HB3813 100TH GENERAL ASSEMBLY

LRB100 10419 MJP 20617 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3813

Introduced , by Rep. Kathleen Willis

SYNOPSIS AS INTRODUCED:

210 ILCS 135/14.5 new
815 ILCS 510/2	from Ch. 121 1/2, par. 312

Amends the Community-Integrated Living Arrangements Licensure and Certification Act. Adds provisions concerning required disclosures and contract requirements for providers of community-integrated living arrangements. Provides that at the time of or prior to the execution of a contract to provide continuing care at a community-integrated living arrangement, or at the time of or prior to the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall first occur, a provider shall deliver a disclosure statement to the person with whom the contract is to be entered into that contains specified information. Provides that all contracts for continuing care at a community-integrated living arrangement used by a provider shall include specified information. Contains provisions requiring a community-integrated living arrangement to make certain disclosures to the Department of Human Services. Provides that residents may receive, upon request, specified information from providers and may submit comments. Provides that providers shall, to the maximum extent practicable, offer specified explanations, inform residents of certain matters, and make use of specified standards and practices. Provides that a violation of these provisions by a provider of a community-integrated living arrangement shall constitute a deceptive trade practice under the Uniform Deceptive Trade Practices Act. Makes a corresponding change in the Uniform Deceptive Trade Practices Act. Makes other changes.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Community-Integrated Living Arrangements Licensure and Certification Act is amended by adding Section 14.5 as follows:

(210 ILCS 135/14.5 new)

Sec. 14.5. Required disclosures; contract requirements.

(a) As used in this Section:

"Entrance fee" means an initial or deferred transfer to a provider of a sum of money or other property made or promised to be made as full or partial consideration for acceptance of a specified individual as a resident in a community-integrated living arrangement. No part of any fee payable on a periodic basis for board, lodging, medical, or other health related services rendered by the provider to a resident shall be considered as constituting an entrance fee. No application charge or other sum payable in addition to such periodic fees, which does not exceed 4 times such periodic fees, shall be considered as constituting an entrance fee.

"Continuing care" means the furnishing to an individual, other than an individual related by consanguinity or affinity to the person furnishing such care, of board and lodging together with nursing services, medical services, or other health related services, regardless of whether or not the lodging and services are provided at the same location, pursuant to a contract effective for the life of the individual or for a period in excess of one year.

"Long term care services" means a combination of nursing home care, in-home nursing care, assisted living services, independent living services, home health care, personal care, homemaking, case management, or comparable services designed to enable a functionally impaired resident to maintain himself or herself and his or her living unit, as safely and comfortably as is reasonably possible in a continuing care setting as defined herein. "Long term care services" includes necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, or custodial care.

"Living unit" means a room, apartment, cottage, or other area within a community-integrated living arrangement set aside for the exclusive use or control of one or more identified individuals.

"Provider" means a person, including, but not limited to, an agency licensed under this Act, undertaking to provide continuing care in a community-integrated living arrangement that charges an entrance fee.

"Residents association" means an organization formed by the residents of a community-integrated living arrangement to represent the residents' interests before providers and to promote and provide for the general welfare of residents.

(b) At the time of or prior to the execution of a contract to provide continuing care at a community-integrated living arrangement, or at the time of or prior to the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall first occur, the provider shall deliver a disclosure statement to the person with whom the contract is to be entered into, the text of which shall contain, to the extent not clearly and completely set forth in the contract for continuing care at a community-integrated living arrangement attached as an exhibit thereto, at least the following information:

(1) The name and business address of the provider and a statement of whether the provider is a partnership, corporation, or other type of legal entity.

(2) The names of the officers, directors, trustees, or managing or general partners of the provider and a description of each such person's occupation with the provider.

(3) A description of the business experience of the provider in the operation or management of similar community-integrated living arrangements and of the manager of the community-integrated living arrangement if the community-integrated living arrangement will be managed on a day-to-day basis by an organization other than the provider. The description shall include information on any matter in which the manager or provider (A) has been convicted of a felony or pleaded nolo contendere to a felony charge, or been held liable or enjoined in a civil action by final judgment, if the felony or civil action involved fraud, embezzlement, fraudulent conversion, or misappropriation of property or (B) is subject to a currently effective injunctive or restrictive court order or, within the past 5 years, had any State or federal license or permit suspended or revoked as a result of an action brought by a governmental agency or department, if the order or action arose out of or related to business activity of health care, including actions affecting a license to operate a foster care facility, nursing home, retirement home, home for aged, or community-integrated living arrangement subject to this Act or a similar law in another state.

