CREJ - Journal

64 / 116

Page 4B — COLORADO REAL ESTATE JOURNAL — March 18-March 31, 2015
W ith the Colorado
senior population
increasing drastically
and the financial struggles
many younger generations
are experiencing as the U.S.
recovers from the recession,
Colorado likely will see a rise in
financial exploitation of elders.
This form of exploitation is
already the fastest-growing type
of elder abuse in Colorado.
Financial exploitation is
defined as (i) a third party’s
use of deception, intimidation
or undue influence for the
purpose of depriving a victim
of their money or property or
(ii) a third party’s use of the
victim’s money or property for
the benefit of the third party
at the expense of the victim.
Colorado’s C.R.S. § 18-6.5-108
(Colorado Reporting Law)
and the Federal Elder Justice
Act each mandate reporting
of suspected resident financial
exploitation by Colorado
senior care facilities’ staff.
Failure to comply with these
laws can result in massive
fines, lawsuits and even jail
time. Due to increases in such
exploitation, staff in Colorado’s
senior housing facilities and
nursing homes are more likely
to be cited for noncompliance
with mandatory reporting laws
as government officials more
stringently enforce these laws
as a means to curb increases in
crimes against elders.
Under the Colorado
Reporting Law, which took
effect in 2014, a staff member
of a senior care facility licensed
or certified in Colorado who
has “reasonable cause” to
believe a 70-year or older
resident is or imminently
will be financially exploited,
must report such financial
exploitation to local law
enforcement within 24 hours.
Failure to report can result in
a fine of $750 and six months
imprisonment. A nurse at a
Colorado senior care facility
already has been charged with
violating this law. The Colorado
Reporting Law applies not
only to senior care facility staff,
but also applies to a laundry
list of other professionals who
have close contact with the
elderly population including
doctors and social workers.
Currently, legislation adding
certified public accountants
and financial advisors to this
list is winding its way through
the state Legislature.
The Federal Elder Justice Act
requires staff of a long-term
care facility that has received
at least $10,000 from a federal
program under United States
Code, Title 42, Chapter 7
(e.g., Medicaid or Medicare)
in the previous year to report
any “reasonable suspicion” of
a state or local crime against
any facility resident to local law
enforcement and the Colorado
Department of Public Health
and Environment within 24
hours. Currently, the Centers
for Medicare and Medicaid
Services interpret this law to
apply to nursing and skilled
nursing facilities but not
assisted living facilities. Failure
to comply with the law can
result in a fine of $300,000 and
exclusion from almost every
federal health care program. If
such exclusion occurs and the
staff is employed by a long-term
care facility, then the facility
could lose all Medicaid and
Medicare funding. The Elder
Justice Act also requires long-
term care facilities to educate
staff on their reporting duties
and provide notice that the
facility will not retaliate against
staff for reporting a crime
committed against a resident.
As such, it is important
that staff recognize signs of
financial exploitation. The No.
1 rule in recognizing financial
exploitation of residents
is the financial exploiter
likely is someone who has a
relationship with the resident,
not a stranger. One medical
journal study found that 89.7
percent of elders who were
financially exploited were
exploited by someone they
knew. For detecting potential
resident financial exploitation,
staff should pay close attention
to a resident’s interactions
with family and friends. Look
for a family member or friend
pressuring the resident to sign
a document such as a power of
attorney; showing abnormally
intense affection toward
the resident; being present
whenever the resident has
another visitor; pressuring the
resident to decline necessary
treatments; or causing the
resident to be anxious or
frustrated before or after visits
with that person. Changes in
a resident’s financial habits
are also signs of financial
exploitation. Such changes
include a resident’s late
payment of bills in cash; writing
of checks payable to cash; or
decision to stop purchasing
necessities like toiletries. Staff
should listen to residents
regardless of the resident’s
cognitive state. If a resident says
money was stolen or someone
is threatening them, staff
should seriously investigate
such statements.
As with everything,
preparation leads to success.
The best way for Colorado’s
senior care facilities and
their staff to be prepared to
protect residents and comply
with reporting laws is for the
facilities to regularly educate
their staff on ways to recognize
exploitation and the legal
requirements for reporting
such exploitation. Training
should be conducted through
yearly seminars and updates
made to existing employee
handbooks.
