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E.C.C. RETIREMENT VILLAGE v. COMMONWEALTH PENNSYLVANIA (05/14/85)

decided: May 14, 1985.

E.C.C. RETIREMENT VILLAGE, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



Appeal from the Order of the Department of Public Welfare in the case of Appeal of E.C.C. Retirement Village, No. 23-83-298, dated October 24, 1983.

COUNSEL

George E. Christianson, with him, Philip B. Ebersole, Christianson-Meyer, for petitioner.

Bruce G. Baron, Assistant Counsel, for respondent.

Judges Doyle and Barry and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Barry. Judge Williams, Jr. did not participate in the decision in this case.

Author: Barry

[ 89 Pa. Commw. Page 269]

Petitioner, E.C.C. Retirement Village, is appealing an order of the Department of Public Welfare (DPW) declaring thirty-four of its residents ineligible for medical assistance.

It is undisputed that all of the residents in question entered into identical contracts with petitioner prior to 1975. Basically, the residents agreed to transfer to petitioner all of their present and future property in exchange for complete care and maintenance during the rest of their natural lives. In a letter dated April 11, 1983, DPW informed petitioner of its determination that these contracts were life-care contracts, and that pursuant to 55 Pa. Code § 181.23, the residents were ineligible to receive medical assistance. Petitioner appealed this determination. Its appeal was upheld

[ 89 Pa. Commw. Page 270]

    by a hearing officer on July 12, 1983, on the basis that the contracts were not life-care in nature. This decision, however, was reversed on October 24, 1983, by the Director of the Office of Hearings and Appeals. This appeal followed.

It is petitioner's primary contention that the admission agreements signed by its residents prior to 1975 are not life-care contracts. Petitioner relies on the fact that in these agreements it pledges to provide maintenance to the residents unless they are dismissed or voluntarily decide to leave its premises. Clearly, petitioner argues, since these contracts do not contemplate an absolute obligation on its part to provide care to its residents for their entire lives, they cannot be construed as life-care contracts. We disagree. Petitioner's argument completely ignores 55 Pa. Code § 191.23(b)(1). This regulation, upon which the DPW's decision is based, provides:

(1) Contracts guaranteeing maintenance. The typical contract of this type shows that at the time the person entered the institution he transferred to the institution all of his assets and agreed to transfer to the institution all property that he might ever acquire at a later date. In return, the institution agreed to furnish him with complete maintenance either for life or for a period specified in the contract, or for a period which can be determined from the contract. A person living in an institution who has a contract with the institution under which he is entitled to maintenance for a period which has not yet expired, is eligible for assistance only if the following occur:

(i) If the institution claims it is financially unable to comply with the terms of the contract. Evidence satisfactory to establish this must be presented ...


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