Source: https://development.code.dccouncil.us/dc/council/code/titles/44/chapters/1A/
Timestamp: 2019-04-21 18:30:14+00:00

Document:
D.C. Law Library - Chapter 1A. Continuing Care Retirement Communities.
↪ Chapter 1A. Continuing Care Retirement Communities.
Chapter 1. Assisted Living Residence Regulation.
Chapter 1A. Continuing Care Retirement Communities.
§ 44–151.03. Revocation of license.
§ 44–151.04. Sale or transfer of ownership.
§ 44–151.06. Contract for continuing care; specifications.
§ 44–151.07. Annual disclosure statement revision.
§ 44–151.09. Escrow, collection of deposits.
§ 44–151.10. Right to organization.
§ 44–151.11. Rehabilitation or liquidation.
§ 44–151.12. Investigations and subpoenas.
§ 44–151.13. Examinations; financial statements.
§ 44–151.16. Other licensing or regulation.
§ 44–151.17. Rulemaking authority; reasonable time to comply with rules.
§ 44–151.18. Continuing Care Retirement Community Regulatory and Supervision Trust Account.
(1) “Assisted living” means an assisted living residence as defined in § 44-102.01(4).
(3) “Continuing care facility” means a building, or complex of buildings under one management at one or more sites, if continuing care services are provided.
(4) “Continuing care services” means the continuum of care, ranging from independent living to assisted living to nursing home care, provided pursuant to a contract for the life of the individual purchasing the services or for a period of not less than one year.
(5) “Entrance fee” means a payment that assures a resident a place in a facility for a term of at least a year or for life.
(6) “Hazardous financial condition” means a provider is insolvent or in imminent danger of becoming insolvent.
(7) “Independent living” means an individual residing in a continuing care facility’s living unit with no need for specialized health care services beyond general preventative health care.
(8) “Living unit” means a room, apartment, cottage, or other area within a continuing care facility set aside for the exclusive use or control of one or more identified residents.
(9) “Nursing home” means a nursing home as defined in § 44-501(3).
(10) “Provider” means the promoter, developer, or owner, whether a natural person, partnership, or other unincorporated association, however organized, trust, or corporation, whether operated for profit or not, or any other person, that solicits or undertakes to provide continuing care services.
(11) “Resident” means a purchaser of, a nominee of, or a subscriber to, a continuing care contract.
This section is referenced in § 31-1201.
(a) No provider shall engage in the business of offering or providing continuing care in the District without a license from the Department of Insurance, Securities, and Banking indicating that the provider meets the financial requirements under this chapter for engaging in the business of providing continuing care services.
(3) Experienced managers and qualified financial experts associated with the organization who are capable of ensuring the proper operation of the facility.
(c) Each provider shall file with the Commissioner an application for a license on forms prescribed by rule and within a period of time prescribed by rule. The application shall include the disclosure statement meeting the requirements of this chapter and other financial and facility development information required by the rule. The application for a license shall be accompanied by an application fee established by rule.
(d) Upon receipt of the complete application for a license in proper form, the Commissioner shall, within 10 business days, issue a notice of filing to the applicant. Within 90 days of the notice of filing, the Commissioner shall enter an order issuing the license or rejecting the application. If the Commissioner fails to act within 90 days of the notice of filing, the application shall be deemed denied.
(e) If the Commissioner determines that any of the requirements of this chapter have not been met, the Commissioner shall notify the applicant of any defects in the application and the applicant shall have 30 days in which to correct the application. If the requirements are not met within the time allowed, the Commissioner may enter an order rejecting the application, which order shall include the findings of fact upon which the order is based and which shall not become effective until 20 days after the end of the 30-day period. During the 20-day period, the applicant may petition for reconsideration of the application and shall be entitled to a hearing.
(2) Gives consideration to expected rates of mortality and morbidity, expected refunds, and expected capital expenditures in accordance with standards promulgated by the American Academy of Actuaries, within a 5-year forecast period.
(g) Any license issued pursuant to this section for a provider of continuing care services shall be issued as a Financial Services endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47.
(h) Nothing in this chapter shall require the Commissioner to review the disclosure statement and the issuance of a license under this chapter shall not constitute an approval of the disclosure statement or of any of the statements therein.
This section is referenced in § 44-151.15.