A n owner or developer
of an assisted living
residence in Colorado
must take into account the
lead time necessary for the
operating entity to become
licensed by the state and
possibly certified for Medicaid
participation. These issues
must be considered whenever
there is a change of ownership
of the licensed operator, which
would occur when opening
a new facility, entering into
a lease with a new operator,
or purchasing and selling
an existing assisted living
residence if the operating
entity changes.
Licensing Change of
Ownership
The Colorado Department
of Public Health and
Environment, Health Facilities
and Emergency Medical
Services division handles
health facility licensure in
Colorado. State law specifies
that a change of ownership
occurs for all licensed health
facilities whenever there is a
sale of assets or a transfer of at
least 50 percent of the licensed
entity’s direct or indirect
equity interests to one or more
new owners. The change of
ownership licensure process
begins with an electronic
submission of a letter of intent
to CDPHE. A health facility
license application must then
be completed and submitted
electronically through the
CDPHE website. The current
operator of the assisted
living residence also must
provide a notice of change of
ownership. The notice and
complete application must be
submitted to CDPHE at least
30 days prior to the change of
ownership date.
Health Facility Licensing
The license application
requires a significant
amount of information and
documentation including, but
not limited to, organizational
documents, management
agreement (if applicable),
lease (if applicable),
disclosures of individual
owners, disclosures of licensure
actions or legal actions for
affiliated health facilities in
other states, and building
code and fire code sign-offs.
CDPHE takes the position that
the time frame for processing
the applications does not
begin until all information and
documentation is received.
Since it normally takes
longer to prepare the license
application than expected,
sufficient lead time is critical.
A fitness review is required
to process the license
application, during which
CDPHE reviews the applicant’s
ability to conduct a licensed
operation. CDPHE also reviews
the application, required
documentation, applicant’s
financial resources, compliance
history, insurance coverage,
policies and procedures, and
credentials of staff.
If the applicant has no
operating history in the state,
CDPHE may also check with
other states in which the
applicant, applicant’s parent
company or affiliated entities
operated health facilities
to determine compliance
history. This fitness review
process also may require an
on-site inspection or survey
if the facility is new or if the
applicant has applied for
Medicaid certification.
The 30-day time period is not
a requirement for processing
an assisted living residence
license, so the process may
take much longer, especially if
there is a history of compliance
problems.
Health Facility Fire
and Building Codes
Since July 2013, health
facility buildings and structures
must be maintained in
accordance with local building
and fire codes. If no local
building and fire codes exist,
health facilities must comply
with building and fire codes
adopted by the director of the
Department of Public Safety,
Division of Fire Prevention and
Control.
For new construction or
substantial remodeling, the
local building department
and local fire department
conduct construction plan
reviews, issue building permits,
perform necessary inspections
and issue certificates of
occupancy. If there is no
local building department or
fire department, DFPC will
perform the construction plan
review, issue building permits,
perform necessary inspections
and issue certificates of
occupancy.
A facility also has the option
of hiring and compensating
a third-party inspector who
is under contract with DFPC
or who has been certified
by DFPC to perform such
inspections. The developer of
a new assisted living residence
must determine whether local
authorities or DFPC will have
authority over the facility.
We recommend opening
a dialogue and requesting
periodic inspections during
construction to assure code
compliance and avoid excessive
costs for correction of
deficiencies.
If the assisted living residence
is not Medicaid certified,
only local authority approvals
(local fire authority and local
building code authority)
are required. However, if
the assisted living residence
also is applying for Medicaid
certification, the facility must
meet requirements established
by the Centers for Medicare
and Medicaid Services and
undergo a life-safety code
survey by DFPC. For a new
Medicaid-certified assisted
living residence, the license
will not be issued until the life-
safety code survey is completed
and deficiencies are corrected.
An assisted living residence
license will not be issued until
local authority or DFPC sign-
offs are obtained. Correction
of deficiencies cited by local
authorities or DFPC can
Seth Weiland
Attorney, Husch Blackwell, Denver
Kevin Peters
Partner, Husch Blackwell, Denver