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Post date: June 19 2003

Senior Homes' Operator To Refund Improper Fees

Attorney General Spitzer today announced a settlement with one of the nation's major operators of senior living facilities and adult homes that will provide thousands of dollars in refunds to residents for misrepresenting the services for which fees were assessed.

In settling the case, Atria Communities, Inc., based in Salisbury, Maryland, agreed to modify its admission agreement to conform with state law and to refund portions of an illegal "Community Fee" that it charged New York residents of its licensed adult homes and enriched housing programs.

"This settlement will ensure that Atria adult residences are clear and up-front about what charges pay for which services," Spitzer said. "We hope that other adult living facilities will also examine their fees and admission agreements in light of this settlement so that New Yorkers shopping for senior housing can effectively make apples-to-apples comparisons of senior housing choices."

The case began when Spitzer's office received a complaint that Atria's East Northport, Long Island facility was charging a mandatory, non-refundable "Community Fee" of $5,000 for supplemental services beyond those required to be provided by state law. Such services purportedly included a "fully stocked 24 hour country kitchen, handicapped accessible transportation, state-of-the-art security systems, and specialized seasonal banquet dinners."

The Attorney General's investigation revealed, however, that Atria used the community fee to pay for several additional items, such as nutritional assessments, establishment of medication protocols and apartment cleaning and refurbishment upon move-in and move-out. Consequently, Spitzer's office concluded that Atria misled consumers about the nature and purpose of the community fee.

In addition, Spitzer's office determined that the community fee did not comply with adult home rate requirements. New York regulations require that licensed adult homes charge one distinct basic rate for specifically identified, mandatory services. By including charges for mandatory services such as nutritional assessments and establishment of medication protocols in its "Community Fee" and not in its basic rate, Atria violated state adult home rate regulations.

Further, state regulations require that charges for supplemental services not be mandatory, and must only be for services actually given to the resident. Because Atria's community fee was mandatory and included charges for supplemental services like a "country kitchen" and "seasonal banquet dinners," it failed to comply with state adult home rate regulations, which help to ensure that consumers will not be charged for supplemental services they do not need or use.

The settlement requires Atria to revoke the community fee and not impose any other mandatory fee for services unless the fee complies with applicable law. Atria also will file amended admission agreements for review and approval by the New York State Department of Health.
Atria also will refund all or part of the fee to former residents who lived in one of the Atria facilities listed below for three years or less.

Richard Mollot, Associate Director of the Nursing Home Community Coalition of New York State, said: "We commend Attorney General Spitzer for enforcing adult home rate regulations that help seniors and their families comparison shop for rates and services between various adult homes, and ensure consumers will not be charged for supplemental services they do not need or use. The Attorney General's action could not come at a better time because it highlights the need for even more stringent regulations in this area, especially as the Governor and the Legislature consider a much-needed licensing and regulatory structure for the burgeoning market in unlicensed assisted living facilities."

In New York, Atria operates seven adult homes: one in Westchester County (Briarcliff Manor), four in Long Island (Centereach, East Northport, Huntington, and Lynbrook) and two in Monroe County (Greece and Penfield). Atria also operates three enriched housing programs: two in the Capital District (Albany Shaker, Crossgates) and one on Long Island (Great Neck). From January 1997 to June 1999, Atria also operated the Chestnut Ridge adult home in Rockland County, which is also subject to the settlement.

In addition, Atria will pay $35,000 in costs to the State.

The case was handled by Assistant Attorney General Susan Kirchheimer under the direction of Albany Section Chief Troy Oechsner. Consumers may contact the Health Care Bureau's help line at (800) 771-7755 (option #3).