D.C. Law 16-191, in subsec. (g), validated a previously made technical correction.
(6) Been or is in imminent danger of being determined to be in a hazardous financial condition.
(b) The Commissioner may suspend the license of a provider, after notice and hearing, for any of the violations in subsection (a) of this section and set forth the conditions necessary to correct the violations, including whether a provider can enter into new continuing care service contracts while suspended.
(c) The Commissioner may, in lieu of suspension or revocation of the license of a provider issued pursuant to this chapter, after notice and hearing, order a provider to take corrective action or levy an administrative penalty in an amount not more than $50,000 per violation.
(d) Upon review of an order of the Commissioner revoking a license, a court may determine whether a factual finding by the Commissioner is clearly erroneous.
(e) If there is good cause to believe that the provider is guilty of a violation for which revocation could be ordered, the Commissioner may first issue a cease and desist order. The cease and desist order shall be subject to notice and hearing within 10 days of the order. If the cease and desist order is not or cannot be effective in remedying the violation, the Commissioner may, after notice and hearing, issue an order that the license be revoked and surrendered. The provider may accept new applicant funds while the revocation order is under appeal provided the funds are escrowed pending results of the appeal.
(a) No provider or other owning entity shall sell or transfer ownership of the facility, or enter into a contract with a third-party provider for management of the facility, unless the transfer or contract has been approved by the Commissioner. The Commissioner shall have 90 days from receipt of the transfer documents or contract in which to review and to approve or disapprove the transfer or contract. If the transfer or sales contract or third-party management contract is approved, the new provider or third-party manager shall have 90 days in which to meet the licensing requirements and to obtain a license to operate the facility in their own name. The Commissioner, with the consent of the applicant, may extend this 90-day period for up to an additional 60 days.
(b) Upon receipt of an application for the sale or transfer of ownership of the facility or for execution of a contract with a third-party provider for management of the facility, the Commissioner shall, within 10 business days, issue a notice of filing to the applicant. Within 90 days of the notice of filing, the Commissioner shall enter an order issuing the license or rejecting the application. If the Commissioner fails to act within 90 days of the notice of filing, the application shall be deemed denied.
(F) An explanation of the assisted living program’s and the nursing home component’s complaint or grievance procedure.
(b) The cover page of the disclosure statement shall state, in a prominent location and in boldface type, the date of the disclosure statement, the last date through which that disclosure statement may be delivered if not earlier revised, and that the delivery of the disclosure statement to a contracting party before the execution of a contract for the provision of continuing care is required by this chapter but that the disclosure statement has not been reviewed or approved by any government agency or representative to ensure accuracy or completeness of the information set forth.
(c) A copy of the standard form of contract for continuing care used by the provider shall be attached to each disclosure statement.
(d) Rules adopted under this chapter may prescribe a standardized format for the required disclosure statement. The Mayor shall, when promulgating rules for standardized forms under this chapter, attempt to seek clarity and require that disclosure statements be written in language reasonably designed to be understandable to potential residents.
(4) A provider shall not deduct from a refund due for a rescinded or canceled contract non-refundable fees set forth in the rescinded or canceled contract or any service charge if the contract performance by the resident becomes impossible due to death or morbidity, and the resident did not occupy a living unit in the facility.
(15) The right of residents to bring a civil action to recover for injury resulting from violations of this chapter and its regulations.
(B) In a nearby licensed assisted living facility.
(B) In a nearby licensed comprehensive care facility.
(e) A provider shall pay any contractual entrance fee refund due under a continuing care agreement to which it is a party within 60 days of the agreement being terminated by a resident’s election or death if, on the termination date, the unit has been occupied by or reserved for another resident who has paid an entrance fee.
(f) The resident’s continuing care contract shall permit the resident to identify the resident’s estate or the person or persons to whom payment shall be made if a refund is due by reason of the resident’s death.
(2) The revised forecast statements of revenues and expenses and cash flows or other forecast financial data being filed as a part of the revised disclosure statement filed at any other time if, in the opinion of the provider, revision is necessary to prevent an otherwise current disclosure statement from containing a material misstatement of fact or omitting a material fact required to be stated therein.
(b) Only the most recently recorded disclosure statement, with respect to a facility, and in any event, only a disclosure statement dated within one year plus 150 days prior to the date of delivery, shall be considered current for purposes of the law or delivered pursuant to this chapter.
