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HUD LOAN CHANGES EASES AR FINANCING FOR SNF PROVIDERS

Recent changes in the language in the AR Agreements reduce confusion, clarify ambiguous statements, and speeds up the process which benefits the SNF provider in acquiring AR financing.  The earlier version of the agreement left many deals on hold because of the lack of clarity which discouraged many AR Lenders from making a commitment.  The good news is that the new language in the agreement gives providers a much better chance of obtaining AR financing.  The changes are open for public comment.  However, HUD is allowing deals to close before the end of the comment period if both parties agree to and accept the terms of the new wording.

HUD 232 CHANGES:

DEFINITION OF AR LOAN OBLIGATION   Excluded many restrictions. The new definition takes a Broad approach which requires AR Loan obligations to be directly related to the benefit of the facility.

CLARIFICATION OF EVENTS THAT TRIGGER A “CUT-OFF” By eliminating many of the reasons that would cause HUD to subordinate its interest in the AR of the provider,   the new agreement states that only defaults to the AR loan can cause the AR Lender to cease funding and trigger a cut-off time.

CLARIFICATION OF HUD AND FHA LENDER’S NOTICE AND CONSENT RIGHTS New agreement addresses specific scenarios that have caused problems in the old agreement. The new agreement makes it clear that AR advances that are over the agreed upon maximum commitment amount, but over the borrowing base formula, only require notice and not consent from the FHA Lender or HUD.

MODIFICATIONS WITHOUT CONSENT   The new agreement clarifies what modifications can be made to the AR loan documents without HUD’s consent or the consent of the FHA Lender.

These changes are significant and will make it easier for Skilled Nursing providers as well as the full spectrum of Senior Living providers to secure AR financing, a blessing for the Senior Housing Industry in this economy where demand is greater than the supply.

Tech-Savvy Seniors Demand Assisted Living Communities Keep Up With The Times

Demand driven providers are finding that no longer does a computer lab satisfy the requirement of tech-savvy residents.  Technology progresses so rapidly that many in their 70s, 80s and 90s in their own homes are accustomed to the latest technology.  They expect the same environment when they choose an Independent Living, Assisted Living or CCRC.  The affluent and technologically experienced Baby boomer generation is expected to be even more demanding.

Computer labs and business centers in senior housing communities are less important to senior living prospects today than they were two years ago according to Ziller Senior Marketing agency.  The growing number of seniors using mobile devices and going online antiquates the “computer room”.  Today’s senior goes on line every day, checks their email, uses an e-reader and an IPad.  Accustomed to having access to the world in their own home, they naturally seek the same environment in an Independent, Assisted Living or any type of Healthcare Facility.

THE NEW REALTY, WIFI IS A MUST

Senior communities that have upgraded their facilities to accommodate greater internet access by offering Wi-Fi have attracted the tech-savvy resident.  For example Texas-based Morningside Ministries offering Wi-Fi found that it was vastly important to resident satisfaction.  Morningside began to install Wi-Fi to all of its campuses and continues to add Wi-Fi to its buildings undergoing redevelopment and its cottage properties.  Residents use technology to check bank accounts, investments, retirement accounts, order products, print maps to travel, access books for their e-readers, or to access social media like Facebook.  Almost all use the technology to stay in touch with family members by e-mail.   Keeping up with the times, Emeritus, whose $2.8 billion merger with Brookdale Senior Living forms the largest senior living provider in the nation, has transformed common areas into Internet cafes.

THE NEW REALTY CREATES THE NEED FOR TECH-PARTNERS AND TECH SUPPORT

Implementing and improving technology in existing senior communities and in new development to   KEEP WITH THE TIMES it becomes necessary to have a tech partner and engage a staff tech support person. Only 40% of senior housing organizations have somebody who is head of technology.   Engaging with tech partners in the early stages of a development can refine the plan and design in the construction process to get the most out of the technological services.   Creating a position for a tech support staff member will ultimately help senior housing communities maximize their use of technology and their ability to provide technology services to all residents.

ONWARD AND UPWARD FOR A BETTER SENIOR WORLD THAT KEEPS UP WITH THE TIME!

RFCE Reform Act 2014 Part 2

Senior Housing for Sale

Throughout March and April 2014, the bills that comprise the RCFE Reform Act were heard for the first time by legislative committees. The bills in the act are designed to protect the health, safety, and security of the Residential Care Facilities for the Elderly (RCFE). There are twelve bills within the act, and if passed, will cause a serious, direct impact in the RCFE community in California and a potentially far reaching impact on neighboring states such as Oregon, Nevada, Arizona and even Washington, Idaho, Colorado. Over time, this could ripple all the way down to Texas and to the east coast in Florida. The accompaniment bills are as follows:

AB 2236 (Stone and Mainschein) Increased Penalties for Violations

Currently, the maximum penalty for violation of RCFE laws and regulations in California is $150, even if the violation results in the death of a resident. AB 2236 would give new, stiffer minimum and maximum penalties, allocating fifty percent of all revenue gathered from these civil penalties to go toward an emergency fund for the relocation of residents in the instances of revoked or suspended licenses.

