You are on the grounds of something called a CCRC—continuing care retirement community. The campus is lovely, the staff is friendly, the twin single is luxurious and expensive, but what are you really getting for your money? You’ve been told that the entrance fee is refundable, but can you trust these people to refund your money? They say you can “age in place,” but what does that mean? All good questions.
Q: I’m a 65-year-old widow, and I’m considering moving into a continuing care retirement community. How are these communities funded?
A: Most such communities have two separate streams of income. The first comes from your entrance fees, which may be wholly or partially refundable depending upon the community. This money is used for capital upkeep and replacement of the physical structures. You do not “buy” the twin single or apartment unit. In fact, you get no interest in the property. However, you do get the right to occupy the property as long as you meet certain conditions that should be spelled out in the contract.
The second stream of income is the payment for services. This comes from residents and is used as operating income to provide the services such as meals, housekeeping, maintenance, transportation and recreational and social activities. Many communities offer a “menu” of services in both independent and assisted living so that you may choose just what you need or want. For example, you may choose to receive one, two, three or no meals per day. If you need help with personal care, you may choose that service daily or less frequently, depending upon your needs. If you need skilled nursing care, either in your dwelling unit or in the licensed nursing facility, you will need to pay for this care. Payment may come from you, or from private insurance, Medicare or Medicaid. A CCRC may, however, offer several days or several weeks of nursing facility care at no additional charge as part of its service package.
Q: What kinds of questions should I ask while considering a CCRC?
A: You should ask about the kinds and levels of services that are offered, the policies about moving from one service level to the other, the charges for each and the financial stability of the organization. Ask for copies of resident agreements, including service descriptions and the criteria used to determine if a service level is appropriate. Talk to current residents and their families. Ask to attend a social function before deciding to move in.
Look up the licensed nursing home inspection reports at: www.medicare.gov/Nursing/Overview.asp. Also, find out if the community is accredited by the Continuing Care Accreditation Commission (CCAC) by visiting www.carf.org/Programs/AS. The CCAC is the only accrediting organization for CCRCs and other aging services networks. It was established in 1965 to ensure that retirement communities fulfill their responsibilities in giving quality aging services. To further monitor these centers, CCAC merged with the Commission on Accreditation of Rehabilitation Facilities (CARF) in 2003. The CARF International family of organizations, including CARF, CARF Canada and CARF-CCAC, is an independent, nonprofit accreditor of health and human services.
Ask for a copy of the community's annual report, including its financial report. If it is a not-for-profit tax-exempt community, go to Guidestar at www.guidestar.org/index.jsp and review the organization’s annual 990 information tax return. Finally, if possible, obtain a credit report from Dun and Bradstreet or other rating company. If the community is a new one, ask to see the financial model and assumptions used to establish the timeline estimated to “fill up.” If you are not comfortable analyzing this information, ask your lawyer or financial professional to evaluate the information and explain it to you.
Q: Does any public agency regulate CCRCs?
A: The licensed nursing and residential care portions of a CCRC are licensed by the Ohio Department of Health. While a few states set financial standards for and provide oversight of CCRCs, there is no regulation or oversight of the community as a whole in Ohio. Ohio law does provide, however, that residents of a CCRC can make one resident a non-voting member of the organization’s Board of Directors.
Law You Can Use is a weekly consumer legal information column provided by the Ohio State Bar Association. This article was prepared by Martha Sweterlitsch, an attorney with the Columbus firm of Benesch Friedlander Coplan & Aronoff.