United States General Accounting Office
GAO Report to Congressional Requesters
January 1997
HEALTH CARE
SERVICES
How Continuing Care
Retirement
Communities Manage
Services for the Elderly
GAO/HEHS-97-36
United States
GAO General Accounting Office
Washington, D.C. 20548
Health, Education, and
Human Services Division
B-274820
January 23, 1997
The Honorable Thomas J. Bliley, Jr.
Chairman, Committee on Commerce
House of Representatives
The Honorable James C. Greenwood
House of Representatives
The Congress has shown interest in various models of managed care as a
way to both control the rapidly rising cost of health care services for the
elderly and ensure quality care.1 Managed care is intended to channel and
coordinate individuals’ use of health services to achieve appropriate
utilization of those services and improve health outcomes. Risk-based
managed care, such as that offered by health maintenance organizations
(HMO) to over 50 million people, is also expected to control costs through
arrangements in which the organization is responsible for providing or
arranging health care for beneficiaries in exchange for payment of a fixed
fee. Such arrangements are intended to create strong incentives for
managed care organizations to manage care effectively and to help
beneficiaries maintain health and functioning. The focus of managed care,
however, has been primarily on serving working-age adults and children.
In contrast, continuing care retirement communities (CCRC) focus almost
exclusively on managing various forms of care for the elderly to help them
remain healthy and functioning. CCRCs offer retirement living in
combination with a range of health and other services that vary by CCRC.
The services a CCRC may provide—often in a campus-like setting—include
housing; long-term care, such as skilled nursing facility care and assisted
living; various medical services, including physician services and physical
therapy; and services such as meals, housekeeping, and recreational
activities. Most CCRCs are private, nonprofit agencies, and many have
religious affiliations. Currently about 350,000 residents live in
approximately 1,200 CCRCs. About one-third of CCRCs provide long-term
care for their residents under lifetime contracts in which the CCRC assumes
the residents’ risk for the cost of long-term care services.2 These CCRCs
have incentives to encourage residents to use medical care to maintain or
improve their health and functioning and to manage residents’ use of both
1
See, for example, the Medicare Preservation Act of 1995, H.R. 2425, which was included as title XV of
the Balanced Budget Reconciliation Act of 1995, H.R. 2491.
2
Typically these contracts are intended to last for the lifetime of the resident, although some can be
canceled at the option of the resident. In some cases the contract may be for a shorter period and
renewable at the option of the resident.
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acute medical and long-term care services even though these CCRCs are
generally only at risk for the cost of long-term care.
You asked us to review the processes of managed care in CCRCs and how
these relate to health care costs. In response to your request, we examined
(1) CCRC practices for promoting wellness, (2) practices for managing care
for elderly people with chronic conditions, and (3) evidence regarding the
possible effect of these practices on health status and costs.
To conduct our work, we reviewed literature on CCRCs and the clinical and
cost effects of various health practices; interviewed CCRC experts,
physicians in geriatrics, and officials from the Health Care Financing
Administration’s (HCFA) Office of Managed Care; and visited 11 CCRCs to
examine their practices. We chose these CCRCs because they assume most
residents’ financial risk for the cost of long-term care, are accredited by
the Continuing Care Accreditation Commission, and represent some
geographic variation. During visits and follow-up contacts with these
CCRCs, we interviewed executive officers, administrative officials, and
medical staff. We also collected documentation from the CCRCs on health
promotion, medical screening, and chronic disease management practices.
For a complete description of our scope and methodology, see appendix I.
To serve their elderly residents, CCRCs we examined manage care to meet
Results in Brief the needs of both healthy individuals and those who have chronic
conditions. They use active strategies to promote health, prevent disease,
and detect health problems early by encouraging exercise, proper
nutrition, social contacts, immunizations, and periodic medical exams and
assessments for all residents. Many of these CCRCs also have
multidisciplinary teams of nurses, social workers, rehabilitation
specialists, physicians, dieticians, or others to plan and manage residents’
care. These teams meet periodically to discuss residents’ health and
functional status; determine whether services are needed; and decide on
the types of treatment, services, and supports that will be provided. CCRC
staff coordinate a wide range of health and other services—whether
provided on or off site—to enhance their benefit to the individual resident.
Active monitoring of the health and functioning of residents who have
chronic conditions—such as arthritis, hypertension, and heart disease—is
an integral part of this coordinated, multidisciplinary approach to
managing care.
