SB 622 — Continuing Care Contracts

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ all other sources of revenue.

10.Page 4 of 22 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 CS for SB 622 597-03561-23 2023622c1 10.

An independent evaluation and examination opinion for the first 5 years of operations, or a comparable opinion acceptable to the office, by the certified public accountant consultant who prepared the study, of the underlying assumptions used as a basis for the Pageforecasts 5or ofprojections 24in CODING:the study and that the assumptions are reasonable and proper and the project as proposed is feasible.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ forecasts or projections in the study and that the assumptions are reasonable and proper and the project as proposed is feasible.

(4) The provider is entitled to secure release of the moneys held in escrow within 7 days after receipt by the office of an affidavit from the provider, along with appropriate copies toPage verify,5 andof notification22 toCODING: the escrow agent by certified mail that the following conditions have been satisfied:

(b) Payment in full has been received for at least 50 percent of the total units of a phase or of the total of the combined phases constructed;

or at least 75 percent of the proposed units for which an entrance fee is charged for a phase or a total of the combined phases are reserved and the provider submits an attestation to the office to use the entrance fees collected and held in escrow for the sole purpose of paying secured indebtedness as specified in the feasibility study submitted to the office pursuant to paragraph (2)(a).

If the expansion is to be completed in multiple phases, the 75 percent Page 6 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 reservationto requirementverify, appliesand separatelynotification to eachthe phaseescrow ofagent by certified mail that the expansion.following conditions have been satisfied:

(b) Payment in full has been received for at least 50 percent of the total units of a phase or of the total of the combined phases constructed;

or a provider has collected a reservation deposit for at least 75 percent of the proposed units for which an entrance fee is to be charged and the escrowed funds will be used for the sole purpose of paying secured indebtedness as specified in the feasibility study submitted pursuant to paragraph (2)(a).

The minimum reservation deposit must be the lesser of $40,000 or 10 percent of the then- current entrance fee for the unit being reserved.

If the expansion is to be completed in multiple phases, the 75 percent reservation requirement applies separately to each phase of the expansion.

(6) Within 30 45 days after the date on which an application is deemed complete as provided in paragraph (5)(b), the office shall complete its review and, based upon its review, approve an expansion by the applicant and issue a determination that the application meets all requirements of law, that the feasibility study was based on sufficient data and reasonable assumptions,Page and6 that the applicant will be able to provide continuing care or continuing care at-home as proposed and meet all financial and contractual obligations related to its operations, including the financial requirements of this22 chapter.CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 CS for SB 622 597-03561-23 2023622c1 assumptions, and that the applicant will be able to provide continuing care or continuing care at-home as proposed and meet all financial and contractual obligations related to its operations, including the financial requirements of this chapter.

Page(b) 7A financial report audited by an independent certified public accountant which must contain, for two or more periods if the facility has been in existence that long, all of 24the CODING:following:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ (b) A financial report audited by an independent certified public accountant which must contain, for two or more periods if the facility has been in existence that long, all of the following:

If the provider’s financial statements are consolidated or combined in accordance with generally accepted accounting principles with the financial statements of additional entities ownedPage or7 controlled by the provider, the financial report must provide as supplemental information the financial statements of the22 providerCODING: with the items in subparagraph 1.

for the individual facility shown separately and its consolidated or combined entities comprising the financial report.

4.

If the facility is a member of an obligated group, the facility may use the obligated group’s audited financial statements if they contain the items in subparagraph 1.

for the individual facility shown separately from other members of the obligated group.

Section 4.

Paragraph (a) of subsection (1) and paragraph (c) of subsection (3) of section 651.033, Florida Statutes, are amended, and paragraph (a) of subsection (3) of that section is Page 8 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 republished,owned toor read:controlled by the provider, the financial report must include as supplemental information a separate balance sheet, statement of income and expenses, statement of equity or fund balances, and statement of changes in cash flows for the individual provider and each additional entity comprising the consolidated or combined financial report.

4.

If the provider is a member of an obligated group, the provider may use the obligated group’s audited financial statements if they contain as supplemental information a separate balance sheet, statement of income and expenses, statement of equity or fund balances, and statement of changes in cash flows for the individual provider and other members of the obligated group.

Section 4.

