Current through Register Vol. 45, No. 52, December 27, 2023
(a) For
the purposes of this Part, a management contract is an agreement between a life
care community's governing body and a contracting entity for the contracting
entity to assume the primary responsibility for managing the day-to-day
operations of an entire community or component thereof.
(b) A management contract shall contain the
following information:
(1) a description of
the proposed role of the governing body during the period of the proposed
management contract. The description shall clearly reflect retention by the
governing authority of ongoing responsibility for statutory and regulatory
compliance;
(2) a provision that
clearly recognizes that the responsibilities of the community's governing body
are in no way obviated by entering into a management contract and that any
powers not specifically delegated to the contracting entity through the
provisions of the contract remain with the governing authority;
(3) a provision that states that the
community's governing body shall retain the authority to discharge the managing
entity and its employees at the community with or without cause; and
(4) a plan for assuring maintenance of the
fiscal stability and the level and quality of services provided by the
community during the term of the management contract.
(c) The governing body shall retain
sufficient authority and control to discharge its responsibility under this
Part. The following elements of control shall not be delegated to a managing
entity:
(1) direct independent authority to
appoint and discharge the chief executive officer or other key management
employees above the department head level;
(2) independent control of the books and
records;
(3) authority over the
disposition of assets and the authority to incur on behalf of the community
liabilities not normally associated with the day-to-day operation of a
facility; and
(4) independent
adoption of policies affecting the delivery of life care community
services.
(d) A
governing body wishing to enter into a management contract shall submit a
proposed written contract to the department upon submission of a certificate of
authority application in accordance with section
900.3(c)(13)
of this Title or a governing body entering a new management contract or
revising a management contract subsequent to the issuance of a certificate of
authority shall submit a copy of the contract with the submission of the
disclosure statement in accordance with section
901.9(a)(2)
of this Part. In addition, the governing body shall also submit, within the
same time frame, the following:
(1) a
statement as to whether the manager or managing entity has been convicted of a
crime or pleaded nolo contendre to a felony charge, or been held liable or
enjoined in a civil action by final judgement if the criminal or civil action
involved fraud, embezzlement, fraudulent conversion or misappropriation of
property;
(2) a statement as to
whether the manager or managing entity had a prior discharge in bankruptcy or
was found insolvent in any court action; and
(3) a statement as to whether the manager or
managing entity is or was subject to a currently effective injunctive or
restrictive order or Federal or State administrative order relating to business
activity or health care as a result of an action brought by a public agency or
department, including without limitation, actions affecting a license to
operate a life care, health care and/or adult care operation as defined in
section
900.1(m)
of this Title. The statement shall set forth the court or agency, date of
conviction or judgement, the penalty imposed or the damages assessed, or the
date, nature and issuer of the order.