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Many of these CCRCs’ practices are considered to be effective in improving
the health and functioning of the elderly, although their effect on health
care costs is largely undemonstrated. Regular medical exams and health
assessments, immunizations, and counseling to encourage exercise,
proper nutrition, and social interaction are all recommended by experts
and the literature as effective health promotion and disease prevention
strategies for the elderly. In addition, geriatric experts recommend a
coordinated and multidisciplinary approach to manage chronic conditions
among the elderly because their care may involve many modes of
treatment and disciplines. While the health benefit of these practices has
been demonstrated, little evidence exists to demonstrate health cost
savings from either the CCRC package of services or most of the practices
individually.
CCRCs represent one form of managed care for the elderly. Many CCRCs
Background have managed both acute medical and long-term care services for the
elderly for decades. CCRCs plan, administer, and often provide these
services, in combination with housing and other services, frequently in a
campus-like setting.3 The number of residents in a CCRC varies, but
averages about 300, most of whom are elderly people leading active
lifestyles and living in independent housing units. Some residents receive
personal care, such as assistance in bathing and dressing, either in their
own residential units or in special assisted living units, and some receive
skilled nursing facility care. Residents may also receive physician,
laboratory, and other care on site. Expenses for these and other medical
services are reimbursable by Medicare on the same basis as for the elderly
who do not live in CCRCs.
CCRCs assess prospective residents’ health and financial status to ensure a
fit with services offered and required fees. Residents commonly pay an
entry fee to join the community and a monthly fee thereafter. These fees
vary considerably depending on factors such as the level of CCRC financial
risk for long-term care services, the size of the residential unit chosen,
whether fees are for single individuals or couples, and the kinds of
additional services and amenities provided. (See app. II for a description
of the different financial risks CCRCs assume.) In the 11 CCRCs we
visited—all of which assume residents’ risk for long-term care
costs—entry fees ranged from a low of $34,000 for a studio apartment for
one individual to a high of $439,600 for a two-bedroom home for a couple.
3
See The Consumers’ Directory of Continuing Care Retirement Communities (Washington, D.C.:
American Association of Homes and Services for the Aging, 1994) for a discussion of the philosophy of
CCRCs and profiles of more than 500 individual communities.
Page 3 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
Monthly fees in the 11 communities ranged from $1,383 for an individual to
$4,267 for a couple.
The CCRCs we visited use a variety of practices for health promotion,
CCRCs Use a Variety disease prevention, and early detection of health problems to help
of Practices to residents maintain their health and functioning. These practices are part of
Promote Wellness an approach to care that encourages CCRC residents to adopt or maintain a
lifestyle that is believed to promote good health. Providing activities and
services, usually on site, encourages residents to take advantage of them.
CCRCs Encourage Many of the CCRCs we visited promote good health for their residents by
Exercise, Proper Nutrition, encouraging exercise, proper nutrition, and social involvement.
and Social Involvement Encouraging regular exercise is a common practice that CCRCs we visited
use to maintain or improve residents’ health and functioning. CCRC efforts
include having swimming pools and fitness equipment on site, providing
staff for exercise programs, and sponsoring lectures and information on
the value of exercise. Exercise classes and activities include aerobics,
flexibility and strength exercises, swimming, yoga, lawn bowling, and
square dancing. Residents may participate through a formal program or on
an informal basis. Several CCRCs also strongly encourage walking. The
campus-like designs of some CCRCs encourage walking by locating
residential buildings within walking distance of commonly used services.
Some campuses also incorporate nature trails or other attractive walks.
Another common health promotion practice at CCRCs we visited is the
encouragement of proper nutrition. Residents at many of these CCRCs are
offered three meals a day in common dining rooms, which encourages
adequate consumption of healthy foods. Some CCRCs require residents to
have at least one of their meals each day in these settings. For other meals,
residents may cook at home or eat elsewhere. The foods offered and
nutrition information provided encourage residents to eat appropriately
for weight and other health considerations. Special diets may be provided.
At most of the CCRCs we visited dieticians are often available for
consultation and can help residents develop individual diet plans. CCRC
officials told us that on-site dietary counseling and nutritionally balanced
meals in congregate, attractively decorated dining areas help encourage
adequate nutrition and healthy eating habits.
Encouraging residents to interact socially is also a common practice
among the CCRCs we visited. CCRC officials told us that they encourage
Page 4 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
interaction because social isolation is associated with poorer health and
functioning among the elderly. They also said that the physical layout of
CCRCs fosters social interaction and is an integral part of the CCRC model.
