Section 396.10 Definitions
"Act"
means the Life Care Facilities Act (Ill. Rev. Stat. 1989, ch. 111 1/2, par.
4160 et seq.).
"Certificates
of need" means those permits issued pursuant to the Illinois Health
Facilities Planning Act, as now or hereafter amended (Section 2(n)
of the Act, Ill. Rev. Stat. 1989, ch. 111½, pars. 1151 et seq.).
"Department"
means the Department of Public Health (Section 2(a) of the Act).
"Director"
means the Director of the Department (Section 2(b) of the Act).
"Entrance
Fee" means an initial or deferred transfer to a provider of a sum of money
or property, made or promised to be made by a person entering into a Life Care
Contract, which assures a resident of services pursuant to a life care contract
(Section 2(h) of the Act).
"Escrow
Account" means an account with a bank, trust company, or other financial
institution located in the State of Illinois, held in the name of the provider
and the escrow agent. The escrow account is returned to the provider or paid to
a third party on fulfillment of the escrow conditions.
"Facility"
means a place or places in which a provider undertakes to provide a resident
with nursing services, medical services or personal care services, in addition
to maintenance services for a term in excess of one year or for life pursuant
to a life care contract. The term also means a place or places in which a
provider undertakes to provide such services to a non-resident (Section
2(f) of the Act).
"Financial
disclosure statement" means the most recently completed and audited
financial statement, and shall include, but not be limited to, disclosure of
short term assets and liabilities. This financial disclosure statement is
to be delivered to prospective residents of a life care facility by the
provider.
"Financial
Institution" means a savings and loan association authorized to do
business under the "Illinois Savings and Loan Act of 1985", as
amended (Ill. Rev. Stat. 1987, ch. 17, par. 3301 et seq.), or a credit union
authorized to do business under the "Illinois Credit Union Act", as
amended (Ill. Rev. Stat. 1987, ch. 17, par. 4401 et seq.).
"Letter
of Credit" means an official guarantee from the issuer (bank, trust
company, or other financial institution located in the State of Illinois) to
honor the commitments imposed in its provision for the length of time and
amount specified. Since the issuer pledges its full faith and credit behind
the instrument, it is a security equal to that of an escrow account. A letter
of credit must be irrevocable and subject to the provisions of Section 7 of the
Act which apply to the escrow in lieu of which the Letter of Credit is
established.
"Life
Care Contract" means a contract to provide to a person for the duration of
such person's life or for a term in excess of one (1) year, nursing services,
medical services or personal care services, in addition to maintenance services
for such person in a facility, conditioned upon the transfer of an entrance fee
to the provider of such services in addition to or in lieu of the payment of
regular periodic charges for the care and services involved (Section 2(c)
of the Act).
"Living
Unit" means an apartment, room or other area within a facility set aside
for the exclusive use of one or more identified residents, who have entered
into a Life Care Contract (Section 2(g) of the Act).
"Maintenance
Services" means food, shelter and laundry services (Section 2(m) of
the Act).
"Medical
Services" means those services pertaining to medical or dental care that
are performed in behalf of patients at the direction of a physician licensed
under the Medical Practice Act of 1987 (Ill. Rev. Stat. 1989, ch. 111,
pars. 4400-1) or a dentist licensed under the Illinois Dental Practice Act
(Ill. Rev. Stat. 1989, ch. 111, pars. 2301 et seq.) such physicians or by a
registered or licensed practical nurse as defined in the Illinois Nursing Act
of 1987 (Ill. Rev. Stat. 1989, ch. 111, pars. 3501 et seq.) or by other
professional and technical personnel. The Department shall not prescribe
the course of medical treatment provided to an individual resident by the
resident's physician in a facility.
"Newly
Constructed Facility" means a life care facility which has not previously
existed, at a site where structures are built or remodeled for the purpose of
providing a place of residence for life care contractees.
"Non-Resident"
means a person admitted to a facility who has not entered into a life care
contract (Section 2(o) of the Act).
"Nursing
Services" means those services pertaining to the curative, restorative and
preventive aspects of nursing care that are performed at the direction of a
physician licensed under the Medical Practice Act of 1987 by or under the
supervision of a registered or licensed practical nurse as defined in the
Illinois Nursing Act of 1987. For purposes of the Act and this Part, the
term only applies to services provided in a facility licensed under the Nursing
Home Care Act (Ill. Rev. Stat. 1989, ch. 111½, par. 4151-101 et seq.) (Section 2(k)
of the Act).