(a) All continuing care facilities shall maintain, after opening, operating reserves equal to 20% of the total operating costs projected for the 12-month period following the period covered by the most recent annual disclosure statement filed. The forecast statements as required shall serve as the basis for computing the operating reserve. In addition to total operating expenses, total operating costs shall include debt service, consisting of principal and interest payments and taxes and insurance on any mortgage loan or other long-term financing, but shall exclude depreciation, amortized expenses, and extraordinary items as may be approved by regulation. If the debt service portion is accounted for by way of another reserve account, the debt service portion may be excluded. The operating reserves may be funded by cash, invested cash, commercial paper, or by investment grade securities, including bonds, stocks, United States Treasury obligations, or obligations of United States government agencies.
(b) A provider that has begun construction, has permanent financing in place, or is in operation on April 5, 2005, has up to 5 years to meet the operating reserve requirements.
(c) The Commissioner may require a provider not meeting its reserve requirements established by subsection (a) of this section to place the reserves in an escrow account with a bank, trust company, or other escrow agent approved by the Commissioner.
(d) The notes to the provider’s annual audited financial statements shall state whether or not the reserve requirements have been met.
(e) The Commissioner may allow withdrawal or borrowing from the reserves in an amount not greater than 20% of the provider’s total reserves. The withdrawal or borrowing may be approved by the Commissioner only if required for making an emergency repair or replacement of equipment, to cover catastrophic loss that is not able to be covered by insurance, or for debt service in a potential default situation. No withdrawal or borrowing may be made from a reserve without the approval of the Commissioner pursuant to subsection (f) of this section. All funds borrowed shall be repaid to the reserve within 18 months in accordance with a payment plan approved by the Commissioner.
(f) Operating reserves shall only be released upon the submission of a detailed request from the provider or facility and shall be approved by the Commissioner. The request shall be submitted in writing for review by the Commissioner at least 10 business days prior to the date of withdrawal.
(3) If a revocation order for the provider’s license as a continuing care facility is under appeal.
(C) Another independent person or entity agreed upon by the provider and the resident, unless such account arrangement is prohibited by law.
(2) The continuing care services contract shall provide that the total amount of any entrance fee, or any other fee or deposit that may be applied toward the entrance fee, received by the provider be placed in the escrow account. A facility may place a letter of credit, negotiable securities, or a security bond equal to the total amount of any entrance fee or any other fee or deposit in escrow in lieu of any other requirement of this section.
(II) Not less than 90% of the funds estimated in the statement of cash flows submitted by the provider as that part of the disclosure statement required by this chapter to be necessary to fund start-up losses and assure full performance of the obligations of the provider pursuant to continuing care contracts.
(ii) The provider submits a plan of reorganization that is accepted and approved.
(c) If funds are escrowed under subsection (a)(1) or (3) of this section, upon receipt by the escrow agent of a request by the provider for the release of the funds, the escrow agent shall approve release of the funds within 5 working days unless the escrow agent finds that the requirements of subsection (b) of this section have not been met and notifies the provider of the basis for this finding. The request for release of the escrow funds shall be accompanied by any documentation the fiduciary requires.
(d) Release of any escrowed funds that may be due to the subscriber or resident shall occur upon 5 working days’ notice of death, nonacceptance by the facility, or voluntary cancellation. If voluntary cancellation occurs after construction has begun, the refund may be delayed until a new subscriber is obtained for that specific unit; provided, that the period for refund shall not exceed 2 years.
(e) If the provider fails to meet the requirements for release of funds held in the escrow account within a time period the escrow agent considers reasonable, the funds shall be returned by the escrow agent to the persons who have made payment to the provider. The escrow agent shall notify the provider of the length of this time period when the provider requests release of the funds.
(f) Facilities that currently meet the 75% pre-sales or the 75% occupancy requirements, as set forth in subsection (b)(3)(B) of this section, shall not be required to escrow entrance fees, unless otherwise required by the Commissioner.
(3) Deposit in the escrow account an amount of cash equal to all entrance fees or any other fees or deposits that may be applied toward the entrance fee received by the provider.
