News Throughout the Spectrum of Aging Services
Assisted Living Communities/Personal Care Homes
States Increasing Regulatory Requirements for Assisted Living, Report Says
States gradually are increasing their oversight of assisted living communities, according to a report released October 3rd by the National Center for Assisted Living. Seventeen states updated assisted living regulations, statutes and policies between June 2016 and June 2017, according to the 2017 edition of NCAL's "Assisted Living State Regulatory Review."
MIT: Assisted Living Innovation and Design to Flourish as U.S. Ages
Age-related demographic shifts could one day drive a radical transformation of how assisted living communities are designed and operated, according to a recent report from the Massachusetts Institute of Technology (MIT) Center for Real Estate. The latest census data shows the number of Americans age 65 or older is projected to be 83.7 million by 2050, according to the report, which was sponsored by financial holding company Capital One (NYSE: COF). The looming influx of seniors, sometimes called the"silver tsunami," is anticipated to expedite
Federally Assisted Housing (HUD-Subsidized)
202 Funding in Spotlight at Hearing
HUD Secretary Ben Carson, questioned about steep rent increases for older adults if HUD's rent reforms proposals are enacted, said that any older adult who "can't see a way out" should ask for an exemption from their housing provider. Issues raised at the October 12 House Financial Services Committee hearing ran the gamut, from hurricane relief in Puerto Rico to HUD's request to cut HUD funding 15% and eliminate the HOME and CDBG programs.
REAC Physical Inspection Clarifications
An updated REAC Compilation Bulletin for certified UPCS Inspectors has been issued for effect on October 2, 2017. The new bulletin incorporates more visual examples,
clarifications to procedures, and some troubling reversions in understanding on items like call-for-aid, and vegetation.
HUD Testing Housing Model that Could Delay Nursing Home Care
The Department of Housing and Urban Development is seeking stakeholder comments on its plan to test a supportive services model that aims to cut down on seniors' nursing home, hospital and emergency room utilization. HUD plans to collect health and wellness information from roughly 4,000 seniors living in 40 HUD-affiliated demonstration sites, the agency said in a notice posted Tuesday. The demonstration, announced earlier this year, will test the use of a full-time enhanced service coordinator and a part-time wellness nurse in communities in California, Illinois, Maryland, Massachusetts, Michigan, New Jersey and South
Home and Community Based Services
LeadingAge Submits Comments on Major CY2018 Home Health Rule Changes
The Centers for Medicare & Medicaid Services (CMS) released the proposed CY2018 prospective payment system (PPS) rate update that reduces overall spending and proposes the implementation of the home health groupings model (HHGM) in 2019. LeadingAge submitted comments on the major changes proposed in the regulation.
Home Health Care Spending Growth Outpaced All Other Sectors
Health care spending over the last year has remained modest in its growth—except for home health care, which saw more spending than any other sector. National health spending reached $3.51 trillion in August 2017, 4.3% higher than spending in the same month in 2016, according to Altarum's Center for Sustainable Health Spending from the Altarum Institute, a nonprofit health systems research and consulting organization. By comparison, gross domestic product (GDP) growth over the 12-month period ending August 2017 was 4.1%, with health spending accounting for 18% of GDP share.
Home Health Groupings Model Has a 50/50 Chance
The Home Health Groupings Model, originally proposed by the Centers for Medicare and Medicaid Services (CMS) in July, is looking more likely to become a final rule based on signs from the nation's capital, the National Association for Home Care and Hospice indicated October 16th. The chances of the groupings model being pulled or delayed by CMS are about 50/50, according to Bill Dombi, president of NAHC.
Top Lessons Irma, Harvey Taught Home Health Agencies
Preparation is key for any emergency, but it's just one half of the equation. As in-home care providers found out during recent hurricanes that battered Texas and Florida, putting the protocols into action is the true test. Here are some of the top lessons affected providers learned in the aftermath of Hurricanes Harvey and Irma:
Hospice Honeymoon with Regulations is Over
While the home health care industry has seen more and more regulations come through that pike, hospice may appear to be a bit more of a safe haven in post-acute care. However, increasing regulation pressures are likely to advance, according to Bill Dombi, president of the National Association for Home Care & Hospice (NAHC), and Alan Schabes, Esq. with Benesch, Friedlander, Coplan & Aronoff LLP, a health care law practice.
What to Expect in Hospice Care in 2018
Hospice care providers are in store for some big changes in 2018, including increasing quality reporting requirements and more data revelations on Hospice Compare. With ongoing shifts across the health care continuum, hospice providers need to be up to date on their data reporting requirements—and understand how their actions today can influence the rule making of tomorrow, according to Theresa Forster, vice president for hospice policy & programs at the National Association for Home Care & Hospice (NAHC), who spoke at the association's annual conference in Long Beach, California, last week.
