 is sufficient to appropriately accommodate 

15 individuals who cannot self-evacuate; and 

16 (v) in which the percentage of resi17 dents of the small house nursing home who 

18 are short stay rehabilitation residents does 

19 not exceed 20 percent at any time unless 

20 the small house nursing home is entirely 

21 devoted to providing rehabilitation services, 

22 except that a long-term resident returning 

23 to a small house nursing home after an 

24 acute episode and who is receiving rehabili25 tation services for which payment is made 


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1 under the Medicare program under title 

2 XVIII of the Social Security Act shall not 

3 be counted toward such 20 percent limita4 tion; 

5 (E) provide for meals cooked in the small 

6 house nursing home and not prepared in a cen7 tral kitchen and transported to the small house 

8 nursing home; and 

9 (F) provide for the training of staff in ac10 cordance with paragraph (4). 

11 (4) TRAINING OF STAFF.— 

12 (A) IN GENERAL.—Under the guidelines 

13 under paragraph (1), a small house nursing 

14 home that obtains proceeds from a direct loan 

15 made under this section shall provide training 

16 for all staff involved in the operations of the 

17 small house nursing home concerning the phi18 losophy, operations, and skills required to im19 plement and maintain self-directed care, self20 managed work teams, a noninstitutional ap21 proach to life and care in long-term care, ap22 propriate safety and emergency skills, and other 

23 elements required for the successful operation 

24 of and outcomes in the small house nursing 

25 home. 


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1 (B) COLLABORATION.— 

2 (i) IN GENERAL.—Training under 

3 subparagraph (A) shall be interdisciplinary 

4 and collaborative. 

5 (ii) COLLECTIVE BARGAINING.— 

6 (I) IN GENERAL.—In the case 

7 where staff involved in the operations 

8 of the small house nursing home are 

9 represented by a collective bargaining 

10 organization, the organization shall be 

11 provided an opportunity to fully par12 ticipate in the development of a pro13 gram for providing such training. 

14 (II) PRIORITIZATION.—In the 

15 case where there is an existing jointly 

16 funded employer-labor training part17 nership, or where a training program 

18 is funded through collective bar19 gaining, the small house nursing home 

20 shall prioritize the utilization of or 

21 collaboration with those existing train22 ing programs in meeting the require23 ments of this paragraph. 

24 (C) AMOUNT.—Training under subpara25 graph (A) shall be not less than 120 hours for 


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1 each universal worker employed by the small 

2 house nursing home and not less than 60 hours 

3 for each leadership and clinical team member 

4 employed by such small house nursing home. 

5 Such training shall be in addition to any other 

6 State training requirements and shall be com7 pleted for the majority of the staff prior to the 

8 initial start-up of the small house nursing 

9 home. 

10 (5) MODEL GUIDELINE PRIORITIES FOR LOAN

11 APPLICANTS.—An eligible borrower applying for a 

12 direct loan under this section shall be given priority 

13 in evaluation of loan applications in proportion to 

14 their compliance with 1 or more of the following 

15 model guidelines: 

16 (A) RESIDENTIAL MODEL PRIORITIES.— 

17 Priority in evaluation for loan eligibility shall be 

18 given to small house nursing home models 

19 that— 

20 (i) have private, single occupancy bed21 rooms that are shared only at the request 

22 of a resident to accommodate a spouse, 

23 partner, family member, or friend; 

24 (ii) contain a living area where resi25 dents and staff may socialize, dine, and 


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1 prepare food together that, at a minimum, 

2 provides a living room seating area, a din3 ing area large enough for a single table 

4 serving all residents and not less than 2 

5 staff members, and an open full kitchen; 

6 (iii) contain ample natural light in 

7 each habitable space that is provided 

8 through exterior windows and other means, 

9 with window areas, exclusive of skylights 

10 and clearstories, being a minimum of 10 

11 percent of the area of the room; and 

12 (iv) have built-in safety features to 

13 allow all areas of the house to be accessible 

14 to the residents during the majority of the 

15 day and night. 

16 (B) DIRECT CARE WORKER MODEL PRIOR17 ITIES.—Priority in evaluation for loan eligibility 

18 shall be given to small house nursing home 

19 model operators that have a legally binding col20 lective bargaining agreement and a signed 

21 labor-management partnership agreement cov22 ering the planning and implementation of small 

23 house nursing homes. Where employees are rep24 resented by a labor organization, a signed labor 


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1 management implementation agreement will be 

2 required. 

3 (d) LOAN PROVISIONS.— 

4 (1) IN GENERAL.—Except as otherwise pro5 vided in this subsection, each direct loan made under 

6 this section shall be subject to such terms, condi7 tions, and covenants relating to repayment of prin8 cipal, payment of interest, and other matters as may 

9 be established by the eligible lender. 

10 (2) MAXIMUM LOAN AMOUNT.—The Secretary, 

11 in consultation with the Small House Advisory 

12 Panel, shall determine the maximum amount of any 

13 direct loan made under this section. 

14 (3) RATE OF INTEREST.—A direct loan made 

15 under this section shall bear interest at an annual 

16 rate of not more than 3 percent, or as determined 

17 by the Secretary. 

18 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated to carry out this section, 

20 $50,000,000 for each of fiscal years 2009 through 2013. 

21 Amounts appropriated under this subsection shall be avail22 able until expended. 

23 (f) TERMINATION.—The program shall terminate, 

24 and no loan may be made under this section, on or after 


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1 the date that is 25 years after the date on which amounts 

2 are initially appropriated under subsection (e). 

3 SEC. 3. REPORT. 

4 Not later than 5 years after the date of enactment 

5 of this Act, the Secretary of Health and Human Services 

6 shall submit to the appropriate committees of Congress 

7 a report on the small house nursing home loan program 

8 established under section 2(a). Such report shall include 

9 information on— 

10 (1) the use of direct loans made under the pro11 gram to establish, renovate, and construct small 

12 house nursing homes that meet the requirements of 

13 section 2; 

14 (2) the quality of health care, quality of life, 

15 emotional well-being, ability to perform functions of 

16 daily living, and other outcomes found for residents 

17 of small house nursing homes, as compared to such 

18 outcomes found for residents of traditional nursing 

19 homes; and 

20 (3) staff wages, retention, and absenteeism 

21 rates, measures of staff satisfaction, and workload 

22 and staffing levels for small house nursing homes, as 

23 compared to traditional nursing homes. 

Æ 


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