(a) A resident living in a facility registered under this chapter has the right of self-organization, the right to be represented by an individual of the resident’s own choosing, and the right to engage in concerted activities to keep informed on the operation of the facility in which he or she is a resident or for other mutual aid or protection. Responsible family members and legal guardians of residents in the assisted living and nursing components have the same rights of organization.
(b) The facility shall provide space and other appropriate accommodations, including heat, light, and furnishings, for residents’ organizations.
(c) The board of directors or other governing body of a continuing care facility or its designated representative shall hold annual meetings with the residents of the continuing care facility for free discussions of subjects including income, expenditures, and financial trends and problems as they apply to the facility and discussions of proposed changes in policies, programs, and services. Residents and guardians, legal representatives, or designees of residents shall be entitled to at least 7 days advance notice of each meeting. Residents in the assisted living and nursing components shall receive these notices, which also shall be sent to the legal guardians or responsible family members. An agenda and any materials that shall be distributed by the governing body at the meetings shall remain available upon request to residents and to guardians, legal representatives, or designees of residents.
(d) A provider that has a governing body shall include at least one resident as a full and regular member of the governing body who shall be selected by vote of the residents of the facility.
(4) A facility is bankrupt or insolvent, or in imminent danger of becoming bankrupt or insolvent.
(b) An order to rehabilitate a facility shall direct a trustee to take possession of the property of the provider and to conduct the business thereof, including the employment of such managers or agents as may be considered necessary and to take such steps as the court may direct toward removal of the causes and conditions which have made rehabilitation necessary.
(c) If, at any time, the court finds, upon petition of the trustee or provider, or on its own motion, that the objectives of an order to rehabilitate a facility have been accomplished and that the facility can be returned to the provider’s management without further jeopardy to the residents of the facility, the court may, upon a full report and accounting of the conduct of the facility’s affairs during the rehabilitation and of the facility’s current financial condition, terminate the rehabilitation and, by order, return the facility and its assets and affairs to the provider’s management.
(d) If, at any time, it is determined that further efforts to rehabilitate the provider would be useless, application may be made to the court for an order of liquidation.
(3) Shall include an order directing a trustee to marshal and liquidate all of the provider’s assets located within the District.
(f) Unless preempted by federal law, the first $500 of compensation or wages owed to an officer or employee of a continuing care provider for services rendered within 3 months before the commencement of a delinquency proceeding against the continuing care provider shall be paid before payment of any other debt or claim.
(g) Effective at the time a facility is first occupied by any resident, there shall exist a lien on the real and personal property of the provider or facility to secure the obligations of the provider pursuant to existing and future contracts for continuing care. A lien under this section shall be effective for a period of 10 years. The lien may be foreclosed upon the liquidation of the facility or the insolvency or bankruptcy of the provider and in that event the proceeds shall be used in full or partial satisfaction of obligations of the provider.
(h) If a provider is bankrupt or insolvent or has filed for protection from creditors under any federal bankruptcy or insolvency law, any resident or association of residents, or the legal representative of a resident or association of residents, may apply to the federal bankruptcy court for an order directing the appointment of a trustee to rehabilitate or liquidate a facility.
(i) In applying for an order to rehabilitate or liquidate a facility, in addition to the provisions of subsection (h) of this section, due consideration shall be given in the application to the manner in which the welfare of persons who have previously contracted with the provider for continuing care may be best served.
(j) An order for rehabilitation under this section shall be refused or vacated if the provider posts a bond, by recognized surety authorized to do business in the District and executed on behalf of persons who may be found to be entitled to a refund of entrance fees from the provider or other damages if the provider is unable to fulfill its contracts to provide continuing care at the facility, in an amount determined by the Court to be equal to the reserve funding that would otherwise need to be available to fulfill such obligations.
For the purposes of any investigation or proceeding under this chapter, any person may be required or permitted by the Commissioner to file a statement in writing, under oath or otherwise, as to any of the facts and circumstances concerning the matter to be investigated.
(a) Each provider shall keep and make available to the Commissioner at the provider’s place of business any books and records that the Commissioner, by rule or regulation, requires to enable the Commissioner to enforce this chapter and any rule or regulation adopted under this chapter.
(b) Each provider shall retain for at least 3 years after final payment is made by a resident copies of any contract or agreement, records of payments received by the provider from a resident or a person on behalf of a resident, and such other papers or records relating to the loan as may be required by rule or regulation.
