Minnesota state panel to review assisted-living fees

  • Article by: BRAD SCHRADE , Star Tribune
  • Updated: May 28, 2013 - 9:56 AM

Group this summer to look at fees and other consumer issues across Minnesota’s assisted-living system.

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An assisted living apartment in Minnetonka.

Photo: Jim Gehrz, Star Tribune

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A Plymouth family paid $5,675 to secure a room at a facility in Golden Valley for their 87-year-old mother, who died before she moved in, but the facility refused to refund the money. A family of an 83-year-old woman who had dementia paid $750 to hold an apartment at an assisted-living facility in Mankato, but they later questioned the fee after learning it may have violated state landlord-tenant law.

Move-in fees, pre-lease fees and other charges at assisted-living facilities will be getting closer scrutiny this summer as part of a state review of a growing industry that serves thousands of elderly and disabled Minnesotans. Some consumers have complained that the fees, which can run in the thousands of dollars, are confusing, unfair or even illegal.

Such fees were highlighted in an initial review of the industry, mandated by the Legislature, that was released in March. Now the state’s Office of Ombudsman for Long-Term Care plans to convene a group this summer to continue looking at fees and other consumer issues across Minnesota’s assisted-living system.

“I think there are fees that are questionable,” said ombudsman Deb Holtz, who recently had her staff of consumer advocates attend a training session on fees. “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.”

As a wave of baby boomers hits retirement age — the number of Minnesotans over age 65 is expected to double between 2010 and 2030 — the assisted-living industry will play an increasingly significant role for tens of thousands of Minnesotans.

The state has 970 assisted-care facilities with a total of 51,175 units. Yet the thicket of rules on how they operate can be challenging for tenants to understand. The facilities — part housing, part support and health-related services — operate under a web of laws governing both sides of the business.

$750 to move in

As Alzheimer’s and Lewy body dementia stole her independence in the fall of 2011, Lorene Heaberlin’s family turned to an assisted-living facility in Mankato for help.

The advancing diseases made Heaberlin’s case urgent, and her family didn’t think much about paying a $750 nonrefundable “move-in” fee charged by the assisted-living company, Ecumen, to secure the apartment. It was described to the family as something similar to a security deposit, according to Heaberlin’s daughter, Sandi Lubrant.

After Heaberlin’s death last year, the family learned from a state consumer advocate there were questions about the legality of some upfront fees under state landlord-tenant laws.

The company eventually refunded the fee and paid a penalty that was called for under state law, Lubrant said, but she was troubled that other families were paying these fees without knowing their legal rights.

“Nothing sat right with me on this,” Lubrant said. “Even though we got a refund, I was concerned about the corporate practice.”

A spokesman for Ecumen, a nonprofit that is one of the largest assisted-living companies in Minnesota with 29 facilities, says the company does not believe it was breaking the law by charging a move-in fee.

But after receiving the complaint from Lubrant and another family with similar concerns, the spokesman said, the company changed its policy on fees, starting May 1.

Ecumen has discontinued the move-in fee, which ranged from $300 to $800, depending on the facility, and instituted a standardized set of start-up fees across all of its assisted-­living facilities. The fees include a $200 screening fee and a $100 moving fee.

Ecumen says it takes customer feedback seriously. Its new fee structure is meant to better communicate the services covered by the charges.

“It wasn’t clear and we have made an effort to more clearly define what the fees pay for,” said Eric Schubert, a spokesman with the company.

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