38.2-4902 - Disclosure statement.
§ 38.2-4902. Disclosure statement.
A. The disclosure statement of each facility shall contain all of thefollowing information unless such information is contained in the continuingcare contract and a copy of that contract is attached to and made a part ofthe initial disclosure statement:
1. The name and business address of the provider and a statement of whetherthe provider is a partnership, foundation, association, corporation or othertype of business or legal entity.
2. Full information regarding ownership of the property on which the facilityis or will be operated and of the buildings in which it is or will beoperated.
3. The names and business addresses of the officers, directors, trustees,managing or general partners, and any person having a ten percent or greaterequity or beneficial interest in the provider, and a description of suchperson's interest in or occupation with the provider.
4. For (i) the provider, (ii) any person named in response to subdivision 3of this subsection or (iii) the proposed management, if the facility will bemanaged on a day-to-day basis by a person other than an individual directlyemployed by the provider:
a. A description of any business experience in the operation or management ofsimilar facilities.
b. The name and address of any professional service, firm, association,foundation, trust, partnership or corporation or any other business or legalentity in which such person has, or which has in such person, a 10 percent orgreater interest and which it is presently intended will or may providegoods, leases or services to the provider of a value of $500 or more, withinany year, including:
(1) A description of the goods, leases or services and the probable oranticipated cost thereof to the provider;
(2) The process by which the contract was awarded;
(3) Any additional offers that were received; and
(4) Any additional information requested by the Commission detailing how andwhy a contract was awarded.
c. A description of any matter in which such person:
(1) Has been convicted of a felony or pleaded nolo contendere to a criminalcharge, or been held liable or enjoined in a civil action by final judgment,if the crime or civil action involved fraud, embezzlement, fraudulentconversion, misappropriation of property or moral turpitude; or
(2) Is subject to an injunctive or restrictive order of a court of record, orwithin the past five years had any state or federal license or permitsuspended or revoked as a result of an action brought by a governmentalagency or department, arising out of or relating to business activity orhealth care, including without limitation actions affecting a license tooperate a foster care facility, nursing home, retirement home, home for theaged or facility registered under this chapter or similar laws in anotherstate; or
(3) Is currently the subject of any state or federal prosecution, oradministrative investigation involving allegations of fraud, embezzlement,fraudulent conversion, or misappropriation of property.
5. A statement as to:
a. Whether the provider is or ever has been affiliated with a religious,charitable or other nonprofit organization, the nature of any suchaffiliation, and the extent to which the affiliate organization is or will beresponsible for the financial and contractual obligations of the provider.
b. Any provision of the federal Internal Revenue Code under which theprovider is exempt from the payment of income tax.
6. The location and description of the real property of the facility,existing or proposed, and to the extent proposed, the estimated completiondate or dates of improvements, whether or not construction has begun and thecontingencies under which construction may be deferred.
7. The services provided or proposed to be provided under continuing carecontracts, including the extent to which medical care is furnished or isavailable pursuant to any arrangement. The disclosure statement shall clearlystate which services are included in basic continuing care contracts andwhich services are made available by the provider at extra charge.
8. A description of all fees required of residents, including any entrancefee and periodic charges. The description shall include (i) a description ofall proposed uses of any funds or property required to be transferred to theprovider or any other person prior to the resident's occupancy of thefacility and of any entrance fee, (ii) a description of provisions for theescrowing and return of any such funds, assets or entrance fee, the mannerand any conditions of return and to whom earnings on escrowed funds arepayable and (iii) a description of the manner by which the provider mayadjust periodic charges or other recurring fees and any limitations on suchadjustments. If the facility is already in operation, or if the provideroperates one or more similar facilities within this Commonwealth, there shallbe included tables showing the frequency and average dollar amount of eachincrease in periodic rates at each facility for the previous five years orsuch shorter period that the facility has been operated by the provider.
9. Any provisions that have been made or will be made to provide reservefunding or security to enable the provider to fully perform its obligationsunder continuing care contracts, including the establishment of escrowaccounts, trusts or reserve funds, together with the manner in which suchfunds will be invested and the names and experience of persons who will makethe investment decisions. The disclosure statement shall clearly statewhether or not reserve funds are maintained.
10. Certified financial statements of the provider, including (i) a balancesheet as of the end of the two most recent fiscal years and (ii) incomestatements of the provider for the two most recent fiscal years or suchshorter period that the provider has been in existence.
11. A pro forma income statement for the current fiscal year.
12. If operation of the facility has not yet commenced, a statement of theanticipated source and application of the funds used or to be used in thepurchase or construction of the facility, including:
a. An estimate of the cost of purchasing or constructing and equipping thefacility including such related costs as financing expense, legal expense,land costs, occupancy development costs and all other similar costs that theprovider expects to incur or become obligated for prior to the commencementof operations.
b. A description of any mortgage loan or other long-term financing intendedto be used for any purpose in the financing of the facility and of theanticipated terms and costs of such financing, including without limitation,all payments of the proceeds of such financing to the provider, management orany related person.
c. An estimate of the percentage of entrance fees that will be used orpledged for the construction or purchase of the facility, as security forlong-term financing or for any other use in connection with the commencementof operation of the facility.
d. An estimate of the total entrance fees to be received from or on behalf ofresidents at or prior to commencement of operation of the facility.
e. An estimate of the funds, if any, which are anticipated to be necessary tofund start-up losses and provide reserve funds to assure full performance ofthe obligations of the provider under continuing care contracts.
f. A projection of estimated income from fees and charges other than entrancefees, showing individual rates presently anticipated to be charged andincluding a description of the assumptions used for calculating the estimatedoccupancy rate of the facility and the effect on the income of the facilityof any government subsidies for health care services to be provided pursuantto the continuing care contracts.
g. A projection of estimated operating expenses of the facility, including(i) a description of the assumptions used in calculating any expenses andseparate allowances for the replacement of equipment and furnishings andanticipated major structural repairs or additions and (ii) an estimate of thepercentage of occupancy required for continued operation of the facility.
h. Identification of any assets pledged as collateral for any purpose.
i. An estimate of annual payments of principal and interest required by anymortgage loan or other long-term financing.
13. A description of the provider's criteria for admission of new residents.
14. A description of the provider's policies regarding access to the facilityand its services for nonresidents.
15. Any other material information concerning the facility or the providerthat may be required by the Commission or included by the provider.
16. The procedure by which a resident may file a complaint or disclose anyconcern.
B. The disclosure statement shall state on its cover that the filing of thedisclosure statement with the Commission does not constitute recommendationor endorsement of the facility by the Commission.
C. A copy of the standard form or forms for continuing care contracts used bythe provider shall be attached as an exhibit to each disclosure statement.
D. If the Commission determines that the disclosure statement does not complywith the provisions of this chapter, it shall have the right to take actionpursuant to § 38.2-4915.
(1985, c. 554, § 38.1-957; 1986, cc. 562, 598; 1992, c. 139.)