March 17, 2023, was the transition period deadline for full state compliance with the Home and Community-Based Services (“HCBS”) Final Regulation.
As part of the steps to get ready for this deadline, in late 2022, the Centers for Medicare & Medicaid Services (“CMS”) visited several settings in multiple states that were identified by the state and/or stakeholders as having the qualities of an institution as outlined at 42 CFR § 441.301(c)(5) and required a CMS-conducted heightened scrutiny review to determine if they comply with the HCBS settings criteria at 42 CFR § 441.301(c)(4).
HCBS Rules
Among the many concerns identified by CMS in these multiple site visits were issues related to the residency agreements and the regulatory criteria in 42 CFR § 441.301(c)(4):
The unit or dwelling is a specific physical place that can be owned, rented, or occupied under a legally enforceable agreement by the individual receiving services, and the individual has, at a minimum, the same responsibilities and protections from eviction that tenants have under the landlord/tenant law of the State, county, city or other designated entity. For settings in which landlord-tenant laws do not apply, the State must ensure that a lease, residency agreement or other form of written agreement will be in place for each HCBS participant and that the document provides protections that address eviction processes and appeals comparable to those provided under the jurisdiction’s landlord-tenant law.
CMS Concerns
Among these concerns, CMS found:
- Resident Handbook Issues. One setting did not differentiate between assisted living and skilled nursing facility residents, which presents challenges when reviewing residency agreements and resident handbooks. For example, one resident handbook noted that “daily rates will be charged to hold a bed vacant” if a resident leaves for an extended period of time. Since the handbook did not differentiate between assisted living and skilled nursing facility residents, CMS could not discern if this requirement applied to both types of residents.
- Contract/Residency Agreement. One facility had a “Daily Care Contract” that was used as the residency agreement. The contract included requirements for renter’s insurance and residents providing their own transportation to off-site medical care. There were no provisions for resident protections from eviction, notice, or appeals. In one case, the agreement was a one-page document and did not provide protections that would typically be enforced by local landlord-tenant law including protections and appeals around eviction processes. In another, the agreement did not contain appeal processes and protections against evictions as required.
- Landlord-Tenant Rules. CMS found that almost all of the agreements it reviewed should be revised to ensure each is a legally enforceable agreement that provides comparable protections against eviction as those provided under landlord/tenant law.
- Eviction/Appeal Rights. CMS found certain residency agreements to be vague on eviction protections and appeal rights for the residents. In others, CMS found that residency agreements heavily favored the provider as landlord with many opportunities for them to immediately discharge the resident. As an example, one residency agreement provided that if the tenant wanted to break the residency agreement, the tenant needs to give 60 days’ notice, but if the landlord wanted to break the residency agreement, they only have to give 30 days’ notice.
Practical Takeaways and Key Next Actions
- All assisted living providers that participate in the HCBS waiver program should review their residency agreement and confirm that they comply with the HCBS regulations.
- All assisted living providers that participate in the HCBS waiver program should expect greater state scrutiny of the residency agreements and rights contained in such agreements.
If you have questions or would like additional information about this topic, please contact:
- Sean Fahey at (317) 977-1472 or sfahey@hallrender.com; or
- Your regular Hall Render attorney.
More information about Hall Render’s Post-Acute and Long-Term Care services can be found here.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