Paragraph (a) of subsection (1) and paragraph (c) of subsection (3) of section 651.033, Florida Statutes, are amended, and paragraph (a) of subsection (3) of that section is republished, to read:

(a) The escrow account must be established in a Florida state-chartered bank, Florida savings bank and loan association, or Florida trust company, or a federal savings or thrift association, bank, savings bank, or trust company national bank that is chartered and supervised by the Office of the Comptroller of the Currency within the United States Department of the Treasury and that has a branch in this state, which is acceptable to the office, or such funds must be deposited with thePage department8 andof be22 keptCODING: and maintained in an account separate and apart from the provider’s business accounts.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 CS for SB 622 597-03561-23 2023622c1 the department and be kept and maintained in an account separate and apart from the provider’s business accounts.

Page(c) 9As an alternative to paragraph (a) At the request of 24an CODING:individual resident of a facility, the provider may hold the check for the 7-day period and may not deposit it during this time period.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ (c) As an alternative to paragraph (a) At the request of an individual resident of a facility, the provider may hold the check for the 7-day period and may not deposit it during this time period.

PresentSubsection subsection(6) (7) of section 651.034, Florida Statutes, is redesignatedamended as subsection (8), a new subsection (7) is added to that section, and subsection (6) of that section is amended, to read:

651.034 Financial and operating requirements for providers.— (6) The office may exempt a provider from subsection (1) or subsectionPage (2)9 until stabilized occupancy is reached or until the time projected to achieve stabilized occupancy as reported in the last feasibility study required by the office as part of an22 applicationCODING: filing under s.

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 CS for SB 622 597-03561-23 2023622c1 subsection (2) until stabilized occupancy is reached or until the time projected to achieve stabilized occupancy as reported in the last feasibility study required by the office as part of an application filing under s.

(7) Upon written request of a provider, the office may temporarily suspend all or a portion of financial and operating requirements under this chapter due to an extraordinary event rendering the provider incapable of continuing normal operations such as, but not limited to, a pandemic, a fire, or a federal or state executive order declaring a natural disaster which forces the provider to evacuate, curtail operations, restrict Page 10 of 24 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ admissions, or suspend marketing for lifesafety reasons or repairs related to the event.

Such temporary suspension may be granted by the office if the provider maintains compliance with ss.

651.026, 651.0261, and 651.035 and the provider is not insolvent or impaired.

The provider shall comply with required reporting requested by the office, including the estimated time for completing repairs or remediating problems related to restrictions on admissions or marketing.

When determining whether to grant a suspension of specific regulatory requirements, the office shall consider any formal action or amendments approved by a lender or trustee to the provider’s lending agreements or bond covenants as a result of the event.

(b) A provider that has outstanding indebtedness that requires a debt service reserve to be held in escrow pursuant to a trust indenture or mortgage lien on the facility and for which the debt service reserve may only be used to pay principal and interest payments on the debt that the debtor is obligated to pay, and which may include property taxes and insurance, may include such debt service reserve in computing the minimum liquid reserve needed to satisfy this subsection if the provider furnishes to the office a copy of the agreement under which such debt service reserve is held, together with a statement of the Pageamount 11being ofheld 24in CODING:escrow for the debt service reserve, certified by the lender or trustee and the provider to be correct.

The trustee shall provide the office with any information concerning the debt service reserve account upon Page 10 of 22 CODING:

Florida Senate - 2023 SBCS 622 4-00524A-23 2023622__ amount being held in escrow for theSB debt622 service597-03561-23 reserve,2023622c1 certifiedrequest byof the lenderprovider or trustee and the provideroffice. to be correct.

The trustee shall provide the office with any information concerning the debt service reserve account upon request of the provider or the office.

For purposes of this calculation, the proportional share shall be based upon the ratio of residents under continuing care or continuing care at- Pagehome 12contracts to the total of 24all CODING:residents, including those residents who do not hold such contracts.

(5) A provider may satisfy the minimum liquid reserve requirements of this section by acquiring from a financial Page 11 of 22 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 homeinstitution, contractsas specified in paragraph (b), a clean, unconditional irrevocable letter of credit equal to the totalrequirements of allthis residents,section, includingless thosethe residentsamount whoof doescrowed notoperating holdcash suchrequired contracts.by paragraph (d).

(5)(a) AThe providerletter mayof satisfycredit themust minimumbe liquidissued reserve requirements of this section by acquiring from a financial institution,institution asparticipating specified in paragraph (b), a clean, unconditional irrevocable letter of credit equal to the requirementsState of thisFlorida section,Treasury lessCertificate the amount of escrowedDeposit operatingProgram; cash required by paragraph (d).