(4) A statement as to whether or not the provider is, or is affiliated with, a religious, charitable or other nonprofit organization; the extent of the affiliation, if any; the extent to which the affiliate organization will be responsible for the financial and contract obligations of the provider; and the provision of the federal Internal Revenue Code, if any, under which the provider or affiliate is exempt from the payment of income tax.

(5) The location and description of the physical property or properties of the community-integrated living arrangement, existing or proposed and, to the extent proposed, the estimated completion date or dates, whether or not construction has begun and the contingencies subject to which construction may be deferred.

(6) Certified financial statements of the provider, including a balance sheet as of the end of the most recent fiscal year and income statements for the 3 most recent fiscal years of the provider or such shorter period of time as the provider shall have been in existence. If the provider's fiscal year ended more than 90 days prior to the date the application is filed; interim financial statements as of a date not more than 90 days prior to such filing shall be included, but need not be certified.

(7) If the operation of the community-integrated living arrangement has not yet commenced, a statement of the anticipated source and application of the funds used or to be used in the purchase or construction of the community-integrated living arrangement, including: (A) an estimate of the cost of purchasing or constructing and equipping the community-integrated living arrangement including such related costs as financing expense, legal expense, land costs, occupancy development costs, and all other similar costs which the provider expects to incur or become obligated for prior to the commencement of operations; (B) a description of any mortgage loan or other long-term financing intended to be used for the financing of the community-integrated living arrangement, including the anticipated terms and costs of such financing; (C) an estimate of the total entrance fees to be received from residents at or prior to commencement of operation of the community-integrated living arrangement; (D) an estimate of the funds, if any, which are anticipated to be necessary to fund start-up losses and provide reserve funds to assure full performance of the obligations of the provider under contracts for continuing care at a community-integrated living arrangement; (E) a projection of estimated income from fees and charges other than entrance fees, showing individual rates presently anticipated to be charged and including a description of the assumptions used for calculating the estimated occupancy rate of the community-integrated living arrangement and the effect on the income of the community-integrated living arrangement of government subsidies for health care services, if any, to be provided pursuant to the contracts for continuing care at community-integrated living arrangements; and (F) such other material information concerning the community-integrated living arrangement or the provider as the provider wishes to include.

(8) In the event the provider has had an actuarial report prepared within the prior 2 years, the summary of a report of an actuary that estimates the capacity of the provider to meet its contractual obligations to the residents.

(9) Forecasted financial statements for the provider of the next 5 years, including a balance sheet, a statement of operations, a statement of cash flows, and a statement detailing all significant assumptions, compiled by an independent certified public accountant. Reporting routine, categories, and structure may be further defined by rules or forms adopted by the Secretary of Human Services.

(10) The estimated number of residents of the community-integrated living arrangement to be provided services by the provider pursuant to the contract for continuing care.

(11) Any other material information concerning the community-integrated living arrangement or the provider which, if omitted, would lead a reasonable person not to enter into the contract.

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 Section 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 out. A copy of the standard form of contract for continuing care used by the provider shall be attached to each disclosure statement. The Secretary of Human Service may prescribe a standardized format for the disclosure statement required by this subsection. The disclosure statement shall be in plain English and in language understandable by a layperson and combine simplicity and accuracy to fully advise residents of the items required by this subsection. The Department may require a provider to alter or amend its disclosure statement in order to provide full and fair disclosure to prospective residents. The Department may also require the revision of a disclosure statement which it finds to be unnecessarily complex, confusing, or illegible.

(c) All contracts for continuing care at a community-integrated living arrangement used by a provider shall provide that:

(1) The party contracting with the provider may rescind the contract at any time prior to occupying a living unit in the community-integrated living arrangement, in which event the party shall, within a reasonable period, receive a refund of all money or property transferred to the provider, less (A) those costs specifically incurred by the provider or community-integrated living arrangement at the request of the party and described in the contract or an addendum thereto signed by the party; and (B) a reasonable service charge, if set out in the contract, not to exceed 1% of the entrance fee. If the unit is available for occupancy on the occupancy date agreed upon in the contract, and the party has failed to occupy said unit, the party shall be deemed to have rescinded the contract, unless the party and the provider agree in writing to extend the occupancy date.

(2) If the unit is not available for occupancy on the date agreed upon in the contract, and the party has not rescinded the contract, the contract shall be automatically canceled, unless the party and the provider agree in writing to extend the occupancy date. If the contract is automatically canceled the party shall, within a reasonable period, receive a refund of all money or property transferred to the provider plus a reasonable inconvenience fee, if set out in the contract, not to exceed 1% of the amount of the entrance fee.

