Few will argue that Florida is a mecca for the elderly. Warm climate, medical facilities that specialize in ailments of the elderly and no state income tax make Florida an attractive retirement destination. Whether it would be house or condominium, many start early with a second home and transition to full time residence when income tax and other burdens of their “home state” grow in significance.
What could be better to the new retiree than a Florida life of fishing, golfing, year round outdoor activities and avoiding the northern state tax collector? The idyllic Florida life may come to an end with advancing age or infirmity. Residence in an assisted living facility may be an attractive option. Who knew the transition from condo or house to assisted living could be so complicated? And, for many, investigation and the decision to contract comes at a time of both declining physical and mental ability.
Florida recognizes the need to regulate the elder care and assisted living industry. Many of the statutory requirements are in Chapters 429 (Assisted Care Communities) and 651 (Continuing Care Contracts) of Florida Statutes. Even the statutes are complicated, as Florida has no less than four different types of licenses for levels of care.
Most potential residents (or their family) visit a facility and meet with sales people from the facility as part of their investigation. Sales people are sales people, and most present a glowing picture of future life for the potential resident. One of the things sales people may not explain, is that onsite amenities may not be the key to a healthy, comfortable residence. Paint, carpet and flowers are cheap compared to top level care and staff to resident ratio. One recent survey indicated over 80% of assisted living residents are for profit operations and one of the easiest ways to increase profit is to decrease personnel cost. Many states offer official guides for prospective residents to investigate assisted living facilities (not Florida) and those guides include staff to resident ratio as a very important consideration.
Once a decision is made that a particular community is “the one,” a prospective resident is asked to sign a contract. The contracts we have reviewed for assisted living facilities (ALFs) are often more than 40 pages long and come with a bundle of other disclosures, releases, medical information and other forms that make the package overwhelming.
Florida’s legislature recognizes that potential residents of an ALF meet with sales people who are paid to sign them up. To provide some protection for the consumer, Section 651.055 Florida Statutes requires each continuing care contract be submitted to and approved by the Florida Office of Insurance Regulation and include provisions mandated by statute. Mandatory provisions include a seven day right to rescind with full refund, clause that the contract may later be cancelled after the rescission period by giving at least 30 days written notice by either party and terms governing refund of any portion of the entrance fee. The statute even caps the percentage of the entrance fee which may be retained by the facility on a sliding scale based on time of occupancy and limits processing fees.
The seven day right of rescission gives consumers the opportunity to review the contract with an attorney and to terminate with refund of deposit. Many think they are properly equipped to read and understand contracts or do not want to pay an attorney for advice. Some of those later find that the contract included provisions that they did not understand and with which they are not happy after they move into the facility. Perhaps the biggest surprise to many residents is cost.
Virtually all ALF contracts provide for an entrance or admission fee (which is usually quite substantial) and thereafter a monthly service fee. Some include a meal allowance in the dining room and a list of other services. That wonderful list of amenities and services often turns out to be a la carte. Virtually all contracts include a provision allowing the facility to increase fees and charges by giving the resident notice. Even the scope and type of services provided or available can be changed under most contracts with notice to the resident. That means both prices and services are subject to change, as determined by the ALF.
Unavailability of service is not generally the problem with more advanced care options offered by ALFs. Most advance care options are often an important part in choosing the facility, since aging residents may hope for the best but plan for the worst. They are happy to know that if their need for help increases, it will be available onsite and they will not have to move. But, ailing residents have been referred to as “cash cows” by some commentators. Extra fees when health begins to decline can include administration of medication, support, nursing services and even a 24 hour care giver, if the facility deems it necessary. The contract between resident and facility usually includes a requirement that the resident pay for all these services, even when determination of need is delegated to the facility.
Delegation of need determination can seem innocuous when the resident is in good health, and may even be reassuring. It can become a problem when health or mental ability deteriorates. Many of those contracts include the assuring language that a forced move to a more advanced care portion of the facility (i.e. memory care or dementia) will not be done without consulting with the resident, the resident’s physician and the facility’s medical staff. Those same contracts usually go on to provide that decision of the facility will be final and binding. If the facility’s medical staff determines the resident lacks mental capacity to make decisions, the resident may be hard pressed to get out, even with a 30 day cancellation clause in the contract for care. That can be a particular problem when the resident has no one outside of the facility to advocate for the resident.
A lot of due diligence is appropriate when investigating assisted living facilities. Although Florida Statutes mandate contracts for continuing care be approved by the State, those contracts can include provisions which allow the facility to change services and prices. Many contracts appoint the facility’s medical director to make ultimate decision concerning service and living arrangements for the resident. Even the price in the contract may be illusory, as the resident may find many desired services and amenities are only available at extra cost.
Contracts are normally intended to bind both buyer and seller. In the assisted living facility arena, the contract is only binding until the facility decides to change it.
William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice.