§ 8005. Continuing care contracts

(a) A continuing care contract shall be in writing and shall contain at a minimum the provisions required in subsection (d) of this section.

(b) All contract forms and the form of any attachments, addenda, or attachments by reference shall be filed with, and approved by, the Commissioner prior to use by the provider. The Commissioner shall have the authority to require disclosure of contract provisions and omissions in the contract. The Commissioner shall have the same authority and be subject to the same procedures in approving contracts under this section as provided for approving applications under subsections 8002(c) and (d) of this title. A single contract form may be used for several types of plans offered by the provider, as long as the Commissioner determines that the use of such forms will not have the tendency to be confusing.

(c) All text in contract forms, except as provided in subdivision (d)(14) of this section, shall be printed in a type the size of which shall be uniform and not less than 10-point.

(d) The contract shall include at least the following provisions:

(1) Termination rights. A statement of the resident‘s termination rights under section 8006 of this title.

(2) Living unit. A description of the particular living unit the resident will occupy.

(3) Fees. A listing of all fees and the amounts that are required to be paid by the resident, including processing fees, entrance fees or portion thereof, and periodic fees if any. A statement of the values of all properties, if any, subject to transfer under the contract to the provider shall be included.

(4) Fee adjustments. A statement of the bases upon which periodic fees may be adjusted. The contract shall provide that the resident will be notified at least 60 days in advance of any change in scope or price of any component of care or service.

(5) Effect of civil marriage. A statement relating to the civil marriage of a resident, of fee changes, terms affecting entry of a spouse to the facility, and consequences if the spouse does not meet entry requirements.

(6) Occupancy date. An occupancy date shall be specified; however, a provider shall not require a resident to move into the facility on a date that is less than 30 days after the date on which the contract is executed. For facilities under development, the occupancy date may be estimated.

(7) Charges. A listing of all services to which the resident is entitled without additional charge. The contract shall clearly specify any additional services available at the facility for which additional charges will be made, the extent to which nursing care is provided, and the charges for that care. Services such as additional meals, personal care, medical care, drugs, and burial, which a resident might reasonably expect to be included in the contract but which are not covered under the contract, shall be specified.

(8) Failure to pay. A statement describing whether, and under what circumstances, the resident shall be permitted to remain at the facility in the event he or she is unable to pay periodic or other charges according to the contract and a statement describing eligibility for participation in the resident assistance fund.

(9) Transfers. A statement explaining the conditions under which a resident may be transferred from the resident’s living unit and the conditions governing reoccupancy of that unit; any financial adjustment to be made in the case of a resident who permanently transfers to another unit in the facility providing a different level of care, or to a hospital and who permanently gives up the resident’s living unit; whether the provider has any responsibility to provide services following care in another facility; whether a refund will be due if the resident vacates the resident’s living unit and the provider will not permit reoccupancy by the resident.

(10) Death, divorce, or transfer of spouse. In instances where the living unit is shared, the options available to a resident upon the death, divorce, or transfer of a resident spouse shall be listed. The contract shall specify how each option affects the monthly rate. The contract shall also specify the options available to a person if his or her spouse dies prior to occupancy of a unit. No resident shall be required to move to another living unit because of the death or transfer of a second resident occupying the same living unit.

(11) Preexisting conditions. A statement of any limitations on the provider’s responsibility for costs associated with the treatment or medication of an ailment or illness existing prior to the date of occupancy. In such case, the medical or surgical exceptions shall be listed in the contract.

(12) Absence from facility. A statement explaining whether any reimbursement is to be made by the provider for the support, maintenance, board, or lodging supplied to a resident who requires medical attention while absent from the facility. The contract shall designate any credit or allowance a resident will receive when absent from the facility for an extended period of time.

(13) Interest in assets. A statement of the resident’s proprietary interest in the assets of the facility, if any.

(14) Refunds. A statement, in clear and understandable language, in print no smaller than the largest used in the body of the agreement, highlighted by boldface, underlining, or one size larger type, of the terms governing a refund of any portion of the entrance fee and periodic fees.

(e) The contract may include the following provisions:

(1) a clause restricting transfer or assignment of a resident’s rights and privileges under the contract;

(2) a clause permitting the provider, in the event the resident breaches the contract, to waive the breach without relinquishing the provider’s right to insist that the resident comply with the remaining terms of the contract;

(3) a clause requiring that the resident reimburse the provider for any loss or damage beyond normal wear and tear suffered by the provider as the result of carelessness or negligence on the part of the resident; and

(4) a clause providing for subrogation of any cause of action a resident might have as a result of injuries sustained by a resident due to the negligence of a third party, and for a lien on any judgment, settlement, or recovery, for any additional expense incurred by the provider in caring for the resident as a result of such injury, and requiring the cooperation of the resident in assisting the diligent prosecution of any claim or action against such third party.

(f) The contract shall not contain any language purporting to absolve the provider from liability for negligence. (Added 1987, No. 247 (Adj. Sess.), § 1; amended 2023, No. 6, § 72, eff. July 1, 2023.)