(3) If a resident dies before occupying a living unit in the community-integrated living arrangement, the contract is automatically canceled and the legal representative of the resident shall receive a refund of all money or property transferred to the provider, less (A) those costs specifically incurred by the provider or community-integrated living arrangement at the request of the resident and described in the contract or an addendum thereto signed by the resident and (B) a reasonable service charge, if set out in the contract, not to exceed 1% of the entrance fee.

(4) The entrance fee minus no more than 1% for each month of occupancy shall be refunded to the resident when the resident leaves the community-integrated living arrangement or to the legal representative of a resident if the resident dies.

(5) The services provided or proposed to be provided under contracts for care at the community-integrated living arrangement, including the extent to which medical care is furnished, and specifying those services which are included in the basic contract and those made available at or by the community-integrated living arrangement at extra charge.

(6) A description of all fees required of residents, including the entrance fee and periodic charges, if any. The description shall include: (A) a statement of the fees that will be charged if the resident marries while at the community-integrated living arrangement, and a statement of the terms concerning the entry of a spouse to the community-integrated living arrangement and the consequences if the spouse does not meet the requirement for entry, (B) the circumstances under which the resident will be permitted to remain in the community-integrated living arrangement in the event of possible financial difficulties of a resident, (C) the conditions under which a living unit occupied by a resident may be made available by the community-integrated living arrangement to a different or new resident other than on the death of the original resident, and (D) the manner by which the provider may adjust periodic charges or other recurring fees and the limitations on such adjustments, if any. If the community-integrated living arrangement is already in operation, or if the provider or manager operates one or more similar community-integrated living arrangements within the State, there shall be included tables showing the frequency and average dollar amount of each increase in periodic rates at each such community-integrated living arrangement for the previous 5 years or such shorter period as the community-integrated living arrangement may have been operated by the provider or manager.

(7) The health and financial conditions required for an individual to be accepted as a resident and to continue as a resident once accepted, including the effect of any change in the health or financial condition of a person between the date of entering a contract for continuing care at a community-integrated living arrangement and the date of initial occupancy of a living unit by that person.

(8) The provisions that have been made or will be made, if any, to provide reserve funding or security to enable the provider to fully perform its obligations under contracts to provide continuing care at a community-integrated living arrangement, including the establishment of escrow accounts, trusts, or reserve funds, together with the manner in which such funds will be invested and the names and experience of persons who will make the investment decisions.

Any contract drawn in violation of this subsection may be rescinded by the resident and the resident shall be entitled to a full refund of the entrance fee.

(d) For the purpose of this subsection, "market" shall include, but not be limited to, establishment of a waiting list, acceptance of money, property, or other consideration, or distribution of marketing brochures by the provider.

Any provider intending to market or develop a community-integrated living arrangement pursuant to a contract which would require prepayment for some or all of the a community-integrated living arrangement's services or intending to market or develop additional units of a community-integrated living arrangement shall forward a copy of the following information to the Department within 30 days following the implementation of marketing of the community-integrated living arrangement:

(1) the disclosure statement required under subsection (b) to be delivered to the persons with whom the contract for a community-integrated living arrangement is to be entered;

(2) the contracts for a community-integrated living arrangement to be entered into by the provider under subsection (c) with a person who will occupy a living unit in a community-integrated living arrangement; and

(3) any available advertising or promotional material to be used in conjunction with such marketing effort.

A provider shall forward a copy of any changes in the information required to be provided within 30 days after the provider's utilization of such changed materials with prospective residents or residents of the community-integrated living arrangement. A provider intending to market or develop additional units of a community-integrated living arrangement who has filed such information with the Department pursuant to a previous marketing effort on the same units shall not be required to refile unless there has been a change in the information submitted. The Department shall make such information available to the public in a manner which shall allow residents and prospective residents to make informed choices regarding the selection of a provider, packages of services and coverage, and care alternatives.

Such provider shall forward a copy of the building permit for such community-integrated living arrangement to the Department within 30 days after its issuance by the city or town wherein such community-integrated living arrangement shall be located.

(e) A provider providing continuing care at a community-integrated living arrangement on the effective date of this amendatory Act of the 100th General Assembly under a contract which would require prepayment for some or all of the covered services shall, within 30 days after such effective date, forward a copy of the following information to the Department:

(1) the disclosure statement required under subsection (b) to be delivered to the persons with whom the contract for continuing care at a community-integrated living arrangement shall be entered;

(2) the contract for continuing care at a community-integrated living arrangement to be entered into by the provider under subsection (c) with a person who will occupy a living unit in any such community-integrated living arrangement;

(3) any available advertising or promotional material to be used in conjunction with such marketing effort; and

(4) a copy of the building permit for the community-integrated living arrangement.

