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Associated Press, Published May 27 2013

Minnesota to evaluate assisted-living industry

MINNEAPOLIS — Minnesota officials are responding to consumer complaints by taking a closer look at the fees charged by assisted-living facilities.

Some consumers have complained that the fees, which can run from hundreds to thousands of dollars, are confusing, unfair or illegal. One facility charged a family nearly $5,700 to reserve a room for their 87-year-old mother, but refused to refund them when she died a month before she was to move in. Another facility charged a move-in fee that may have run afoul of state law, the Minneapolis Star Tribune reported (http://bit.ly/12YBZKW).

The state's Office of Ombudsman for Long-Term Care said it will convene a group of investigators this summer to scrutinize a growing industry that serves thousands of elderly and disabled Minnesotans beyond a Legislature-mandated investigation that wrapped up in March. The group will focus on move-in fees, pre-lease fees and other charges at assisted-living facilities.

"I think there are fees that are questionable," ombudsman Deb Holtz said. "We see inconsistency across the state. There's different fees being charged in different places and they may or may not be called the same thing. So that's confusing for consumers."

Judy Truitt's family paid $5,675 to an assisted-living facility in Golden Valley in 2010 to secure a room for her mother and cover the first month's charges, she told the newspaper. Truitt's mother died before she could move into Country Villa, but the facility fought the family's request for a refund. The company said its contract included a $2,000 nonrefundable fee and required 30-day notice to terminate the lease.

After the Star Tribune wrote about the case two years ago, the company refunded $735. Holtz said deposits that are kept even if clients die before they move in are among the charges her office will look into.

As baby boomers reach retirement — the number of Minnesotans over age 65 was expected to double from 2010 to 2030 — the assisted-living industry will play an increasingly significant role. The state has 970 assisted-care facilities, which offer housing, support and health-related services. But the tangled set of rules governing those operations can be tough to understand.

Sandi Lubrant encountered such uncertainty in 2011 when she turned to an assisted-living facility in Mankato for help caring for her mother, Lorene Heaberlin, who had Alzheimer's disease. The family paid assisted-living company Ecumen a $750 nonrefundable move-in fee, which Lubrant described as being similar to a security deposit.

But after Haeberlin's death last year, the family learned from a state consumer advocate that some upfront fees are illegal under state landlord-tenant laws. The company eventually refunded the fee and paid a penalty, but Lubrant said she was troubled that other families might be paying the fees without realizing they don't have to.

Ecumen is a nonprofit that operates 29 assisted-living companies in Minnesota. Spokesman Eric Schubert said the company doesn't believe it was breaking the law by charging a move-in fee, but after receiving Lubrant's complaint, the company discontinued it as of May 1.

"It wasn't clear and we have made an effort to more clearly define what the fees pay for," Schubert said.

Patti Cullen, president of Care Providers of Minnesota, a trade group representing hundreds of assisted-living facilities, said her organization is working with members to make sure they communicate fees to consumers both before a resident moves in and also after the person is settled.

"Our responsibility is to make sure when someone moves in that there is full disclosure of those fees," Cullen said. "They may tell them once. You may have to tell them again."

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Information from: Star Tribune, http://www.startribune.com

Copyright 2013 The Associated Press.