Analysis

Topic: Assisted Living
Sponsor: Representative Scranton
Date Introduced: February 13, 2001
Date Ordered Enrolled: May 22, 2002
Date of Analysis: May 23, 2002

Position: The Department of Consumer and Industry Services supports the bill.

Background: Assisted living is growing in popularity with elderly citizens. In an assisted living facility each resident has a private apartment and access to a broad range of personal and medical services ranging from help in getting dressed to assistance in taking medications. By offering physical protection while maintaining personal privacy and independence these facilities provide an attractive alternative to more traditional long-term care options, like homes for the aged and nursing homes.

Assisted living emerged in Michigan's housing/long-term care marketplace in the 1980's. Unlike Oregon, which also developed assisted living facilities in the 1980's, the development of assisted living facilities in Michigan has not yet been accompanied by a decrease in use of more traditional residential settings for the elderly. Michigan's nursing home population has continued to grow slowly, and the use of adult foster care has increased significantly.

Enrolled House Bill 4217 is based on a model used in Minnesota. However, Minnesota's law required registration of the establishments, whereas the bill does not. The enrolled bill also differs from Minnesota's law in other respects, including the lack of a provision defining these facilities as primarily serving elderly residents. The original bill did contain a provision stating that at least 80% of the residents must be 55 years of age or older, but this was deleted at the request of the department.

Bill Content: The bill defines a housing-with-services establishment as a facility regularly providing or offering to provide leased private residences accommodating 1 or more adult residents and providing or offering to provide for a fee either of the following:

- 1 or more regularly scheduled health-related services.
- 2 or more regularly scheduled supportive services.

The services provided may be offered directly by the establishment or by another person by arrangement of the establishment. Housing-with-services establishment does not include a licensed adult foster care facility or a health facility or agency licensed under the Public Health Code.

An establishment shall not function as a housing-with-services establishment for an individual except pursuant to a written contract. The written contract must include at least all of the following:

- Name, street address and mailing address of the establishment.
- The owner's name and mailing address. If ownership is other than by individuals, the contract must also identify the type of ownership and the names of primary officers and directors.
- The title and address of the managing agent, whether an owner of a management firm or agency.
- The title and address of at least 1 individual authorized to accept service of process on behalf of the owner or managing agent.
- A statement describing whether the establishment or a provider of services is regulated by a local, state, or federal agency.
- The term of the contract.
- A description of the services the establishment will provide to the resident for the base-rate charged the resident.
- A description of additional services available for an additional fee.
- A statement regarding the policy of the establishment regarding outside contracting of services by a resident.
- Fee schedules for additional services.
- A description of the process through which the contract may be modified, amended, or terminated.
- A description of the establishment's complaint resolution process.
- The name of the resident's designated representative, if any.
- The establishment's referral procedure in the event the contract is terminated.
- Billing and payment procedures and requirements.

The establishment is required to retain contracts and related documents for at least 3 years after the date of termination of the contract. The establishment is required to keep contracts for current residents on site.

An establishment is required to comply with applicable state and local codes.

The proposed act does not mandate a minimum core of services or a specific number of residents. There are no physical plant or establishment specifications as long as code compliance is maintained. Nothing in the bill limits a person's rights or responsibilities under any other applicable state housing or renting act.

A contract executed in violation of the act's requirements is voidable at the option of the resident. However, a resident may not void a contract in order to avoid a payment obligation if the contract has been executed pursuant to the act.

Nothing in the act limits a facility's responsibilities or obligations to be licensed under the Adult Foster Care Licensing Act or Article 17 of the Public Health Code.

Arguments For: State regulation is unnecessary for individuals living independently in assisted living facilities and might hinder the development of a promising alternative to traditional elderly care arrangements. However, there is a need to provide a contractual framework to assure protection of residents of these facilities, who tend to be elderly and may therefore be more vulnerable to scams and fraudulent practices than the average apartment resident.

Many senior citizens, including some of those currently living in nursing homes, have the capability of living independently. The bill will promote the development of assisted living alternatives for these individuals.

Arguments Against: There is a need for more regulation of assisted living than the bill provides. Even the Minnesota law, upon which the bill is based, requires registration of facilities. The bill originally introduced by Representative Scranton in 1999 contained more consumer protections than the current bill.

Supporters/Opponents: The Michigan Assisted Living Association, the Michigan Center for Assisted Living, the American Association of Retired Persons (AARP Michigan), the Michigan Health and Hospital Association, and the Health Care Association of Michigan support the bill. There was no opposition expressed during legislative consideration of the bill.

Fiscal Information: The bill will have no effect on state revenues or expenditures.

Administrative Rule Impact: No new or revised administrative rules will be required as a result of the bill.