(a) The letter of credit must be issued by a financial institution participating in the State of Florida Treasurystate-chartered Certificate of Deposit Program or a Florida bank, a Florida savings andbank, loanor association, a Florida trust company,company; or a national bank that is chartered and supervised by the Office of the Comptroller of the Currency within the United States Department of the Treasury, and must be approved by the office before issuance and before any renewal or modification thereof.

or a federal savings or thrift association, bank, savings bank, or trust company, and must be approved by the office before issuance and before any renewal or modification thereof.

Deposit by the financial institution of letter of credit funds in an account designated by the office within 4 business days following written instructions from the office that, in the sole judgment of the office, funding of the minimum liquid Pagereserve 13is ofrequired. 24 CODING:

(b) The terms of the letter of credit must be approved by the office and the long-term debt of the financial institution providing such letter of credit must be rated in one of their top three long-term debt rating categories by either Moody’s Page 12 of 22 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 reserveInvestors isService, required.Standard & Poor’s Corporation, or a recognized securities rating agency acceptable to the office.

(b) The terms of the letter of credit must be approved by the office and the long-term debt of the financial institution providing such letter of credit must be rated in one of their top three long-term debt rating categories by either Moody’s Investors Service, Standard & Poor’s Corporation, or a recognized securities rating agency acceptable to the office.

The withdrawal is from a debt service reserve required to be held in escrow pursuant to a trust indenture or mortgage lien on the facility as described in paragraph (1)(b) and will Pagebe 14used ofto 24pay CODING:principal or interest payments, which may include property taxes and insurance, the debtor is obligated to pay when sufficient funds are not available on the next principal or interest payment due date.

Page 13 of 22 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 The notice specified in paragraph (1)(b) must be usedsent to paythe delinquentoffice principalat andleast interest10 paymentsdays thebefore debtordebt isservice obligatedreserve tofunds paymay onbe thewithdrawn facility.without prior approval.

651.023(4) and fails to cancel such agreement within 30 days after executing the agreement and subsequently signs a residency contract pursuant to this section and rescinds the contract within 7 days, the forfeiture penalty authorized under s.

651.081 Residents’ council.— (2)(a) Each facility shall establish a residents’ council created for the purpose of representing residents on matters set Page 1514 of 2422 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 (2)(a) Each facility shall establish a residents’ council created for the purpose of representing residents on matters set forth in s.

Only one residents’ council may represent residentsPage before15 the governing body of the22 providerCODING: as described in s.

651.085(2).

Page 16 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 (d)residents Abefore residents’the councilgoverning shallbody adoptof its own bylaws and governance documents subject to the voteprovider andas approvaldescribed ofin thes. residents.

651.085(2).

(d) A residents’ council shall adopt its own bylaws and governance documents subject to the vote and approval of the residents.

(f) Present grievances and recommend changes in policies, procedures, and services to the staff of the facility, governing officials, or any other person without restraint, interference, Page 1716 of 2422 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 procedures, and services to the staff of the facility, governing officials, or any other person without restraint, interference, coercion, discrimination, or reprisal.

A designated resident representativePage shall17 performof his22 orCODING: her duties in good faith.

For a provider that owns or operates more than one facility in Page 18 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 thisrepresentative state,shall eachperform facilityhis mustor haveher itsduties ownin designatedgood residentfaith. representative.

For a provider that owns or operates more than one facility in this state, each facility must have its own designated resident representative.

requirement of full disclosure.— (2)Page Every18 continuingof care22 facilityCODING: shall:

(e) Provide a copy of the final examination report and Page 19 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 corrective(2) actionEvery plan,continuing ifcare onefacility isshall: required by the office, to the executive officer of the governing body of the provider and the president or chair of the residents’ council within 60 days after issuance of the report.

(e) Provide a copy of the final examination report and corrective action plan, if one is required by the office, to the executive officer of the governing body of the provider and the president or chair of the residents’ council within 60 days after issuance of the report.

651.105 Examination.— (1)(a) The office may at any time, and shall at least once every 3 years, examine the business of any applicant for a certificate of authority and any provider engaged in the execution of care contracts or engaged in the performance of obligations under such contracts, in the same manner as is provided for the examination of insurance companies pursuant to ss.Page 19 of 22 CODING:

624.316 and 624.318.

For a provider as deemed accredited under s.

651.028, such examinations must take place at least Page 20 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 oncess. every 5 years.

The624.316 examination must cover the preceding 3 or 5 fiscal years of the provider, whichever is applicable, and must624.318. be commenced within 12 months after the end of the most recent fiscal year covered by the examination.

TheFor examinationa mayprovider includeas eventsdeemed subsequentaccredited tounder thes. end of the most recent fiscal year and the events of any prior period which affect the present financial condition of the provider.