(2) Retains the records for at least 60 months in a storage facility disclosed to the Commissioner.
(d) The Commissioner or his designee may, in the Commissioner’s discretion, visit a provider or continuing care facility offering continuing care in the District to examine its books and records. The provider examined shall pay expenses incurred in conducting examinations under this section. These expenses may include the salary of the government employee based on the time spent conducting or supervising the examination, the fees of a third-party auditor, and reasonable and necessary out-of-pocket expenses incurred by the Department or third-party auditor.
(a) Any provider, facility, or person who enters into a contract for continuing care at a facility without having first delivered a disclosure statement meeting the requirements of this chapter to the person contracting for continuing care, or enters into a contract for continuing care at a facility with a person who has relied on a disclosure statement that omits to state, or misstates, a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading, shall be liable to the person contracting for continuing care for actual damages and repayment of all fees paid to the provider, facility, or person violating this chapter, less the reasonable value of care and lodging provided to the resident by or on whose behalf the contract for continuing care was entered into prior to discovery of the violation, misstatement, or omission or the time the violation, misstatement, or omission should reasonably have been discovered, together with interest thereon at the legal rate for judgments, court costs, and reasonable attorneys’ fees. The interest shall accrue on the date of entering into a contract or when the resident or their representative knew or should have known of the violation, omission, or misstatement, whichever is later.
(b) Liability under this section shall exist regardless of whether the provider or person liable had actual knowledge of the misstatement or omission.
(c) A person shall not file or maintain an action under this section if the person, before filing the action, received a written offer of a refund of all amounts paid the provider, facility, or person violating this chapter, together with interest at the legal rate for judgments, less the current contractual value of care and lodging provided prior to receipt of the offer, and if the offer recited the provisions of this section and the recipient of the offer failed to accept it within 30 days of actual receipt. The interest shall begin to accrue on the date of entering into a contract or when the resident or their representative knew or should have known of the violation, omission, or misstatement, whichever is later. Nothing in this subsection shall prohibit the Mayor from bringing an action for a violation of this chapter.
(d) An action shall not be maintained to enforce a liability created under this chapter unless brought before the expiration of 3 years after the execution of the contract for continuing care that gave rise to the violation or the date when the resident or his or her representative knew or should have known of the violation, omission, or misstatement, whichever is earlier.
(e) The Mayor may impose civil penalties or take other action appropriate to correct violations of this chapter. The Mayor may bring an action to enforce this chapter.
(a) Any person who violates § 44-151.02(a), or makes, or causes to be made, in a document filed with the Commissioner or in any proceeding under this chapter, a statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect, shall be guilty of a misdemeanor and, upon conviction thereof, shall pay a fine of not more than $1,000, be imprisoned for not more than one year, or both. All prosecutions under this subsection shall be upon information filed in the Superior Court of the District of Columbia in the name of the District by the Attorney General for the District of Columbia or any of his or her assistants.
(4) In a matter within the jurisdiction of the Commissioner, falsifies, conceals, or covers up, by a trick, scheme, or device, a material fact, makes any false, fictitious, or fraudulent statement or representation, or makes or use any false writing or document, knowing the same to contain a false, fictitious, or fraudulent statement or entry.
(d) The evidence which is available concerning violation of this chapter or of any rule or order under this chapter may be referred to the Attorney General for the District of Columbia who may, with or without such reference, institute the appropriate criminal proceedings under this chapter.
(e) Nothing in this chapter shall limit the power of the District to punish a person for conduct constituting a crime under other law.
Nothing in this chapter affects the authority of any agency otherwise provided by law to license or regulate any health service facility, domiciliary service facility, or food service.
(a) The Mayor may promulgate rules to carry out and enforce the provisions of this chapter.
(b) Any provider who is offering continuing care shall be given a reasonable time, not to exceed one year from the date of publication of any applicable rules promulgated pursuant to this chapter, within which to comply with the rules and to obtain a license.
All fees, fines, penalties, and assessments received by the Commissioner under this chapter shall be deposited in, and credited to, the Continuing Care Retirement Community Regulatory and Supervision Trust Account established by § 31-1202(b-2) and expended in accordance with § 31-1202(b-2).

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