A provider shall forward a copy of any changes in the information required to be provided within 30 days after the provider's utilization of such materials with prospective residents or residents of the community-integrated living arrangement. A provider intending to market or develop additional units of a community-integrated living arrangement who has filed such information with the Department pursuant to a previous marketing effort on the same units shall not be required to refile unless there has been a change in the information submitted. The Department shall make such information available to the public in a manner which shall allow residents and prospective residents to make informed choices regarding the selection of a provider, packages of services and coverage, and care alternatives.

(f) Residents may:

(1) establish a residents association and elect the officers of the residents association;

(2) receive, upon request, a current copy of the community-integrated living arrangement's disclosure statement as described in subsection (b), and providers shall, upon request, make a reasonable effort to explain the terms and information contained within the disclosure document; provided, however, that nothing in this paragraph shall be construed to modify the contractual rights of residents or providers and providers may make reasonable provisions for the form and manner in which such requests shall be submitted;

(3) submit comments to providers on matters that may affect the health and welfare of residents and affecting the future of the community-integrated living arrangement, including, but not limited to, the community-integrated living arrangement's size and ownership and the provider's financial health; provided, that providers may make reasonable provisions for the form and manner in which such comments shall be submitted; and provided further, that, to the maximum extent feasible, providers shall seek comment from residents when designing or adopting policies that significantly affect the future of the community-integrated living arrangement;

(4) receive, upon request, information regarding any major construction, modification, expansion or renovation of the community-integrated living arrangement, including information on cost estimates, funding, financing, projected income, schedule and impacts on the existing community-integrated living arrangement; provided, that providers may make reasonable provisions for the form and manner in which such requests shall be submitted; and

(5) receive, upon request, information regarding the purpose and intended funding of all financial reserves kept by the provider; provided, that providers may make reasonable provisions for the form and manner in which such requests may be submitted.

(g) Providers shall, to the maximum extent practicable:

(1) offer a reasonable explanation of any adjustments in monthly fees and other major fees paid by residents;

(2) inform residents of matters that may affect the health and welfare of residents and affecting the future of the community-integrated living arrangement, including, but not limited to, the community-integrated living arrangement's size and ownership and the provider's financial health; provided, that on such matters, providers shall facilitate communications between residents and management and between residents and boards or owners, which may include residents' representation on the provider's managing body, but need not depend solely on board representation; and

(3) make use of applicable standards and practices to maintain and project each community-integrated living arrangement's operational and financial viability and, upon request, give that information regarding such standards and practices used by providers to the residents; provided, that providers may make reasonable provisions for the form and manner in which such requests shall be submitted.

(h) Notwithstanding the remedy set forth in subsection (c), a violation of this Section by a provider of a community-integrated living arrangement shall constitute a deceptive trade practice under the Uniform Deceptive Trade Practices Act.

Section 10. The Uniform Deceptive Trade Practices Act is amended by changing Section 2 as follows:

(815 ILCS 510/2) (from Ch. 121 1/2, par. 312)

Sec. 2. Deceptive trade practices.

(a) A person engages in a deceptive trade practice when, in the course of his or her business, vocation, or occupation, the person:

(1) passes off goods or services as those of another;

(2) causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services;

(3) causes likelihood of confusion or of misunderstanding as to affiliation, connection, or association with or certification by another;

(4) uses deceptive representations or designations of geographic origin in connection with goods or services;

(5) represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he or she does not have;

(6) represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used, or secondhand;

(7) represents that goods or services are of a particular standard, quality, or grade or that goods are a particular style or model, if they are of another;

(8) disparages the goods, services, or business of another by false or misleading representation of fact;

(9) advertises goods or services with intent not to sell them as advertised;

(10) advertises goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;

(11) makes false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions;

(11.1) is a provider of a community-integrated living arrangement and violates Section 14.5 of the Community-Integrated Living Arrangements Licensure and Certification Act; or

(12) engages in any other conduct which similarly creates a likelihood of confusion or misunderstanding.

(b) In order to prevail in an action under this Act, a plaintiff need not prove competition between the parties or actual confusion or misunderstanding.

(c) This Section does not affect unfair trade practices otherwise actionable at common law or under other statutes of this State.

(Source: P.A. 92-16, eff. 6-28-01)