Residents live next door to each other and may see each other frequently
through visits or while eating in congregate settings, checking mail, and
engaging in a wide range of CCRC activities. Recreational, educational,
cultural, and volunteer activities are frequently initiated, planned, and
organized by residents. Officials said that arranging and participating in
these kinds of activities are an important part of residents’ social
interaction in the community. Activities may include on-campus lectures,
movies, musical performances, woodworking, flower arranging,
photography, and civic and charitable activities.
Disease Prevention and Many of the CCRCs we visited attempt to maintain their residents’ health
Early Detection Activities and functioning through disease prevention and early detection of health
Include Immunizations and problems. These activities are carried out by nurses, social workers and
physicians who may be either affiliated with or independent of the CCRC.
Periodic Medical Exams
and Assessments Most CCRCs we visited encourage immunizations against common
preventable diseases, such as flu and pneumonia, to reduce illness and
possible fatalities. They may encourage immunization in a number of
ways, including inoculation clinics, seminars, distribution of printed
materials, and reminders from medical staff when a resident makes an
outpatient visit or has a medical examination.
Most of the CCRCs we visited encourage early detection of health problems
through periodic medical exams and other health assessments. CCRC
officials told us that these exams and assessments help staff and residents
to be more proactive in using effective medical treatments and changing
lifestyles to slow or reverse the loss of good health and function.
A combination of physicians, nurse practitioners, and social workers may
conduct elements of these exams and assessments, which may include
periodic inventories of prescription drugs used by a resident to assess
potential unwanted side effects from drug interactions, examination of an
individual’s ease in walking or getting out of a chair, and observation of
changes in an individual’s mental state. CCRC medical exams may include
testing blood pressure for hypertension and blood glucose levels for
diabetes. They may also include tests for colon, breast, and prostate
cancer as well as vision and hearing impairments. Residents’ medical
Page 5 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
records and staff are usually on site, making the periodic exams and
assessments convenient for residents.
The CCRCs we visited typically encourage periodic medical exams through
seminars, written materials, and reminders such as notices sent to
residents on their birthdays asking them to schedule an exam. Some CCRCs
follow up by telephone or other means when residents do not schedule or
appear for medical exams. If a resident does not come for an exam after
follow-up, some CCRC officials told us that this information is tracked and
an exam conducted when the resident next comes in for outpatient care
because of illness.
CCRCs we visited use a multidisciplinary, coordinated approach to manage
CCRCs Use a care for their residents with chronic conditions such as hypertension and
Multidisciplinary, heart disease. Essential elements of this approach include a wide range of
Coordinated on-site services, coordination of services to ensure residents receive them
in an appropriate and timely manner, and active monitoring of residents
Approach to Manage with chronic conditions. The prevalence of chronic conditions increases
Chronic Conditions substantially with age, and CCRC officials told us that properly managing
these conditions helps maintain residents’ functioning while delaying or
reducing use of costly services such as hospital care.
CCRCs Offer a Wide Range CCRCs we visited offer a wide range of services on site to manage care for
of Health and Other residents with chronic conditions. These services may include primary
Services on Site health care, care by specialists, skilled nursing care, and laboratory
testing. Other services may include physical therapy, social work, personal
care, dietary counseling, home chore service, and transportation. Various
combinations of services may be provided across a range of settings,
including an outpatient clinic, a skilled nursing facility, or a resident’s own
home.
In addition, some of the CCRCs we visited adapt their health promotion and
wellness programs to help meet the needs of residents with chronic
conditions. For example, they may modify a regular exercise program to
help people with arthritis retain the ability to walk. Similarly, these CCRCs
may encourage and help those with chronic conditions to continue regular
social interaction through special arrangements. For example, a resident
who can no longer walk to recreational events and congregate eating areas
may be provided with an electric cart so that he or she can remain
independent.
Page 6 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
CCRC officials told us that having a wide range of services on site makes it
possible to manage most of the care of residents with chronic conditions
within the community even when the needs are intense. CCRC officials said
that residents less frequently need care at hospital emergency rooms or as
many days of hospital care when admitted because they have access to
physicians, nursing care, and other services at the CCRC. The availability of
a skilled nursing facility where residents can easily be admitted from the
hospital or from home for short stays may also help return residents more
quickly to their homes, according to these officials.