Yale: Hospice Patients Are Admitted Too Late
Half of patients admitted into hospice care are admitted only within the last two weeks of their life, according to a recent study from Yale University physicians. This timeframe undercuts the hospice benefit, which can extend for six months, and reveals some of the challenges related to seniors in the last stage of their life.
Life Plan Community/CCRC
5-Year Study Aims to Prove Benefits of Life Plan Community Living
A five-year study of more than 2,000 life plan community residents by the Mather LifeWays Institute on Aging and Northwestern University will try to determine the effects that living in such a community has on residents' long-term health and wellness, the institute announced October 10th.
Can You Quantify the Benefits of Living in Your Life Plan Community?
We'd like to help you find out. Mather LifeWays and Northwestern University are conducting a landmark study that will determine the impact of living in a Life Plan Community on residents' long-term health and wellness. The Age Well Study will measure residents' self-reported health and wellness metrics through a convenient survey taken annually for five years. In return for participating, your organization will receive an annual report on key findings, such as quality of life, self-reported health, and other health-related measures.
This study is being conducted in partnership with ASHA, LeadingAge, Ziegler, National Investment Center, Life Care Services, and Novare. To learn more or to enroll your community in the study, visit Age Well Study or email firstname.lastname@example.org.
Revised Survey Procedure Guide
CMS has posted the revised Long Term Care Survey Procedure Guide (effective
November 28, 2017) on the CMS website under Downloads / LTCSP Procedure
Guide. Check it out today.
Chasing Millions in Medicaid Dollars, Hospitals Buy Up Nursing Homes
Westminster Village North, a nursing home and retirement community in Indianapolis, recently added 25 beds and two kitchens to speed food delivery to residents. It also redesigned patient rooms to ease wheelchair use and added Wi-Fi and flat-screen televisions. This fall, it's opening a new assisted living unit. "We have seen amazing changes and created a more home-like environment for our residents," said Shelley Rauch, executive director of the home. The nursing home can afford these multimillion-dollar improvements partly because it has, for the past five years, been collecting significantly higher reimbursement rates from Medicaid, the state-federal health insurance program for the poor. About half of its residents are covered by the program.
Nursing Home Nurses Feel Isolated from Rest of Healthcare Workforce, Study Suggests
Nurses working in the long-term care sector may feel isolated or excluded from other workers in the healthcare industry, new research suggests. The study, conducted by researchers at Northumbria University and the University of Cambridge, set out to gauge nursing home nurses' perceptions of their "work identities" and experiences within the sector.
Millennials Are Key to Solving Looming Nursing Shortage Millennials are breathing new life into the nursing industry even as baby boomers are retiring en masse. But home health care providers shouldn't feel total relief over the influx of younger nurses, as the demand continues to tick upward. An average millennial is now 186% more likely to become a registered nurse (RN) than the average baby boomer was, according to a new study published in the October edition of Health Affairs. The study is based on data from the U.S. Census Bureau's Current Population Survey for 1979 to 2000 and the American Community Survey for 2001 to 2015.
How to Protect Your Community from Inappropriate Use of Social Media Use by Employees Regulations may vary, and case law may be lacking, but senior living operators can take steps to reduce risk related to social media use by employees, according to Kristi Eldredge, RN, JD, CPHRM, senior patient safety consultant at medical liability insurance company MMIC. Eldredge discussed social media best practices in long-term care Wednesday in an educational session at the American Health Care Association / National Center for Assisted Living's 68th Annual Convention & Expo.
Emergency Preparedness Moving Forward, LeadingAge Tells Aging Committee LeadingAge's statement for the record of the Senate Aging Committee's hearing
on Disaster Preparedness and Response: The Special Needs of Older Americans pointed out the impending rule that will require all nursing homes to have disaster preparedness plans in place. They also urged the committee to consider the needs of senior housing residents and other older adults living independently in the community.
Applicable Provisions of House Tax Bill to 501c3 Borrowing
On Thursday, November 2, 2017, The House Committee on Ways and Means released its initial draft of the tax reform bill. The Bill, as currently written, has significant implications on the Municipal Bond Market in general, and on 501(c) 3 organizations in particular.
The proposed changes would become effective December 31, 2017 as currently written and will affect 501(c)3s in a variety of ways, but chiefly among them are several related, yet distinct, proposed provisions that would significantly alter both the way in which, and the rate at which 501(c)3s borrow.
Some of the key provisions and their possible effects are discussed below.
Provision: The Elimination of Private Activity Bonds (including 501(3)3 Public Bonds)
Effect: Increases Cost of Capital for 501(c)3 Borrowers
Private Activity Bonds ("PABs"), and more specifically a subset of PABs referred to as Qualified 501(c)3 Bonds, are the mechanism through which 501(c)3s borrow at lower rates than their for‐profit peers via tax‐exempt debt, consisting mostly of tax‐exempt fixed rate bonds and tax‐exempt bank loans.