As651.028, partsuch ofexaminations themust examination,take theplace officeat shallleast conductonce anevery interview5 inyears. person, telephonically, or through electronic communication with the current president or chair of the residents’ council, or another designated officer of the council if the president or chair is not available.

An examination covering the preceding 3 or 5 fiscal years of the provider, as applicable, must be commenced within 12 months after the end of the most recent fiscal year covered by the examination.

Such examination may include events subsequent to the end of the most recent fiscal year and the events of any prior period which relate to possible violations of this chapter or which affect the present financial condition of the provider.

At least once every 3 or 5 fiscal years, as applicable, the office shall conduct an interview in person, telephonically, or through electronic communication with the current president or chair of the residents’ council, or another designated officer of the council if the president or chair is not available, as part of the examination process.

The representative or examiner designated by the office may at any time examine the records and affairs and inspect the physical property of any provider, whether in connection with a formal examination or not.Page 20 of 22 CODING:

(6) A representative of the provider must give a copy of the final examination report and corrective action plan, if one Page 21 of 24 CODING:

Florida Senate - 2023 CS for SB 622 4-00524A-23597-03561-23 2023622__2023622c1 isnot. required by the office, to the executive officer of the governing body of the provider within 60 days after issuance of the report.

(6) A representative of the provider must give a copy of the final examination report and corrective action plan, if one is required by the office, to the executive officer of the governing body of the provider within 60 days after issuance of the report.

SubsectionSection (7)651.012, of section 651.118, Florida Statutes, is amended to read:

651.118 Agency for Health Care Administration;

certificates of need;

sheltered beds;

community beds.— (7) Notwithstanding subsection (2), at the discretion of the provider, sheltered nursing home beds may be used for persons who are not residents of the continuing care facility and who are not parties to a continuing care contract for up to 5 years after the date of issuance of the initial nursing home license.

A provider whose 5-year period has expired or is expiring may request an extension from the Agency for Health Care Administration, not to exceed 30 percent of the total sheltered nursing home beds or 30 sheltered beds, whichever is greater, if the utilization by residents of the nursing home facility in the sheltered beds will not generate sufficient income to cover nursing home facility expenses, as evidenced by one of the following:

(a) The nursing home facility has a net loss for the most recent fiscal year as determined under generally accepted accounting principles, excluding the effects of extraordinary or unusual items, as demonstrated in the most recently audited financial statement.

(b) The nursing home facility would have had a pro forma loss for the most recent fiscal year, excluding the effects of extraordinary or unusual items, if revenues were reduced by the amount of revenues from persons in sheltered beds who were not Page 22 of 24 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ residents, as reported by a certified public accountant.

The Agency for Health Care Administration may grant an extension to the provider based on the evidence required in this subsection.

The Agency for Health Care Administration may request a continuing care facility to use up to 25 percent of the patient days generated by new admissions of nonresidents during the extension period to serve Medicaid recipients for those beds authorized for extended use if there is a demonstrated need in the respective service area and if funds are available.

A provider who obtains an extension is prohibited from applying for additional sheltered beds under subsection (2), unless additional residential units are built or the provider can demonstrate need by continuing care facility residents to the Agency for Health Care Administration.

The 5- year limit does not apply to sheltered beds designated for post- acute care as part of a contractual agreement with a health care delivery system with at least one facility licensed under chapter 395 or up to five sheltered beds designated for inpatient hospice care as part of a contractual arrangement with a hospice licensed under part IV of chapter 400.

A continuing care facility that uses such beds after the 5-year period shall report such use to the Agency for Health Care Administration.

For purposes of this subsection, “resident” means a person who, upon admission to the continuing care facility, initially resides in a part of the continuing care facility not licensed under part II of chapter 400, or who contracts for continuing care at-home.

Section 14.

Section 651.012, Florida Statutes, is amended Page 23 of 24 CODING:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2023 SB 622 4-00524A-23 2023622__ to read:

Section 15.14.

651.011(25) at the end of any fiscal quarter, thePage provider21 shall submit to the office, at the same time as the quarterly statement, an explanation of the22 circumstancesCODING: and a description of the actions it will take to meet the requirements.

SectionWords 16.stricken are deletions;

words underlined are additions.

Florida Senate - 2023 CS for SB 622 597-03561-23 2023622c1 the provider shall submit to the office, at the same time as the quarterly statement, an explanation of the circumstances and a description of the actions it will take to meet the requirements.

Section 15.

Page 2422 of 2422 CODING: