Rep. Kathleen Willis

Filed: 4/24/2018





10000HB4664ham001LRB100 20398 MJP 39195 a


2    AMENDMENT NO. ______. Amend House Bill 4664 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Short title. This Act may be cited as the
5Continuing Care Retirement Community Transparency Act.
6    Section 5. Purpose. This Act is intended to establish new
7and strengthen existing rights for Illinois seniors residing in
8continuing care retirement communities. Given that the
9Department on Aging estimates a 57% increase in State residents
10ages 60 and over from the years 2000 to 2030, the General
11Assembly recognizes the need to proactively pass this Act to
12ensure adequate protections for Illinois seniors. The General
13Assembly finds the adoption of this Act necessary to increase
14standards to safeguard seniors from potentially harmful,
15ambiguous, or unfair agreements associated with independent
16living and continuing care retirement communities. The



10000HB4664ham001- 2 -LRB100 20398 MJP 39195 a

1proposed reforms will further demonstrate the State of
2Illinois' commitment to protecting seniors in their homes,
3communities, and applicable long-term care establishments and
5    Section 10. Definitions. As used in this Act:
6    "Continuing care contract" means a contract to provide to a
7person for the duration of the person's life or for a term in
8excess of 11 months services that may include nursing services,
9medical services, personal care services, or any combination of
10these services, in addition to maintenance services for the
11person in a facility, conditioned upon the transfer of an
12entrance fee to the provider of the services in addition to or
13in lieu of the payment of regular periodic charges for the care
14and services involved.
15    "Department" means the Department of Public Health.
16    "Director" means the Director of Public Health.
17    "Entrance fee" means an initial or deferred transfer to a
18provider of a sum of money or property that is made or promised
19to be made by a person entering into a continuing care contract
20and assures a resident of services under the terms of a
21continuing care contract.
22    "Facility" means a place or places in which a provider
23undertakes to provide: (1) a resident with nursing services,
24medical services, or personal care services, in addition to
25maintenance services for the person's life or a term in excess



10000HB4664ham001- 3 -LRB100 20398 MJP 39195 a

1of 11 months in accordance with a continuing care contract; and
2(2) a non-resident with nursing services, medical services, or
3personal care services, in addition to maintenance services for
4the person's life or a term in excess of 11 months.
5    "Living unit" means an apartment, room, or other area
6within a facility set aside for the exclusive use of one or
7more identified residents.
8    "Maintenance services" means food, shelter, and laundry
10    "Medical services" means those services pertaining to
11medical or dental care that are performed in behalf of a
12patient at the direction of a physician licensed under the
13Medical Practice Act of 1987 or a dentist licensed under the
14Illinois Dental Practice Act by the physician or dentist, by a
15registered nurse licensed under the Nurse Practice Act, by a
16licensed practical nurse licensed under the Nurse Practice Act,
17or by other professional and technical personnel.
18    "Non-resident" means a person admitted to a facility who
19has not entered into a continuing care contract.
20    "Nursing services" means those services pertaining to the
21curative, restorative, and preventive aspects of nursing care
22that are performed at the direction of a physician licensed
23under the Medical Practice Act of 1987 by or under the
24supervision of a registered nurse licensed under the Nurse
25Practice Act or a licensed practical nurse licensed under the
26Nurse Practice Act.



10000HB4664ham001- 4 -LRB100 20398 MJP 39195 a

1    "Personal care services" means assistance with meals,
2dressing, movement, bathing, or other personal needs or
3maintenance, or general supervision and oversight of the
4physical and mental well-being of an individual, who may be
5incapable of managing his or her person whether or not a
6guardian has been appointed for the individual.
7    "Provider" means a person who provides services in
8accordance with a continuing care contract.
9    "Resident" means a person who enters into a continuing care
10contract with a provider or who is designated in a continuing
11care contract to be a person provided with maintenance
12services, nursing services, medical services, personal care
13services, or any combination of these services.
14    Section 15. Required disclosures; continuing care contract
16    (a) At the time of or before the execution of a continuing
17care contract or at the time of or before the transfer of any
18money or other property to a provider by or on behalf of a
19prospective resident, whichever shall first occur, the
20provider shall deliver a disclosure statement to the person
21with whom the continuing care contract is to be entered into,
22the text of which shall contain, to the extent not clearly and
23completely set forth in the continuing care contract attached
24as an exhibit to the continuing care contract, at least the
25following information:



