SB 1070 — Continuing Care Contracts

Florida Senate - 2019 CS for SB 1070 By Senatorthe LeeCommittee 20-00388A-19on 20191070__Banking Aand billInsurance; to be entitled An act relating to continuing care contracts;

and Senator Lee 597-02920-19 20191070c1 A bill to be entitled An act relating to continuing care contracts;

requiring such entities to provide certain information within a certain timeframe to the office under certain circumstances;

requiring affected providers to bear thecosts fees, costs, and expenses ofrelating to such consultants;

providingrequiring construction;increases in the minimum liquid reserve to be funded within a certain timeframe;

requiring providers to fund shortfalls in minimum liquid reserves under certain circumstances within a certain timeframe;

165168 Be It Enacted by the Legislature of the State of Florida:

167170 Section 1. Section 651.011, Florida Statutes, is amended to read:

233236 With prior written approval of the office, a demand note or other parental guarantee may be considered a short-term or long term investment for the purposes of paragraph (a).

297300 If the provider is a member of an obligated group having cross collateralized debt, the obligated group’s debt service coverage ratio and days cash on hand must be used to determine if the provider is impaired.

(25) “Regulatory action level event” means that any two of the following hashave occurred:

(a) The provider’s debt service coverage ratio is less than the minimum ratio specified in the provider’s bond covenants or lending agreement for long-term financing, or, if the provider does not have a debt service coverage ratio required by its lending institution, the provider’s debt service coverage ratio is less than 1.20:1 as of the most recent annual report filed with the office.

If the provider does not have a days cash on hand required by its lending institution, the days cash on hand may not be less than 100 as of the most recent annual report filed with the office.

(c) The 12-month average occupancy of the provider’s facility over the 12-month period ending on the reporting date is less than 80 percent.

The average occupancy must be calculated using the facility’s occupancy as of the last day of each month.

557561 If any material change occurs in the facts set forth in an application filed with the office pursuant to this subsection, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company.

If the office requests additional information and the applicant provides it within 5 business days after notification, the period for reviewing or approving an application may not be extended beyond the period specified in subsection (4).

633 Notwithstanding chapter 120, a person, other than the provider, the escrow agent, and the office, may not have a substantial interest in any decision by the office regarding the release of escrow funds in any proceeding under chapter 120 or this chapter.

733727 The statement must shall set forth the court or agency, the date of conviction or judgment, and the penalty imposed or damages assessed, or the date, nature, and issuer of the order.

765759 If any material change occurs in the facts set forth in an application filed with the office pursuant to this subsection, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company.

If the office requests additional information and the applicant provides it within 5 business days after notification, the period for reviewing or approving the application may not be extended beyond the period specified in subsection (5).

Section 8. Subsections (1),(1) (3), and (4),(4) paragraph (b) of subsection (5), and subsections (6) through (9) of section 651.023, Florida Statutes, are amended, and subsection (2) of that section is republished, to read:

951940 If any material change occurs in the facts set forth in an application filed with the office pursuant to this subsection, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company.

(3) Within 45 days after an application is deemed complete as set forth in subsection (2), and upon completion of the remaining requirements of this section, the office shall complete its review and issue or deny a certificate of authority to the holder of a provisional certificate of authority.

If a certificate of authority is denied, the office must notify the holder of the provisional certificate in writing, citing the specific failures to satisfy the provisions of this chapter.

If the office requests additional information and the applicant provides it within 5 business days after notification, the period for reviewing or approving an application may not be extended beyond the period specified in subsection (2).

If denied, the holder of the provisional certificate is entitled to an administrative hearing pursuant to chapter 120.

TheAs used in this section, the term “initial entrance fee” means the total entrance fee charged by the facility to the first occupant of a unit.

(a) A minimum of 75 percent of the moneys paid for all or any part of an initial entrance fee collected for continuing care or continuing care at-home must shall be placed in an escrow account or on deposit with the department as prescribed in s.

651.033.

651.0246 s.

10671047 Notwithstanding chapter 120, no person, other than the provider, the escrow agent, and the office, may have a substantial interest in any office decision regarding release of escrow funds in any proceedings under chapter 120 or this chapter regarding release of escrow funds.

651.024 Acquisition.— (1) A person who seeks to assume the role of general partner of a provider or to otherwise assume ownership or possession of, or control over, 10 percent or more of a provider, a controlling company of the provider, or a provider’s assets, based on the balance sheet from the most recent financial audit report filed with the office, is issued a certificate of authority to operate a continuing care facility or a provisional certificate of authority shall be subject to the provisions of s.

If the provider has exceeded the current statewide median for days cash on hand, debt service coverage ratio, and total campusfacility occupancy for two consecutive annual reporting periods, the provider is automatically granted approval to expand the total number of existing units by up to 35 percent upon submitting a letter to the office indicating the total number of planned units in the expansion, the proposed sources and uses of funds, and an attestation that the provider understands and pledges to comply with all minimum liquid reserve and escrow account requirements.

For purposes of this section, the statewide median for days cash on hand, debt service coverage ratio, and total campusfacility occupancy is the median calculated in the most recent annual report submitted by the office to the Continuing Care Advisory Council pursuant to s.

12361217 If the application is denied, the office must notify the applicant in writing, citing the specific failures to meet the provisions of this chapter.

1275 If any material change occurs in the facts set forth in an application filed with the office pursuant to this section, an amendment setting forth such change must be filed with the office within 10 business days after the applicant becomes aware of such change, and a copy of the amendment must be sent by registered mail to the principal office of the facility and to the principal office of the controlling company.

13291318 Notwithstanding chapter 120, only the provider, the escrow agent, and the office have a substantial interest in any office decision regarding release of escrow funds in any proceedings under chapter 120 or this chapter.

(10) Within(10) By 90August days1 afterannually, the conclusion of each annual reporting period, the office shall publish an industry benchmarking report thatfor the preceding calendar year which contains all of the following:

(c) The median occupancy rate for all providers by setting, including independent living, assisted living, skilled nursing, and the entire campus.facility.