1. A. In this chapter, the following terms have the meanings indicated.

2. B. Terms Defined.

   1. (1) “Act” means Human Services Article, Title 10, Subtitle 4, Parts I—V and VII—IX, Annotated Code of Maryland.

   2. (2) “Actuarial balance sheet” means a balance sheet that uses actuarial principles and practices to determine the value of certain items in the balance sheet based on actuarial techniques involving reasonable assumptions about contingencies, inflation, and the time value of money as applied to current subscribers, which items include the present value of:

      1. (a) Future periodic fees;
      2. (b) The costs of providing promised future services; and
      3. (c) The obligation for refundable entrance fees.
   3. (3) “Agreement” means the residence and care agreement between the provider and subscriber that is the contract to provide continuing care.
   4. (4) “Assisted living unit” means a unit in which the services rendered will require the provider to be licensed either as an assisted living program under Health-General Article, §19-1805, Annotated Code of Maryland, or as a domiciliary care home under Health-General Article, §19-318, Annotated Code of Maryland.

   5. (5) Authority Recognized by the Department.

      1. (a) "Authority recognized by the Department" means a person whom the Department determines has the knowledge and experience of the continuing care industry necessary to produce the particular materials required by a given regulation in this chapter.
      2. (b) "Authority recognized by the Department" includes an independent consultant or an employee of a provider or related entity.

   6. (6) “Authorized officer” means an individual holding one of the following positions with a provider:

      1. (a) An officer;
      2. (b) A general partner;
      3. (c) Any individual that serves on the governing body; or
      4. (d) A trustee of the provider.
   7. (7) “Certified financial statement” means a financial statement, prepared in accordance with generally accepted accounting principles by an independent certified public accountant, that includes an audit opinion, balance sheet, income statement, statement of cash flows, and the related notes to the financial statement.

   8. (8) “Certified financial statement for the most recent fiscal year for which a certified financial statement is available” means:

      1. (a) For providers who annually receive a certified financial statement within 120 days of the end of their fiscal year, the most recently dated financial statement; and
      2. (b) For any other providers, assuming that a certified financial statement is obtainable under generally accepted auditing standards, a certified financial statement that is not greater than 120 days old.
   9. (9) “Chief executive officer” means the individual whose primary responsibility is to oversee all aspects of the operation of the provider.
   10. (10) “Committee” means Financial Review Committee.

   11. (11) “Continuing care” means furnishing shelter and services to the public under all the following conditions:

       1. (a) Services consist of shelter plus health services;

       2. (b) Health services provided shall include at least one of the following services:

          1. (i) Medical and nursing services,
          2. (ii) A formal arrangement between the provider and a nursing home by which the nursing home grants priority to subscribers for admission to the nursing home, or
          3. (iii) Assistance with the activities of daily living other than the provision of meals;

       3. (c) Services may be paid for by the following methods:

          1. (i) An entrance fee in advance of receipt of services,
          2. (ii) Regular periodic charges which guarantee health services whenever needed,
          3. (iii) Purchase of services at the option of the subscriber as services are needed, or
          4. (iv) Any combination of the arrangements in §B(11)(c)(i)—(iii) of this regulation;

       4. (d) Services are offered to individuals who are:

          1. (i) 60 years old or older, and
          2. (ii) Not related to the provider by blood or marriage;

       5. (e) Services are offered for:

          1. (i) The life of the subscriber, or
          2. (ii) A period in excess of 1 year; and

       6. (f) Services are offered under a written agreement that may require periodic charges and shall require:

          1. (i) A transfer of assets from the subscriber to the provider,
          2. (ii) An entrance fee, or
          3. (iii) Both a transfer of assets and an entrance fee.

   12. (12) Control.

       1. (a) “Control” means the power to direct, or cause the direction of, the management and policies of a provider through the ownership of voting securities, by contract, or otherwise.
       2. (b) “Control” includes a parent or sole corporate member of a corporation directly participating in the initiation or approval of policies directly affecting the operations, including approval of budgets or approval of the chief executive officer of the provider.
   13. (13) “Department” means the Maryland Department of Aging.
   14. (14) “Deposit” means a portion of the entrance fee.

   15. (15) Deposit Agreement.