10000HB4664ham001- 5 -LRB100 20398 MJP 39195 a

1        (1) The name and business address of the provider and a
2    statement of whether the provider is a partnership,
3    corporation, or other type of legal entity.
4        (2) A description of the business experience of the
5    provider in the operation or management of similar
6    facilities and of the manager of the facility, if the
7    facility will be managed on a day-to-day basis by an
8    organization other than the provider. The description
9    shall include information on any matter in which the
10    manager or provider: (i) has been convicted of a felony or
11    pleaded nolo contendere to a felony charge or been held
12    liable or enjoined in a civil action by final judgment, if
13    the felony or civil action involved fraud, embezzlement,
14    fraudulent conversion, or misappropriation of property; or
15    (ii) is subject to a currently effective injunctive or
16    restrictive court order or, within the last 5 years, had
17    any State or federal license or permit suspended or revoked
18    as a result of an action brought by a governmental agency
19    or department, if the order or action arose out of or
20    related to business activity of health care, including
21    actions affecting a license to operate a long-term care
22    facility, retirement home, home for the aged, or assisted
23    living establishment subject to this Act or a similar law
24    in Illinois or another state.
25        (3) A statement as to whether the provider is, or is
26    affiliated with, a religious, charitable, or other



10000HB4664ham001- 6 -LRB100 20398 MJP 39195 a

1    nonprofit organization; the extent of the affiliation, if
2    any; the extent to which the affiliate organization will be
3    responsible for the financial and contract obligations of
4    the provider; and the provision of the federal Internal
5    Revenue Code, if any, under which the provider or affiliate
6    is exempt from the payment of income tax.
7        (4) The location and description of the physical
8    property or properties of the facility, existing or
9    proposed, and, to the extent proposed, the estimated
10    completion date or dates, whether construction has begun,
11    and the contingencies subject to which construction may be
12    deferred.
13        (5) Certified financial statements of the provider,
14    including a balance sheet as of the end of the most recent
15    fiscal year and income statements for the 3 most recent
16    fiscal years of the provider or such shorter period of time
17    as the provider shall have been in existence. If the
18    provider's fiscal year ended more than 90 days prior to the
19    date the application is filed, interim financial
20    statements as of a date not more than 90 days before the
21    filing shall be included, but need not be certified.
22        (6) If the operation of the facility has not yet
23    commenced, a statement of the anticipated source and
24    application of the funds used or to be used in the purchase
25    or construction of the facility, including: (i) an estimate
26    of the cost of purchasing or constructing and equipping the



10000HB4664ham001- 7 -LRB100 20398 MJP 39195 a

1    facility, including related costs such as financing
2    expense, legal expense, land costs, occupancy development
3    costs, and all other similar costs that the provider
4    expects to incur or become obligated for before the
5    commencement of operations; (ii) a description of any
6    mortgage loan or other long-term financing intended to be
7    used for the financing of the facility, including the
8    anticipated terms and costs of the financing; (iii) an
9    estimate of the total entrance fees to be received from
10    residents at or before commencement of operation of the
11    facility; (iv) an estimate of the funds, if any, that are
12    anticipated to be necessary to fund start-up losses and
13    provide reserve funds to ensure full performance of the
14    obligations of the provider under a continuing care
15    contract; (v) a projection of estimated income from fees
16    and charges other than entrance fees, showing individual
17    rates presently anticipated to be charged and including a
18    description of the assumptions used for calculating the
19    estimated occupancy rate of the facility and the effect on
20    the income of the facility of government subsidies for
21    health care services; and (vi) such other material
22    information concerning the facility or the provider as the
23    provider wishes to include.
24        (7) Forecasted financial statements for the provider
25    of the next 5 years, including a balance sheet, a statement
26    of operations, a statement of cash flows, and a statement



