84R7418 LED-F
By: Galindo, et al. H.B. No. 2697
A BILL TO BE ENTITLED
AN ACT
relating to services provided by continuing care facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 246.002(3), Health and Safety Code, is
redesignated as Section 246.0025, Health and Safety Code, and
amended to read as follows:
Sec. 246.0025. DEFINITION OF CONTINUING CARE. (a) In this
chapter, "continuing [(3) "Continuing] care" means the furnishing
of a living unit, together with personal care services, nursing
services, medical services, or other health-related services,
regardless of whether the services and the living unit are provided
at the same location:
(1) [(A)] to an individual who is not related by
consanguinity or affinity, as determined under Chapter 573,
Government Code, to the person furnishing the care; and
(2) [(B)] under a continuing care contract.
(b) The term "continuing care" includes the furnishing of
services described by Subsection (a) to an individual in the
individual's residence or otherwise enabling the individual to
remain in the individual's residence.
SECTION 2. Sections 246.002(5), (6), (10), and (12), Health
and Safety Code, are amended to read as follows:
(5) "Entrance fee" means an initial or deferred
transfer of money or other property valued at an amount exceeding
three months' payments for rent or services, made, or promised to be
made, as full or partial consideration for acceptance by a provider
of a specified individual entitled to receive continuing care under
a continuing care contract [as a resident]. The term does not
include a deposit made under a reservation agreement.
(6) "Facility" means an establishment that [a place in
which a person] provides continuing care to an individual. The term
does not include an individual's residence if the residence is not a
living unit provided by a provider.
(10) "Provider" means a person who undertakes to
provide continuing care under a continuing care contract to a
resident [in a facility].
(12) "Resident" means an individual entitled to
receive continuing care under this chapter [in a facility].
SECTION 3. Section 246.041(a), Health and Safety Code, is
amended to read as follows:
(a) A provider shall file with the board a current
disclosure statement that meets the requirements of this subchapter
and shall file copies of the agreements establishing the escrows
under Subchapter D or a verified statement explaining that an
escrow is not required before the provider:
(1) contracts to provide continuing care to a resident
[in a facility located or to be located] in this state;
(2) extends the term of an existing continuing care
contract with a resident [in a facility that is located or to be
located] in this state [and] that requires or allows an entrance fee
from any person, regardless of whether the extended contract
requires an entrance fee; or
(3) including a person acting on the provider's
behalf, solicits for an individual who is a resident of this state a
continuing care contract in this state.
SECTION 4. Section 246.048, Health and Safety Code, is
amended to read as follows:
Sec. 246.048. CONTENTS OF DISCLOSURE STATEMENT: CONTRACTS
AND FEES. The disclosure statement must describe:
(1) the services provided [at the facility] under a
continuing care contract, including:
(A) the extent to which medical care is
furnished; and
(B) those services that are included for
specified basic fees for continuing care and those services that
are made available at extra charge;
(2) all fees required of residents, including the
entrance fee and any periodic charges;
(3) the conditions under which a continuing care
contract [at the facility] may be canceled by the provider or the
resident;
(4) any conditions under which all or part of the
entrance fee is refundable on cancellation of the contract by the
provider or the resident, or by the death of the resident before or
during the occupancy of a living unit or otherwise before or during
the term of the contract; and
(5) the manner by which the provider may adjust
periodic charges or other recurring fees and any limitations on
those adjustments.
SECTION 5. Section 246.049, Health and Safety Code, is
amended to read as follows:
Sec. 246.049. CONTENTS OF DISCLOSURE STATEMENT: CHANGE OF
CIRCUMSTANCES. The disclosure statement for a continuing care
contract to provide continuing care in a living unit of a facility
must state:
(1) the policy of the facility regarding changes in
the number of people residing in a living unit because of marriage
or other relationships;
(2) the policy of the facility relating to the
admission of a spouse to the facility and the consequences if the
spouse does not meet the requirements for admission;
(3) the conditions under which a living unit occupied
by a resident may be made available by the facility to a different
resident other than on the death of the previous resident; and
(4) the health and financial conditions required for
acceptance as a resident and for continuation as a resident,
including the effect of any change in the health or financial
condition of an individual between the date of the continuing care
contract and the date on which the individual initially occupies a
living unit.
SECTION 6. Section 246.050(a), Health and Safety Code, is
amended to read as follows:
(a) The disclosure statement must:
(1) describe any provisions made or to be made to
provide reserve funding or security to enable the provider to fully
perform its obligations under a continuing care contract [at a
facility], including:
(A) the establishment of escrow accounts,
trusts, or reserve funds and the manner in which those funds will be
invested; and
(B) the name and experience of any individual in
the direct employment of the provider who will make the investment
decisions; and
(2) provide financial statements of the provider,
including:
(A) a balance sheet as of the end of the most
recent fiscal year; and
(B) income statements and a statement of cash
flow for each of the three most recent fiscal years that the
provider has been in existence.
SECTION 7. Section 246.056(b), Health and Safety Code, is
amended to read as follows:
(b) A resident who executes a continuing care contract to
provide continuing care in a living unit of a facility may not be
required to move into the facility before the expiration of the
period during which the contract may be rescinded.
SECTION 8. Section 246.057(a), Health and Safety Code, is
amended to read as follows:
(a) A continuing care contract to provide continuing care in
a living unit in a facility is canceled if the resident:
(1) dies before occupying a living unit in the
facility; or
(2) is precluded under the terms of the contract from
occupying a living unit in the facility because of illness, injury,
or incapacity.
SECTION 9. Subchapter D, Chapter 246, Health and Safety
Code, is amended by adding Section 246.0737 to read as follows:
Sec. 246.0737. CARE IN RESIDENCE. The commissioner by rule
shall establish requirements for escrow release different from
those under Section 246.073 for money received as an entrance fee in
connection with a continuing care contract in circumstances in
which a living unit is not furnished to the resident.
SECTION 10. Section 246.111(a), Health and Safety Code, is
amended to read as follows:
(a) To secure the obligations of the provider under any
continuing care contract, a lien attaches on the date a resident
first occupies a facility or receives services under a continuing
care contract. The lien covers the real and personal property of the
provider located at the facility. The provider shall prepare a
written notice sworn to by an officer of the provider for each
county where the provider has a facility. The notice must contain
the name of the provider, the legal description of each facility of
the provider, and a statement that the facility is subject to this
chapter and the lien provided by this section. The provider shall
file for record the notice in the real property records of each
county where the provider has a facility on or before the later of
January 1, 1994, or the date of the execution of the first
continuing care contract relating to the facility.
SECTION 11. Not later than December 1, 2015, the
commissioner of insurance shall adopt rules necessary to implement
the changes in law made by this Act.
SECTION 12. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2015.