"Permit"
means a written authorization to enter into life care contracts issued by the
Department to a provider (Section 2(i) of the Act).
"Personal
Care Services" means assistance with meals, dressing, movement, bathing or
other personal needs or maintenance, or general supervision and oversight of
the physical and mental well-being of an individual, who is incapable of
maintaining a private independent residence or who is incapable of managing his
person whether or not a guardian has been appointed for such individual.
For purposes of the Act and this Part, the term only applies to services
provided in a facility licensed under the Nursing Home Care Act (Ill. Rev.
Stat. 1989, ch. 111½, par. 4151-101 et seq.) (Section 2(l) of the Act).
"Provider"
means a person who provides services pursuant to a life care contract
(Section 2(d) of the Act).
"Ready
for occupancy" means that the facility's completed structure is ready to
initiate and sustain full operations as a Life Care residence. All mechanical
systems, including plumbing, electrical systems, ventilation systems for
heating and cooling, and emergency alarm systems must be fully functional.
Access driveways and walkways must be in place, and all services as described
in the Life Care contract must be available. The facility must be in
compliance with all existing local housing codes.
"Regular
periodic charges" means the monthly fee for care and services as described
in the life care contract.
"Resident"
means a person who enters into a life care contract with a provider, or who is
designated in a life care contract to be a person provided with maintenance and
nursing, medical or personal care services (Section 2(e) of the Act).
"Substantially
completed" means that the facility's entire structure and grounds are
completed as described in the facility's architectural blueprints and
construction contracts, and that the facility is in compliance with existing
local building codes.
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TITLE 77: PUBLIC HEALTH
CHAPTER I: DEPARTMENT OF PUBLIC HEALTH
SUBCHAPTER d: LONG-TERM CARE FACILITIES
PART 396
LIFE CARE FACILITIES CONTRACT CODE
SECTION 396.20 WHO MUST OBTAIN A PERMIT
Section 396.20 Who Must
Obtain a Permit
Any provider who proposes to
establish or acquire a life care facility must receive a permit from the
Department.
| TITLE 77: PUBLIC HEALTH
CHAPTER I: DEPARTMENT OF PUBLIC HEALTH
SUBCHAPTER d: LONG-TERM CARE FACILITIES
PART 396
LIFE CARE FACILITIES CONTRACT CODE
SECTION 396.30 APPLICATION FOR A PERMIT
Section 396.30 Application
for a Permit
a) Applications shall be made on forms provided by the
Department. Applications forms may be obtained by writing to:
Illinois
Department of Public Health
Division of
Health Statistics and Policy Development
535 West
Jefferson Street, Second Floor
Springfield,
Illinois 62761
b) An application for a permit to operate a life care facility
must contain the following:
1) A copy of the proposed form of life care contract to be
entered into with residents (Section 4 of the Act).
2) A copy of the letter of credit or escrow agreement as
provided by Section 7 of the Act. To allow the Department to determine the
provider's compliance with Section 7 of the Act, a complete, detailed written
description of any long-term financing of the facility must be submitted with
the application. The submission of a copy of the escrow agreement or letter of
credit will fulfill this requirement if the document contains such a
description.
3) A permit application fee of $100.00 (Section 4 of the
Act).
4) An audited statement of the facility's financial position in
each of the three years prior to the application.
A) If the facility has not previously existed, audited financial
statements, including an equity statement, with descriptions of the facility's
start-up capital and financing are required.
B) Financial statements of the provider shall be prepared in
accordance with generally accepted accounting principles and reported upon by
certified public accountants with generally accepted auditing standards.
5) The identity of the licensed or facilities at which licensed
care will be provided to those residents in need of such care, as provided for
in life care contract.
A) Newly constructed facilities may make licensed long term care
beds available to non-residents only with the approval of the Department.
Approval will be based upon whether the facility will be providing sufficient
licensed beds to accomodate its residents without having to transfer or
discharge any resident or non-resident. Facilities seeking such approval shall
include with the application a written explanation as to how the above will be
accomplished. This explanation shall include at a minimum, the number and type
of licensed beds at the facility, the maximum number of beds that will be used
for non-residents, a description of any plans to phase out the number of beds
to be used for non-residents, and projections of the number and types of
licensed beds that will be needed for residents, along with the basis for those
projections. Facilities which received a "continuum of care
variance" from the Illinois Health Facilities Planning Board under 77 Ill.