10000HB4664ham001- 8 -LRB100 20398 MJP 39195 a

1    detailing all significant assumptions, compiled by an
2    independent certified public accountant.
3    The cover page of the disclosure statement shall state, in
4a prominent location and in boldface type, the date of the
5disclosure statement and that the delivery of the disclosure
6statement to a contracting party before the execution of a
7continuing care contract is required by this Section but that
8the disclosure statement has not been reviewed or approved by
9any government agency or representative to ensure accuracy or
10completeness of the information set out. A copy of the standard
11form of a continuing care contract used by the provider shall
12be attached to each disclosure statement. The Department may
13require a provider to alter or amend its disclosure statement
14in order to provide full and fair disclosure to prospective
15residents. The Department may also require the revision of a
16disclosure statement that it finds to be unnecessarily complex,
17confusing, or illegible.
18    (b) A continuing care contract for a facility used by a
19provider shall provide all of the following:
20        (1) The party contracting with the provider may rescind
21    the continuing care contract at any time before occupying a
22    living unit in the facility, in which event the party
23    shall, within a reasonable period, receive a refund of all
24    money or property transferred to the provider, less: (i)
25    those costs specifically incurred by the provider or
26    facility at the request of the party and described in the



10000HB4664ham001- 9 -LRB100 20398 MJP 39195 a

1    continuing care contract or an addendum thereto signed by
2    the party; and (ii) a reasonable service charge, if set out
3    in the continuing care contract, not to exceed 1% of the
4    entrance fee. If the living unit is available for occupancy
5    on the occupancy date agreed upon in the continuing care
6    contract, and the party failed to occupy the living unit,
7    the party shall be deemed to have rescinded the continuing
8    care contract, unless the party and the provider agree in
9    writing to extend the occupancy date.
10        (2) If the living unit is not available for occupancy
11    on the date agreed upon in the continuing care contract,
12    then the party has 14 days to rescind the continuing care
13    contract. If the continuing care contract is rescinded,
14    then, within a reasonable period, the party shall receive a
15    refund of all money or property transferred to the provider
16    plus a reasonable inconvenience fee, if set out in the
17    continuing care contract, not to exceed 1% of the amount of
18    the entrance fee.
19        (3) If a resident dies before occupying a living unit
20    in the facility, the continuing care contract is
21    automatically canceled and the legal representative of the
22    resident shall receive a refund of all money or property
23    transferred to the provider, less: (i) those costs
24    specifically incurred by the provider or facility at the
25    request of the party and described in the continuing care
26    contract or an addendum to the continuing care contract



10000HB4664ham001- 10 -LRB100 20398 MJP 39195 a

1    signed by the party; and (ii) a reasonable service charge,
2    if set out in the continuing care contract, not to exceed
3    1% of the entrance fee.
4        (4) The services provided or proposed to be provided
5    under a continuing care contract, including the extent to
6    which medical care is furnished, and specify those services
7    that are included in the basic continuing care contract and
8    those made available at or by the facility at extra charge.
9        (5) A description of all fees required of residents,
10    including the entrance fee and periodic charges, if any. If
11    the facility is already in operation, or if the provider or
12    manager operates one or more similar facilities within the
13    State, there shall be included tables showing the frequency
14    and average dollar amount of each increase in monthly rates
15    at each facility for the previous 5 years or such shorter
16    period as the facility may have been operated by the
17    provider or manager.
18        (6) The health and financial conditions required for an
19    individual to be accepted as a resident and to continue as
20    a resident once accepted, including the effect of any
21    change in the health or financial condition of a person
22    between the date of entering a continuing care contract and
23    the date of initial occupancy of a living unit by that
24    person.
25        (7) The provisions that have been made or will be made,
26    if any, to provide reserve funding or security to enable



10000HB4664ham001- 11 -LRB100 20398 MJP 39195 a

1    the provider to fully perform its obligations under a
2    continuing care contract, including the establishment of
3    escrow accounts, trusts, or reserve funds.
4    (c) A provider providing continuing care at a facility on
5the effective date of this Act under a continuing care contract
6that requires prepayment for some or all of the covered
7services shall, within 180 days after the effective date of
8this Act, forward a copy of the following to the Department:
9            (1) the disclosure statement required under
10        subsection (a) to be delivered to a person with whom a
11        continuing care contract shall be entered; and
12            (2) the continuing care contract to be entered into
13        by the provider under subsection (b) with a person who
14        will occupy a living unit in a facility.
15    The Department shall make the information available to the
17    (d) Residents may:
18        (1) establish a residents' association and elect the
19    officers of the residents' association;
20        (2) receive, upon request, a current copy of a
21    facility's disclosure statement as described in subsection
22    (a), and providers shall, upon request, make a reasonable
23    effort to explain the terms and information contained
24    within the disclosure document; however, nothing in this
25    paragraph (2) shall be construed to modify the contractual
26    rights of residents or providers; providers may make