       1. (a) “Deposit agreement” means the preliminary agreement between the subscriber and the provider by which the provider reserves for the subscriber the right to contract for continuing care in return for payment by the subscriber of a deposit.
       2. (b) “Deposit agreement” includes any agreement of similar form and use, regardless of title, including priority agreement and reservation agreement.

   16. (16) Entrance Fee.

       1. (a) “Entrance fee” means a sum of money or other consideration, other than a surcharge, paid initially or in deferred payments, that:

          1. (i) Assures a subscriber continuing care for a term of more than 1 year or for life; and
          2. (ii) Is at least three times the weighted average of the monthly cost of the periodic fees charged for independent living and assisted living units.
       2. (b) “Entrance fee” includes a fee of similar form and application, regardless of title.
   17. (17) “Escrow agreement” means an agreement between the provider and a financial institution by which deposits and entrance fees are held in Maryland by the financial institution until release is permitted by law or regulation.

   18. (18) “Expansion” means any single new capital addition, excluding renovation and normal repair and maintenance, that meets either of the following criteria:

       1. (a) If independent living or assisted living units are to be constructed, then the number of units to be constructed is less than or equal to 25 percent of the number of existing independent living units and assisted living units; or

       2. (b) If independent living or assisted living units are not to be constructed, then the total projected cost is an amount that is more than the sum of:

          1. (i) 10 percent of the total operating expenses of the facility, less depreciation, amortization, and interest expense, as shown on the certified financial statement for the most recent fiscal year for which a certified financial statement is available, and
          2. (ii) The amount of the existing reserves properly allocable to, and so allocated for, the expansion.
   19. (19) “Facility” means a physical plant and related grounds used to provide continuing care in accordance with this chapter.
   20. (20) “Financial difficulty” means the current or impending financial condition of a provider which currently impairs or may impair the ability of the provider to meet existing or future obligations to subscribers or other creditors.
   21. (21) “Fiscal year” means the fiscal year of the provider.
   22. (22) “Generally accepted accounting principles” means those accounting principles and practices adopted by the Financial Accounting Standards Board and the American Institute of Certified Public Accountants, which include the principles expressed in the American Institute of Certified Public Accountants' “Audit and Accounting Guide for Health Care Organizations”.
   23. (23) “Governing body” means a board of directors, board of trustees, or similar group that ultimately directs the affairs of a provider, but whose members are not required to have an equity interest in the provider.
   24. (24) “MDH” means the Maryland Department of Health.
   25. (25) “MHCC” means the Maryland Health Care Commission.

   26. (26) “New units” means independent living or assisted living units that are:

       1. (a) Part of a new facility; or
       2. (b) Additions to an existing facility that are greater than 25 percent of the number of existing independent and assisted living units at the existing facility.
   27. (27) “Person” means an individual, firm, association, corporation, company, trust, partnership, limited liability company, public body, or other business or nonprofit entity.
   28. (28) “Processing fee” means a one-time fee charged by the provider to determine the financial, mental, and physical eligibility of an individual seeking admission into a facility.

   29. (29) “Provider” means a person who undertakes to provide continuing care and who is an:

       1. (a) Owner or operator of a facility; or
       2. (b) Applicant for, or the holder of, a certificate of registration.
   30. (30) “Qualified actuary” means a member in good standing of the American Academy of Actuaries.
   31. (31) “Records” means the information, books, and data maintained for the operation of the facility or the provider in accordance with this chapter.
   32. (32) “Renewal” means the renewal of a certificate of registration required annually to permit the provider to continue to offer continuing care to the public.

   33. (33) Renovation.

       1. (a) “Renovation” means any single capital improvement to, or replacement of, all or part of the existing facility that does not increase the number of independent living or assisted living units and for which the total projected cost is an amount that is more than the sum of:

          1. (i) 20 percent of the total operating expenses of the facility, less depreciation, amortization, and interest expense, as shown on the certified financial statement for the most recent fiscal year for which a certified financial statement is available; and
          2. (ii) The amount of the existing reserves properly allocable to, and so allocated for, the renovation.
       2. (b) “Renovation” does not include normal repair and maintenance.
   34. (34) “Secretary” means Secretary of Aging.
   35. (35) “Subscriber” means an individual for whom continuing care is purchased under an agreement.
   36. (36) “Surcharge” means a separate and additional charge, other than a second-person entrance fee, imposed simultaneously with the entrance fee, that may be required of some, but not all, subscribers because of a condition or circumstance that applies only to those subscribers.