Adm. Code 1110.1730(c)(3) will not receive approval to admit non-residents to
long-term care beds.
B) If the life care facility contains no licensed long-term care
beds, a written explanation of plans to meet the eventual needs of those
residents who require contractually entitled levels of care, beyond maintenance
services in living units, must be provided to the Department at the time of
application. "Living units", and "Maintenance Services" are
defined in Section 396.10 of the Life Care Facilities Contract Code.
| TITLE 77: PUBLIC HEALTH
CHAPTER I: DEPARTMENT OF PUBLIC HEALTH
SUBCHAPTER d: LONG-TERM CARE FACILITIES
PART 396
LIFE CARE FACILITIES CONTRACT CODE
SECTION 396.40 PERMITS
Section 396.40 Permits
Applications will be reviewed
and permits granted or denied in accordance with the criteria of this Part.
a) Permits shall be issued for a specific number of living units
and
b) Permits shall be granted to specific grantees and are not
transferable.
| TITLE 77: PUBLIC HEALTH
CHAPTER I: DEPARTMENT OF PUBLIC HEALTH
SUBCHAPTER d: LONG-TERM CARE FACILITIES
PART 396
LIFE CARE FACILITIES CONTRACT CODE
SECTION 396.50 PROVIDER RESPONSIBILITIES
Section 396.50 Provider
Responsibilities
a) At the time of or prior to the execution of a life care
contract and the transfer of any money or other property to a provider or
escrow agent, the provider shall deliver to the resident a copy of a financial
disclosure statement reflecting the provider's financial condition (Section
5(a) of the Act).
b) The life care contract shall provide that any person
entering the contract shall have a period of 14 days beginning with the first
full calendar day following the execution of the contract, or the payment of an
initial sum of money as a deposit or application fee, or receipt of the
financial disclosure statement, whichever occurs last, within which to rescind
the life care contract without penalty or further obligation. In the event of
such rescission, all money or property paid or transferred by such person shall
be fully refunded. No person shall be required to move into a facility until
after the expiration of the 14 day recision period (Section 5(b) of the
Act).
c) To the extent that a facility also qualifies as a long-term
care facility under the Nursing Home Care Act, then the long-term care portion
of the facility must comply with that Act and the regulations promulgated
thereunder as well as the Act and this Part.
d) When required by subsections (e) and (f) below, the provider
shall establish and maintain on a current basis, an escrow account and/or
letter of credit with a bank, trust company, or other financial institution
located in the State of Illinois. Such financial institution shall provide to
the Department notification describing the facility's escrow account or letter
of credit on an annual basis and within 15 days of any change affecting the
escrow account or letter of credit.
e) Requirements for new facilities:
1) If the entrance fee applies to a living unit which has not
previously been occupied by any resident, all entrance fee payments
representing either all or any smaller portion of the total entrance fee shall
be paid to the escrow agent by the resident (Section 7(a)(1) of the Act).
2) When the provider has sold at least ½ of the living units
covered by a single permit, obtained a mortgage commitment, if needed, and
obtained all necessary zoning permits and certificates of need, if required,
the escrow agent may release a sum representing 1/5 of the resident's total
entrance fee to the provider. Upon completion of the foundation of the living
unit an additional 1/5 of the resident's total entrance fee may be released to
the provider. When the living unit is under roof a further and additional 1/5
of the resident's total entrance fee may be released to the provider. All
remaining monies, if any, shall remain in escrow until the resident's living
unit is substantially completed and ready for occupancy by the resident. When
the living unit is ready for occupancy the escrow agent may release the
remaining escrow amount to the provider and further entrance fee payments, if
any, may be paid by the resident to the provider directly. All monies released
from escrow shall be used for the facility and for no other purpose.