Coordination and Active CCRCs we visited typically coordinate services to enhance their benefit for
Monitoring Used to Meet residents. CCRC staff coordinate various services provided by both CCRC
Residents’ Needs staff and other providers whether on site or off. For example, a CCRC may
coordinate an arthritic resident’s pain relief medication, specialized
exercise program, home modifications, the availability of walkers or other
ambulatory aides, and periodic assistance with dressing or bathing to help
the resident stay as functional as possible and to reduce or delay the use of
more intensive services. Multidisciplinary teams may facilitate
coordination through joint team assessments and the development of a
plan of care. Teams meet regularly to reassess needs and services. CCRC
officials told us that nursing staff generally serve as the focal point for
convening teams and providing ongoing coordination of services between
team meetings. Some CCRC officials said that nursing and social work staff
usually have day-to-day responsibility for coordinating services and
troubleshooting when problems arise.
CCRC officials told us that they actively monitor residents with chronic
conditions. Staff oversees the plan of care developed for each resident
with chronic conditions to ensure that the resident is receiving needed
services. Monitoring can include simply verifying that a resident has
visited the clinic as prescribed or kept a scheduled appointment with the
physical therapist. Or professional care staff may review medical records,
visit or call the resident at home, or call other service providers to verify
that care was received. Frequent monitoring is necessary in some cases
because a resident’s physical and mental condition can change quickly and
require different services. For example, CCRC staff may check more
frequently if episodes of pain may impair an arthritic resident’s ability to
walk or dress unassisted.
CCRC officials told us that nonmedical staff and the residents themselves
can also be important in the monitoring process. Some CCRCs we visited
Page 7 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
train food services staff, residential and grounds crews, and other staff to
recognize potentially serious problems that residents may have and to
report this information to clinical or social work staff. For example, a
housekeeper may inform clinical staff that an individual with some
memory loss has burned pots on the stove or that a resident with arthritis
is unable to get out of bed on a particular day. In addition, some CCRCs
encourage residents to notify them when they see or suspect that another
resident may need assistance. In some CCRCs, buddy systems are
developed in which two residents agree to contact or watch out for each
other regularly. When problems are reported, clinical staff call or visit
residents to investigate and respond as needed.
Many of the practices we identified in CCRCs for health promotion, disease
CCRC Practices May prevention, and early detection of health problems are credited by experts
Provide Health and the literature with reducing the risk of disease and disability and
Benefits but Effect on improving health and functioning among the elderly.4 Among the measures
considered to be effective are regular physical exams that include
Costs Is Largely screening for early detection of conditions such as hypertension, colon
Undemonstrated cancer, breast cancer, and vision and hearing loss, and immunization
against flu and pneumonia. Education and counseling to encourage
exercise and proper nutrition are also recommended. Regular aerobic or
conditioning exercise reduces the risk of coronary heart disease, diabetes,
and obesity, and exercises to improve strength, flexibility, and balance
may reduce the risk of falls and fractures. Encouraging social interaction
may also reduce isolation, which is associated with poorer health and
functioning among the elderly.
The coordinated, multidisciplinary approach to chronic disease
management used by the CCRCs we visited is also consistent with the
recommendations of geriatric care experts and is supported in the
literature as effective in slowing the progression of disease and restoring
loss of function. Multiple interventions are often used in managing many
chronic conditions that are common among the elderly, such as
hypertension, cardiovascular disease, and arthritis. These methods may
include drug therapy, physical and occupational therapy, behavior
modification, counseling, and use of special medical equipment. Experts
told us that because care for older people with chronic conditions may
involve many modes of treatment and disciplines, it needs to be organized,
4
See R.L. Berg and J.S. Cassells (eds.), The Second Fifty Years: Promoting Health and Preventing
Disability (Washington, D.C.: Institute of Medicine, Division of Health Promotion and Disease
Prevention, 1990). See also U.S. Preventive Services Task Force, Guide to Clinical Preventive Services,
2nd ed. (Baltimore, Md.: Williams and Wilkins, 1996).
Page 8 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
coordinated, and managed. Crucial to effective care management, they
said, is providing periodic monitoring and follow-up both to ensure that
the chronic condition is being controlled and to minimize any negative
effects of treatment.