The current House Bill proposes eliminating PABs, thereby shutting off access of 501(c)3s to financing at lower interest rates. This would eliminate the ability of NFP nursing homes, hospitals, Life Plan communities, colleges, universities and other non‐profits to issue tax‐exempt debt.
One anticipated side‐effect is that any "draw‐down" tax‐exempt loans already issued would need to be fully drawn before January 1st to not jeopardize the tax‐exempt status of the debt. Therefore, any 501(c) 3 that currently has a draw down tax‐exempt loan that is not fully drawn down by the end of the
year should arrange to have that loan fully funded by the end of the year.
Another anticipated side‐effect is that any tax‐exempt bank loans that are already issued may become taxable when the loan is renegotiated on the reset date. If the current rate increases by more than 25 basis points, the loan would be considered a new issue. As a new issue, it would not qualify as a taxexempt
loan under the proposed bill. Therefore, if borrowers have existing bank loans with short reset dates, they should arrange before the end of the year to extend the reset date as long as possible.
Provision: Reduction in Corporate Tax Rate
Effect: Increases Rates on Existing and Future Tax‐Exempt Bank Obligations
Even if the earlier provision discussed is eliminated from the Bill, the Bill has a provision to decrease corporate tax rates from their current levels, which will directly impact Directly Placed Tax‐Exempt Bank Bought Bonds ("Tax‐Exempt Bank Loans"), both existing and future.
When banks make tax‐exempt loans, they are effectively passing the benefit of a tax‐rule on to the borrower in the form of a lower interest rate. Simply put, the bank can deduct a portion of the cost of a loan, and can therefore make the same profit on a tax‐exempt loan with a lower rate as they do on a traditional ("taxable") loan. The size of that tax benefit to the bank (and therefore to the borrower) is tied directly and proportionately to the prevailing corporate tax rate. If the corporate tax rate is reduced, the bank's benefit is reduced.
For Existing Tax‐Exempt Loans: Since the loan has already been made, the bank would now be left with a loan that is less profitable than originally anticipated. Banks are generally uncomfortable with this "tax risk", and as a result pass that risk to borrowers in the form of "gross up provisions" in the legal documents, which allow the bank to change your interest rate (upward) on existing loans if the corporate tax rate falls. The rights of the bank to pass on the cost of the effects of the change of the corporate tax rate will depend on the particular language in your documents.
For Future Tax‐Exempt Loans: Rates will be higher to reflect the diminished benefit that the bank will receive as result of holding tax‐exempt obligations. Again, the rights of the bank to pass on the cost of the effects of the change of the corporate tax rate will depend on the particular language in your documents.
Provision: Elimination of Advanced Refunding Bonds
Effect: Reduces Flexibility to Lower Cost of Existing Debt
The bill seeks to remove the ability to issue Advanced Refunding Bonds across all Municipal Bond Borrowers, including borrowers that issue PAB. Under current tax law, both 501(c)3 organizations AND government borrowers are allowed to advanced refund previous bond issues one time, tracing back to the original asset financed. The elimination of advanced refunding bonds would require 501(c)3 organizations AND governmental entities to keep their bonds outstanding to the call date, thereby eliminating the opportunity to refinance at lower interest rates in advance of the call date – potentially locking borrowers out of realizing significant savings prior to the stated call date.
501(c)3s are negatively affected should the above provisions go through, via increased costs and diminished flexibility.
There are several actions you may consider pursuing to mitigate the effects of the proposed legislation.
- For existing tax‐exempt bank loans, consult your documents and/or your BB&T Capital Markets Investment Banker to determine the effects of any "gross up" language in the loan documents. For contemplated loans, consider negotiating the terms of the gross up language the banks will
attempt to include. In addition, consider renegotiating the length of the bank commitment to a much longer date.
- For any contemplated financings including advance refundings, consider the benefits and costs of accelerating those endeavors to close prior to year‐end.
- If you have recently issued any "draw‐down" tax‐exempt loans, consult your tax counsel regarding the need to fully draw on those obligations prior to year‐end
As a member of the American Securities Association (ASA), BB&T is signing a letter that will be sent to congress asking that provisions that negatively impact 501c3s be eliminated from the bill. Please consider calling your Congressional Representatives to ask that the provision eliminating the tax‐exempt status of private activity bonds be eliminated from the bill.
To find out who your state representative is and to get their contact information, follow the link below:
Tell your Senators and Representatives that you feel strongly they should vote against any tax bill that eliminates the ability for 501(c)3s to access tax‐exempt debt.