(Section 7(a)(2) of the Act)
f) Requirements for all facilities:
At the time
of resident occupancy and at all times thereafter, the escrow amount shall be
in an amount which equals or exceeds the aggregate principal and interest
payments due during the next 6 months on account of any first mortgage or other
long-term financing of the facilities (Section 7(b)(1) of the Act). Balloon
payments due at the conclusion of the Mortgage shall not be subject to the
escrow requirements (Section 7(b)(5) of the Act). In lieu of the escrow
account, the provider may obtain an irrevocable letter of credit in the amount
required by this provision. The letter of credit shall specify that funds are
to be paid out in the amount and manner specified by the Director.
g) The escrow monies required by Section 6 of the Act may
be released to the provider upon approval by the Director. Such approval
shall only be granted in the event of unforeseeable peril or calamity, such as
damage due to fire, vandalism, earthquake, etc., or in the event that the
escrow funds are the only source for payment of the long-term debt of the
facility. The Director may attach such conditions on the release of monies
as he deems fit including, but not limited to, the performance of an audit
which satisfies the Director that the facility is solvent, a plan from the
facility to bring the facility back in compliance with Section (6) and a
repayment schedule and that the funds be used solely for the purpose for
which they were released (Section 7(b)(2) of the Act).
h) An audited statement of the financial condition of the
facility must be submitted annually to the Department by the provider within
120 days of the close of the facility's fiscal year.
i) Providers must immediately report to the Department in
writing any changes in the financial condition of the facility which could
threaten the facility's ability to sustain operations or meet its contractual
obligations to its residents or creditors. Reportable changes in the
facility's financial condition include serious delinquency in payments due to
creditors, reduction of services to which residents are entitled, financial
loss due to theft or gross mismanagement, as well as loss due to physical
damage to the facility or legal damages for which the provider is found to be
liable.
j) If the facility ceases to operate all monies in the escrow
account except the amount representing principal and interest shall be repaid
by the escrow agent to the resident (Section 7(b)(4) of the Act). Such
repayments shall be in the form of a cashier's check.
| TITLE 77: PUBLIC HEALTH
CHAPTER I: DEPARTMENT OF PUBLIC HEALTH
SUBCHAPTER d: LONG-TERM CARE FACILITIES
PART 396
LIFE CARE FACILITIES CONTRACT CODE
SECTION 396.60 ENFORCEMENT PROVISIONS
Section 396.60 Enforcement
Provisions
a) At any time the Director receives notice from the escrow
agent that the provisions of Section 7 of the Act have not been complied with,
or at any other time when the Director has reason to believe that the provider
is insolvent, is in imminent danger of becoming insolvent or that its condition
is such that it may be financially unable to fully perform its obligations
pursuant to life care contracts, the Director shall, through the Attorney
General, file an appropriate action on behalf of the State of Illinois and any
or all residents in any court of competent jurisdiction, including the federal
bankruptcy court or any other federal court (Section 9 of the Act).
Factors which the Director shall consider in making the determination under
this subsection shall include, but not be limited to, those changes in a
facility's financial condition which are reportable under Section 396.50(i).
b) The Director or his authorized designee may conduct an
audit or other examination of the financial affairs of any provider as often as
he deems it necessary for the protection of the interests of the residents and
the people of this State, and for this purpose shall have access to the books,
records, financial data and other documents maintained by the facility
(Section 10 of the Act).
c) The Department shall deny the application for permit
or revoke or suspend an existing permit for violation of any provision of this
Part (Section 11 of the Act). Facilities which do not comply with all
provisions of this Part will not be granted Life Care Permits. Permittees
found to be in violation of the provisions of this Part will suffer suspension
of their Life Care Permit. Violations of the provisions of this Part which are
not remedied within 30 days after the facility receives notice of such
violation from the Department will result in the revocation of the facilitiy's
Life Care Permit. Proceedings for denial, revocation or suspension of a permit
will be conducted in accordance with the Department's Rules of Practice and
Procedure in Administrative Hearings (77 Ill. Adm. Code 100).
| TITLE 77: PUBLIC HEALTH
CHAPTER I: DEPARTMENT OF PUBLIC HEALTH
SUBCHAPTER d: LONG-TERM CARE FACILITIES
PART 396
LIFE CARE FACILITIES CONTRACT CODE
SECTION 396.70 PENALTY
Section 396.70 Penalty
Any person acting in the
capacity of a provider who enters into a life care contract, or extends the
term of an existing life care contract, without first having been issued a
permit by the Department or without otherwise acting in compliance with the
provisions of the Act, shall be guilty of a Class A misdemeanor (Section 12
of the Act).
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