While evidence exists for the effectiveness of many of the practices we
found in these CCRCs, their effect on health care costs and use of health
services has not been conclusively demonstrated. With the exception of flu
immunizations and medical screening for certain forms of cancer, such as
breast and colon cancer, little evidence exists to demonstrate clearly the
cost-effectiveness of most of the individual health promotion and chronic
disease management practices used by the CCRCs.5 Furthermore, CCRC
residents tend to be very different from the general elderly population on a
number of important sociodemographic, health, and other measures. No
studies have been conducted that adequately consider these factors in
assessing the effect of the CCRC package of services on health costs.6
Because no federal agency or program was the focus of our review, we did
Agency Comments not seek agency comments. We did, however, have a number of experts in
geriatric medicine and continuing care retirement communities review a
draft of this report. They generally agreed with its contents and provided
technical comments that we incorporated as appropriate.
We are sending copies of this report to the Secretary of Health and Human
Services; the Administrator, Health Care Financing Administration; and
other interested parties. Copies of this report will also be made available
to other interested parties on request.
5
The Second Fifty Years and Guide to Clinical Preventive Services.
6
People choosing a CCRC tend to be better educated and wealthier than the general elderly population
and are healthier when moving into the CCRC than others their age. The full effect of these differences
has not been accounted for in studies comparing CCRC residents’ use of health services with that of
elderly residents living in non-CCRC settings.
Page 9 GAO/HEHS-97-36 Care Management Practices in CCRCs
B-274820
If you or your staff have any questions, please call me at (202) 512-7119 or
Bruce D. Layton, Assistant Director, at (202) 512-6837. Other major
contributors to this report are James C. Musselwhite, Eric R. Anderson,
Ron Viereck, and Carla Brown.
William J. Scanlon
Director, Health Financing and Systems Issues
Page 10 GAO/HEHS-97-36 Care Management Practices in CCRCs
Page 11 GAO/HEHS-97-36 Care Management Practices in CCRCs
Contents
Letter 1
Appendix I 14
Scope and
Methodology
Appendix II 16
CCRC Risk
Arrangements for
Long-Term Care Costs
Table Table I.1: CCRCs Visited by GAO 15
Abbreviations
CCRC continuing care retirement community
HCFA Health Care Financing Administration
HMO health maintenance organization
Page 12 GAO/HEHS-97-36 Care Management Practices in CCRCs
Page 13 GAO/HEHS-97-36 Care Management Practices in CCRCs
Appendix I
Scope and Methodology
We focused our work on practices that 11 continuing care retirement
communities (CCRCs) use to maintain or improve the health and
functioning of their elderly residents and to manage the use of health and
other services by residents with chronic conditions. We also examined
what is known about the possible health and cost effects of these
practices. To address our study objectives, we (1) visited 11 CCRCs to
examine care management practices, (2) reviewed the literature on CCRCs
and on health and cost effects of CCRCs’ practices, and (3) interviewed
experts on CCRCs and geriatric medicine as well as officials from HCFA’s
Office of Managed Care.
The 11 CCRCs we visited in California, Maryland, Pennsylvania, and Virginia
(see table I.1) were selected primarily for three reasons. First, they assume
most residents’ financial risk for the cost of long-term care (see app. II for
a description of CCRC financial risk arrangements for long-term care costs).7
These financial arrangements provide incentives to manage health and
other services so that residents remain healthy and functioning as
independently as possible and so that costs are controlled. Second, these
CCRCs are accredited by the Continuing Care Accreditation Commission.8
Third, they represent some range of geographic variation. Our findings
from this sample of CCRCs, however, cannot be generalized to all CCRCs, to
CCRCs that are at financial risk for most residents’ long-term care costs, or
to those that are accredited.
7
In a 1995 survey of CCRCs by the American Association of Homes and Services for the Aging,
35 percent of the 456 respondents reported that they offer contracts placing them at full risk for a
resident’s long-term care not otherwise reimbursed by third parties such as Medicare.
8
See Accreditation Handbook (Washington, D.C.: Continuing Care Accreditation Commission,
1994) for a description of the accreditation process.
Page 14 GAO/HEHS-97-36 Care Management Practices in CCRCs
Appendix I
Scope and Methodology
Table I.1: CCRCs Visited by GAO
Name of community Location
California
Casa Dorinda Montecito
Mt. San Antonio Gardens Pomona
The Sequoias-San Francisco San Francisco
The Tamalpais Greenbrae
Maryland
Broadmead Cockeysville
Collington Mitchellville
Fairhaven Sykesville
Pennsylvania
Foulkeways at Gwynedd Gwynedd
Kendal at Longwood Kennett Square
Pennswood Village Newtown
Virginia
Goodwin House Alexandria
We conducted structured interviews to obtain information from CCRC
executive officers, administrative officials, and medical staff regarding the
practices used for health promotion, disease prevention, medical
screening, and management of chronic conditions. In addition, we
collected documentation on services provided and residents’ contracts,
and we directly observed some CCRC activities, programs, campus
buildings, and grounds used by residents. We conducted telephone
follow-ups to obtain additional information from CCRC officials as needed.