AB 1554 (Skinner) Responding to Consumer Complaints

Until now, the CCL did not have an effective method of investigating complaints filed by residents of RCFEs. AB1554 would require California’s CCL to investigate complaints in a timely fashion and provide written notice of the investigation and findings.

AB 1571 (Eggman) Consumer Information System

AB 1571 would require the DSS and CCL to set up an online information system listing accurate, updated information about many issues.

  • Licenses
  • Ownership
  • Surveys
  • Complaints
  • Enforcement information

If passed, this bill must be implemented by 2019. Also, owners of RCFEs would have to disclose any previous ownership of a similar facility in California and other states such as Oregon, Idaho, and Utah. A history of non-compliance or compliance will also be recorded on the online information system.

AB 1572 (Eggman) Resident & Family Councils

Currently, resident care facilities for the elderly in California have no obligation to inform residents and their families or representatives of their right to form a Resident or Family Council. If the bill is passed, potential buyers of residential care homes currently for sale in California will be required to inform residents and family members of their right to form councils and peer support groups.

AB 1523 (Atkins) RCFE Liability Insurance

If passed, AB 1523 will require all RCFEs in California to obtain and maintain liability insurance as a condition to licensure. This would set precedence for other states such as Texas and Florida.

What This Means for You

Overall, these changes are necessary and a step in the right direction for RCFE reform. Unfortunately, many facilities may be forced to sell their residential care facility due to inadequate funds to cover new fees and penalties incurred. For more information about how these bills may affect you in your state, please talk to an informed brokerage who is knowledgable in the healthcare industry and is dedicated to the well being of the Senior population.

RFCE Reform Act 2014 Part 1

RCFE Reform 2014

Throughout March and April 2014, the bills that comprise the RCFE Reform Act were heard for the first time by legislative committees. The bills in the act are designed to protect the health, safety, and security of the Residential Care Facilities for the Elderly (RCFE). There are twelve bills within the act, and if passed, will cause a serious, direct impact in the RCFE community in California and a potentially far reaching impact on neighboring states such as Oregon, Nevada, Arizona and even Washington, Idaho, Colorado. Over time, this could ripple all the way down to Texas and to the east coast in Florida. The bills are as follows:

SB 894 (Corbett) RCFE Suspension/Revocation of Licenses

Up to this point, the suspension and revocation laws for RCFE licenses have been too vague. This is leaving the Department of Social Services (DSS) unable to adequately protect the health and safety of elder and dependent adults living in residential care facilities whose licenses have been suspended or revoked. If passed, SB 894 strengthens the obligations of the DSS and said licensee and includes adequate relocation timelines for the safety of the residents.

SB 895 (Corbett) Inspections/Evaluations of RCFEs

Evaluations of RCFEs are crucial to ensure proper laws and procedures are being followed daily. Unfortunately, in 2004, California’s Community Care Licensing Division (CCL) started checking facilities only once every five years. They had trouble maintaining even this schedule. If passed, SB 895 would require the CCL to comprehensively check all RCFEs at least annually, unannounced.

According to the latest report from The National Center for Assisted Living, many of the facilities in operation today will not meet the state-mandated requirements for staffing levels and quality care. As a potential result, many assisted living facilities might find themselves up for sale if their licenses are revoked due to neglect and abuse issues that have surfaced during the long gaps in CCL inspections.

SB 911 (Block) Training and Qualifications of RCFE Staff

SB 911 would strengthen the training requirements and qualifications for all RCFE staff and for staff that work directly with at-risk residents. Currently, these standards are woefully inadequate, requiring little more than a GED and between four and forty hours of mandatory training, with six to forty hours of annual training.

SB 1153 (Leno) Ban on Admissions

SB 1153 would impose penalties for non-compliance of RCFE laws and procedures. This bill would authorize DSS to suspend the admission of new residents until complaints can be proved.

What This Means for You

Overall, these changes are necessary and a step in the right direction for RCFE reform. Unfortunately, many facilities may be forced to sell their residential care facility due to inadequate funds to cover new fees and penalties incurred as a result. For more information about how these bills may affect you in your state, please talk to a brokerage firm who is knowledgable in the healthcare industry and who is dedicated to the improvement of Senior Care.