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Some doubt promise of a lifetime of care

The entrance to La Vida Llena in the Northeast Heights. (Jim Thompson/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

“Tomorrow Never Looked So Good” is the pitch at Albuquerque’s La Vida Llena retirement community for seniors who are promised a lifetime of care from independent living to nursing care to hospice, if needed.

Rebecca DuMond has had her doubts.

She and other residents say they spent hundreds of thousands of dollars in upfront fees and rent to live out the rest of their lives in the secure retirement community.

But they testified during the state legislative session this year that they believed their future was at risk because their landlord had launched new senior living communities in Rio Rancho, Colorado and Oklahoma and might be financially overburdened.

“We sold our house and gave them our nest egg so that our relatives wouldn’t have to take care of us when we get older or need additional care,” DuMond testified. But she and other residents told lawmakers they worried La Vida Llena and its parent company, Haverland Carter LifeStyle Group, had “insufficient reserves that create systemic risk.”

Lawmakers responded to the residents’ concerns by unanimously passing legislation – which the industry supported – requiring more accountability and transparency for community care facilities in New Mexico.

“This is a really important bill for us,” said Katrina Hotrum-Lopez, secretary of the state agency that oversees long-term care facilities. “It not only starts with the protection of the people in these communities, but it’s also going to show transparency for anyone looking at a continuing care facility and we’re going to be able to be transparent about what their financial state is and what their financial solvency is.”

Under the new law, the state Department of Aging and Long-Term Services will be conducting a comprehensive analysis of financial records required of continuing care facilities, such as La Vida Llena, and its sister facility, The Neighborhood in Rio Rancho.

And there’s a requirement that such organizations provide a plan for residential relocation upon closure, if that should occur. And anyone, including a resident, can report violations of the act to the state Attorney General’s Office, which shall review the complaints and take action, if warranted, said state Sen. Bill Tallman, D-Albuquerque, sponsor of the bill.

E. DeAnn Eaton, CEO of La Vida Llena’s parent company, Haverland Carter, told the Journal in an email response to questions, “We support the additional transparency this legislation brings.”

“In fact, we had hoped for additional changes that would have created more clarity around the disclosures and the definitions in the CCA (continuing care act).” She said her organization wants to ensure those reforms are considered in the 2022 legislative session.

She said Haverland Carter “is in solid shape financially, and no residents’ money or quality care is at risk – not today and not in the future.”

She said the company provides residents with “in-depth financial and actuarial information detailing our strategy for the future.”

Lobbyist Charlie Marquez of the New Mexico Health Care Association spoke in favor of the legislation during committee hearings, telling lawmakers the industry group had worked on the measure with the sponsors and the state.

“We wanted to reassure them that everything is all good and well and that all these facilities are financially sound.” Marquez said.

Lifetime housing

Across the country, continuing care retirement communities have become an alternative to conventional assisted living and nursing home centers.

“We provide peace of mind because senior residents receive lifetime housing, predictable health care costs, and lifetime financial protection,” La Vida Llena says on its website.

After paying an upfront “entrance” fee of $350,000 in 2017, DuMond told lawmakers, she and her husband still have to dip into their savings every month to pay the $6,000 monthly rent. But they view the expenditure as “insurance for future care.”

The amount of the fee depends largely on the size of the apartment.

“We’re not a bunch of rich people living here in the lap of luxury,” DuMond said. “We are a very typical family here, except we’re much younger. We’re 72.”

The average age of residents is about 85, she testified.

“I, at 72, could live here for 20-plus years if the facility survives,” she testified. “I’m worried whether it will exist that long and what services would be cut by them in order to squeeze by.”

Tallman said he was approached in June 2018 by La Vida Llena residents who were concerned about how their entrance fee was being used and whether such fees were helping purchase other facilities instead of being saved for their future needs.

He and Rep. Liz Thomson then contacted the Attorney General’s Office, which has been in discussions with the company.

Eaton said Thursday that New Mexico law “constrains both the attorney general and us from discussing our conversation at present. But we expect to issue a statement in due course when the process is completed.”

Attorney General Hector Balderas told the Journal in a recent statement, “I am encouraged that the Legislature has taken steps to strengthen protections for senior New Mexicans, as we continue to push Haverland Carter to reform their management of La Vida Llena to increase protections of their residents.”

Stronger regulation

After Gov. Michelle Lujan Grisham took office in 2019, Tallman and Thomson, both Albuquerque Democrats, then joined forces with the state’s Aging and Long Term Services Department to craft amendments to existing law governing such facilities.

There are five such senior communities in New Mexico, but that number could grow. By 2030, New Mexico is expected to have the fourth-largest senior population in the nation per capita, Hotrum-Lopez said.

“This bill is a recognition of Aging and Long Term Services’ commitment to provide stronger regulation and oversight,” Tallman said of SB 152, which was signed into law last month by Lujan Grisham. The agency plans to draft regulations based on the new law this summer.

In the past, continuing care companies’ financial reports and disclosure statements required by existing law to be filed with the state aging agency weren’t being analyzed or reviewed because no staff member was qualified “to review these reports with a discerning eye,” Tallman said.

Now, the agency will hire someone who has the expertise to perform the review.

Moreover, such facilities must provide a plan for residential relocation upon closure or if circumstances necessitate residents’ relocation.

“The closure language is very important … when we see communities go insolvent and residents are sort of being forced out. The process happens very quickly and not in a way that any of us would want to move,” said Sarah Jacobs, general counsel for the state aging agency.

Jacobs told lawmakers considering the bill that even though residents enter into private contracts with a continuing care facility, the “state has decided some form of state oversight is appropriate given the investment and the care at stake for individuals.”

Complications can arise when a potential resident tries to assess solvency and ownership of what can be “very complex organizations.”

“I think it’s the state’s obligation to be able to provide information to the public that synthesizes those actuarial findings because it’s not an easy read,” Jacobs said.

Some residents (of such retirement communities) have gone to court to seek redress, but Jacobs said, “I don’t believe that has gone very well for them.”

Rep. Deborah Armstrong, D-Albuquerque, former head the state’s aging agency, told her House Health and Human Services Committee in April, “We have had facilities in the state close and decades ago there was a lot of history across the country of them going bankrupt because they had miscalculated what it would take to stay in business and serve their residents through life.” In 2009, owners of a Taos-based continuing care facility filed for bankruptcy and announced the closing of their 60-apartment, 20-bed center, according to news reports. Residents were stunned after having paid a large up-front fee that the company had used to pay operating expenses.

A residents’ council fought to keep the 30-year-old facility afloat, the state intervened, and a federal Bankruptcy Court sought new owners who bought the retirement center but discontinued the continuing care business model.

The Neighborhood

Elizabeth Dwyer, a retiree who lives at The Neighborhood in Rio Rancho, discovered such facilities in preparing a grant application as an employee of the city of Albuquerque.

“I loved the concept of continuing care on the same campus and understood the buy-in to be a form of paying forward for my future care,” she told lawmakers during a hearing. “However, what I’ve come to understand is my investment is not secured like a long-term care policy and that puts me and my neighbors at risk. I think these continuing care facilities are excellent public policy. But if Aging and Long Term Services Department doesn’t have the proper authority to oversee the corporations that own them, we could all end up on Medicaid.”

Tallman was asked during one legislative discussion whether the new accountability measures to protect residents could hurt a continuing care facility’s bottom line.

Actually, he responded, the enhanced financial oversight required by the state might prevent financial issues from arising and “will certainly go a long way in ensuring the facility will not close.”

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