To examine the potential health and cost effects of CCRC practices, we
reviewed the literature and interviewed selected experts in geriatric
medicine regarding generally accepted practices or guidelines for health
promotion, disease prevention, medical screening, and management of
chronic conditions. We also interviewed officials from HCFA’s Office of
Managed Care.
We conducted our review between June and November 1996 in
accordance with generally accepted government auditing standards.
Page 15 GAO/HEHS-97-36 Care Management Practices in CCRCs
Appendix II
CCRC Risk Arrangements for Long-Term
Care Costs
CCRCs assume different levels of financial risk for the costs of their
residents’ long-term care services, such as nursing home care and assisted
living services. These long-term care services are provided in combination
with housing, residential services such as cleaning and meals, and related
services. CCRCs’ financial risks for residents’ care are defined in lifetime
contracts between the CCRC and the individual resident.9 A CCRC may offer
more than one type of long-term care risk arrangement from which
residents may choose.
Some CCRCs are at full financial risk for the cost of long-term care services.
Full Risk This means that the CCRC must pay all the costs of long-term care services
residents need except for those costs that may be reimbursed by third
parties such as Medicare. These CCRCs typically require that residents pay
an entrance fee and a monthly fee that includes prepayment for long-term
care costs, similar to an insurance arrangement. The monthly fee can
increase based on changes in operating costs and inflation adjustments
but not because of the use of long-term care services. As a result, residents
having these agreements are not at risk for covered long-term care costs.
This kind of agreement is sometimes known as a life care agreement or an
extensive or Type A contract.
Some CCRCs are at partial financial risk for the cost of long-term care
Partial Risk services. These CCRCs must pay some, but not all, of the costs of long-term
care services for residents beyond those reimbursed by third parties such
as Medicare. The financial risk of these CCRCs is limited by a cap on the
amount of long-term care services for which the CCRC will pay. For
example, for each resident, a CCRC may pay for a maximum of 30 or 60
days of nursing home care per year, whatever limit is specified in the
resident’s contract. Under these arrangements, CCRCs typically require that
residents pay an entry and monthly fee, which may be lower than the fees
for arrangements under which CCRCs assume full financial risk for the
costs of long-term care. Until the cap on long-term care services is
reached, residents’ monthly fees under the partial risk agreement can
increase based on changes in operating costs and inflation adjustments
but not as a result of the use of long-term care services. If the contract cap
is reached, however, the resident is at risk for the cost of all additional
long-term care services not reimbursed by third parties. This kind of
9
Typically these contracts are intended to last for the lifetime of the resident, although some can be
canceled at the option of the resident. In some cases the contract may be for a shorter period and
renewable at the option of the resident.
Page 16 GAO/HEHS-97-36 Care Management Practices in CCRCs
Appendix II
CCRC Risk Arrangements for Long-Term
Care Costs
agreement is sometimes known as a modified, limited services, or Type B
contract.
Some CCRCs are not at risk for the cost of long-term care services. These
No Risk CCRCs require residents to pay for services they use either through a
combination of an entry fee and a monthly fee or through a monthly fee
alone. Monthly fees in either payment arrangement can increase based on
operating costs, inflation adjustments, and the use of long-term care
services. As a result, residents are at risk for all long-term care service
costs not reimbursed by third parties such as Medicare. When this kind of
risk arrangement is based on a combination of an entrance fee and a
monthly fee it is sometimes known as a Type C contract. When it is based
only on a monthly fee it is sometimes known as a Type D contract. Under
either Type C or D contracts, residents typically pay lower fees than under
Type A or B contracts unless long-term care services are needed.
(101509) Page 17 GAO/HEHS-97-36 Care Management Practices in CCRCs
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Address Correction Requested
Health Care Services: How Continuing Care Retirement Communities Manage Services for the Elderly
Published by the Government Accountability Office on 1997-01-23.
Below is a raw (and likely hideous) rendition of the original report. (PDF)