10000HB4664ham001- 12 -LRB100 20398 MJP 39195 a

1    reasonable provisions for the form and manner in which the
2    requests shall be submitted;
3        (3) submit comments to providers on matters that may
4    affect the health and welfare of residents and affect the
5    future of the facility, including, but not limited to, the
6    facility's size and ownership and the provider's financial
7    health; providers may make reasonable provisions for the
8    form and manner in which the comments shall be submitted
9    and shall seek comment from residents when designing or
10    adopting policies that significantly affect the future of
11    the facility;
12        (4) receive, upon request, information regarding any
13    major construction, modification, expansion, or renovation
14    of the facility, including information on cost estimates,
15    funding, financing, projected income, schedule, and
16    impacts on the existing facility; providers may make
17    reasonable provisions for the form and manner in which the
18    requests shall be submitted; and
19        (5) receive, upon request, information regarding the
20    purpose and intended funding of all financial reserves kept
21    by a provider; providers may make reasonable provisions for
22    the form and manner in which the requests may be submitted.
23    (e) A provider shall:
24        (1) offer a reasonable explanation of any adjustment in
25    monthly fees and other major fees paid by residents; and
26        (2) inform residents of matters that may affect the



10000HB4664ham001- 13 -LRB100 20398 MJP 39195 a

1    health and welfare of residents and affecting the future of
2    the facility, including, but not limited to, the facility's
3    size and ownership and the provider's financial health; on
4    these matters, the providers shall facilitate
5    communications between residents and management, which may
6    include residents' representation on the provider's
7    managing body, but need not depend solely on board
8    representation.
9    (f) Notwithstanding the remedy set forth in subsection (b),
10a violation of this Section by a provider for a facility shall
11constitute an unlawful practice under the Consumer Fraud and
12Deceptive Business Practices Act.
13    (g) A facility must comply with this Section on and after
14180 days after the effective date of this Act.
15    Section 20. Audits of providers. The Director or his or her
16authorized designee may conduct an audit or other examination
17of the financial affairs of any provider as often as the
18Director deems it necessary for the protection of the interests
19of the residents and the people of this State and, for this
20purpose, shall have access to the books, records, financial
21data, and other documents maintained by the facility.
22    Section 25. Annual report. A printed report compiled by the
23provider of a facility shall be provided to all residents of
24the facility on an annual basis and submitted to the Department



10000HB4664ham001- 14 -LRB100 20398 MJP 39195 a

1on an annual basis. The report shall be provided to a resident
2electronically, upon request. The report shall be updated with
3the information for the preceding year as well as future
4projections, where specified. The report shall be in 12-point
5bold type and provide, at minimum, the following:
6        (1) a statement detailing the facility's financial
7    condition;
8        (2) audited balance sheets;
9        (3) a statement of income and expenses;
10        (4) a statement of cash flow;
11        (5) a list of reserve assets;
12        (6) a summary of the most recent State inspections;
13        (7) the policy if financial difficulties arise;
14        (8) the rules and regulations of the facility;
15        (9) the life changes policy; and
16        (10) anticipated fee increases for the upcoming year.
17    Section 30. Online consumer database. The Department shall
18provide the public with online access to the annual reports
19required under Section 25, facility inspection reports, and any
20other documentation that the Department determines may be
21useful for the public regarding these facilities.
22    Section 35. Electronic submissions required. All
23documentation submitted to the Department under this Act shall
24be submitted electronically in a format stipulated by the



10000HB4664ham001- 15 -LRB100 20398 MJP 39195 a

2    Section 90. The Consumer Fraud and Deceptive Business
3Practices Act is amended by adding Section 2VVV as follows:
4    (815 ILCS 505/2VVV new)
5    Sec. 2VVV. Violations of the Continuing Care Retirement
6Community Transparency Act. A provider for a facility under the
7Continuing Care Retirement Community Transparency Act who
8violates Section 15 of the Continuing Care Retirement Community
9Transparency Act commits an unlawful practice within the
10meaning of this Act.".