   37. (37) Unit.

       1. (a) “Unit” means a suite, room, cottage, apartment, or any other type of quarters that is located at a facility and in which a subscriber is to reside while receiving the benefits of a continuing care agreement, including quarters for independent living, assisted living, and comprehensive care.
       2. (b) “Unit” includes individual beds licensed for domiciliary care, assisted living, and comprehensive care so that each assisted living bed, domiciliary care bed, and comprehensive care bed constitutes a unit.

Authority: Human Services Article, §10-403, Annotated Code of Maryland

Effective date: December 26, 1980 (7:26 Md. R. 2423)

Regulations .02B, .04A, .08, .10, and .14 amended effective March 28, 1983 (10:6 Md. R. 559)

Regulations .04A, .05A, .06, and .09 amended effective December 31, 1984 (11:26 Md. R. 2280)

Regulation .07 repealed and new Regulation .07 adopted effective December 31, 1984 (11:26 Md. R. 2280)

Regulations .01—.22 repealed and new Regulations .01—.22 adopted effective June 2, 1986 (13:11 Md. R. 1274)

Regulation .01B amended effective December 1, 1989 (16:23 Md. R. 2506); November 25, 1991 (18:23 Md. R. 2491)

Regulation .03A amended effective December 1, 1989 (16:23 Md. R. 2506); September 23, 1996 (23:19 Md. R. 1377)

Regulation .03B and C amended effective November 25, 1991 (18:23 Md. R. 2491)

Regulation .04A amended effective November 25, 1991 (18:23 Md. R. 2491)

Regulation .09 amended effective November 25, 1991 (18:23 Md. R. 2491)

Regulation .09C amended effective December 1, 1989 (16:23 Md. R. 2506); June 22, 1992 (19:12 Md. R. 1136); September 23, 1996 (23:19 Md. R. 1377)

Regulation .09E amended effective December 1, 1989 (16:23 Md. R. 2506)

Regulation .09G amended effective June 22, 1992 (19:12 Md. R. 1136)

Regulation .10A amended effective November 25, 1991 (18:23 Md. R. 2491)

Regulations .01—.22 repealed and new Regulations .01—.36 adopted effective July 27, 1998 (25:15 Md. R. 1192)

Chapter recodified from COMAR 14.11.02 to COMAR 32.02.01, October 2000

Regulation .01B amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .02B amended effective October 6, 2008 (35:20 Md. R. 1777)

Regulation .02B, E amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .03B amended effective March 1, 2004 (31:4 Md. R. 318)

Regulation .04 amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .05A amended effective November 6, 2006 (33:22 Md. R. 1734); March 22, 2010 (37:6 Md. R. 481)

Regulation .06L, M amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .07A amended effective March 22, 2010 (37:6 Md. R. 481)

Regulation .07A, B amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .09B amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .10A amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .11B amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .12D amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .13 amended effective October 6, 2008 (35:20 Md. R. 1777); March 22, 2010 (37:6 Md. R. 481)

Regulation .13C amended effective March 1, 2004 (31:4 Md. R. 318); March 4, 2013 (40:4 Md. R. 348); August 29, 2016 (43:17 Md. R. 959)

Regulation .13C, F amended effective March 17, 2025 (52:5 Md. R. 239)

Regulation .13D amended effective December 25, 2000 (27:25 Md. R. 2283)

Regulation .14 amended effective March 22, 2010 (37:6 Md. R. 481)

Regulation .17E amended effective March 1, 2004 (31:4 Md. R. 318); June 20, 2016 (43:12 Md. R. 668)

Regulation .19 amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .20 amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .21C amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .22C amended effective March 17, 2025 (52:5 Md. R. 239)

Regulation .23D amended effective March 17, 2025 (52:5 Md. R. 239)

Regulation .23G amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .24B, H amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .25 amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .26 amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .27A, C amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .28C amended effective March 22, 2010 (37:6 Md. R. 481)

Regulation .28A, E amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .28F adopted effective March 22, 2010 (37:6 Md. R. 481)

Regulation .29 amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .32B amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .34C amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .35B amended effective November 6, 2006 (33:22 Md. R. 1734)

Regulation .36 amended effective March 17, 2025 (52:5 Md. R. 239)