Section 3207 - Disclosure statement(a) At the time of or prior to the execution of a contract to provide continuing care or at the time of or prior to the transfer of any money or other property to a provider by or on behalf of a prospective resident, whichever shall first occur, the provider shall deliver a disclosure statement to the person with whom the contract is to be entered into, which shall contain all of the following information unless such information is in the contract, a copy of which must be attached to the statement:(1) The name and business address of the provider and a statement of whether the provider is a partnership, corporation or other type of legal entity.(2) The names and business addresses of the officers, directors, trustees, managing or general partners, and any person having a 10% or greater equity or beneficial interest in or of the provider and a description of such person's interest in or occupation with the provider.(3) With respect to: (ii) Any person named in response to paragraph (2).(iii) The proposed manager, if the facility will be managed on a day-to-day basis by a person other than an individual directly employed by the provider: (A) A description of the business experience of such person, if any, in the operation or management of similar facilities.(B) The name and address of any professional service, firm, association, trust, partnership or corporation in which such person has, or which has in such person, a 10% or greater interest and which it is presently intended will or may provide goods, leases or services to the facility of a value of $500 or more, within any year, including:(I) A description of the goods, leases or services and the probable or anticipated cost thereof to the facility or provider.(II) The process by which the contract was awarded.(III) Any additional offers that were received. The commissioner may request additional information, detailing why a contract was awarded, as may be necessary.
(C) A description of any matter in which such a person:(I) has been convicted of a felony or pleaded nolo contendere to a felony charge or been held liable or enjoined in a civil action by final judgment if the felony or civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property; or(II) is subject to a currently effective injunctive or restrictive order of a court of record, or within the past five years had any State or Federal license or permit suspended or revoked as a result of an action brought by a governmental agency or department, arising out of or relating to business activity or health care, including, without limitation, actions affecting a license to operate a foster care facility, nursing home, retirement home, home for the aged or facility registered under this act or a similar act in another state.(4) A statement as to:(i) Whether the provider is or ever has been affiliated with a religious, charitable or other nonprofit organization.(ii) The nature of the affiliation, if any.(iii) The extent to which the affiliate organization will be responsible for the financial and contract obligations of the provider.(iv) The provision of the Federal Internal Revenue Code, if any, under which the provider or affiliate is exempt from the payment of income tax.(5) The location and description of the physical property or properties of the facility, existing or proposed, and, to the extent proposed, the estimated completion date or dates, whether or not construction has begun and the contingencies subject to which construction may be deferred.(6) The services provided or proposed to be provided under contracts for continuing care at the facility, including the extent to which medical care is furnished. The disclosure statement shall clearly state which services are included in basic contracts for continuing care and which services are made available at or by the facility at extra charge.(7) A description of all fees required of residents, including the entrance fee and periodic charges, if any. The description shall include the manner by which the provider may adjust periodic charges or other recurring fees and the limitations on such adjustments, if any. If the facility is already in operation or if the provider or manager operates one or more similar facilities within this Commonwealth, there shall be included tables showing the frequency and average dollar amount of each increase in periodic rates at each such facility for the previous five years or such shorter period as the facility may have been operated by the provider or manager.(8) The provisions that have been made or will be made, if any, to provide reserve funding or security to enable the provider to fully perform its obligations under contracts to provide continuing care at the facility, including the establishment of escrow accounts, trusts or reserve funds, together with the manner in which such funds will be invested and the names and experience of persons who will make the investment decisions.(9) Certified financial statements of the provider, including:(i) A balance sheet as of the end of the two most recent fiscal years.(ii) Income statements of the provider for the two most recent fiscal years or such shorter period of time as the provider shall have been in existence.(10) If operation of the facility has not yet commenced, a statement of the anticipated source and application of the funds used or to be used in the purchase or construction of the facility, including: (i) An estimate of the cost of purchasing or constructing and equipping the facility including such related costs as financing expense, legal expense, land costs, occupancy development costs and all other similar costs which the provider expects to incur or become obligated for prior to the commencement of operations.(ii) A description of any mortgage loan or other long-term financing intended to be used for the financing of the facility, including the anticipated terms and costs of such financing.(iii) An estimate of the total entrance fees to be received from or on behalf of residents at or prior to commencement of operation of the facility.(iv) An estimate of the funds, if any, which are anticipated to be necessary to fund start-up losses and provide reserve funds to assure full performance of the obligations of the provider under contracts for the provision of continuing care.(v) A projection of estimated income from fees and charges other than entrance fees, showing individual rates presently anticipated to be charged and including a description of the assumptions used for calculating the estimated occupancy rate of the facility and the effect on the income of the facility of government subsidies for health care services, if any, to be provided pursuant to the contracts for continuing care.(vi) A projection of estimated operating expenses of the facility, including a description of the assumptions used in calculating the expenses and separate allowances, if any, for the replacement of equipment and furnishings and anticipated major structural repairs or additions.(vii) Identification of any assets pledged as collateral for any purpose.(viii) An estimate of annual payments of principal and interest required by any mortgage loan or other long-term financing.(11) Such other material information concerning the facility or the provider as may be required by the department or as the provider wishes to include.(12) The cover page of the disclosure statement shall state, in a prominent location and type face, the date of the disclosure statement and that the issuance of a certificate of authority does not constitute approval, recommendation or endorsement of the facility by the department, nor is it evidence of, nor does it attest to, the accuracy or completeness of the information set out in the disclosure statement.(13) A copy of the standard form or forms of contract for continuing care used by the provider shall be attached as an exhibit to each disclosure statement.(b) The provider shall file with the commissioner, annually within four months following the end of the provider's fiscal year, an annual disclosure statement which shall contain the information required by this act for the initial disclosure statement. The annual disclosure statement shall also be accompanied by a narrative describing any material differences between:(1) The pro forma income statements filed pursuant to this act either as part of the application for registration or as part of the most recent annual disclosure statement.(2) The actual results of operations during the fiscal year. The annual disclosure statement shall also contain a revised pro forma income statement for the next fiscal year. The commissioner may request additional income statements when it is shown that such are necessary.
(c) From the date an annual disclosure statement is filed until the date the next succeeding annual disclosure statement is filed with the commissioner and prior to the provider's acceptance of part or all of any application fee or part of the entrance fee or the execution of the continuing-care agreement by the resident, whichever first occurs, the provider shall deliver the current annual disclosure statement to the individual or individuals who are current or prospective residents and with whom the continuing-care agreement is or may be entered into.(d) In addition to filing the annual disclosure statement, the provider may amend its currently filed disclosure statement at any other time if, in the opinion of the provider, an amendment is necessary to prevent the disclosure statement and annual disclosure statement from containing any material misstatement of fact or omission to state a material fact required to be stated therein. Any such amendment or amended disclosure statement must be filed with the commissioner before it is delivered to any resident or prospective resident and is subject to all the requirements, including those as to content and delivery, of this act.1984, June 18, P.L. 391, No. 82, § 7, effective in 6 months.