Summer Time Programming: Diving Deep Into Finance and Regulation of CCRCs and Life Plan Communities

I was invited to join an amazing lineup of Continuing Care and Life Plan Community leaders for a July 23-24 program hosted by AV Powell & Associates in Atlanta, Georgia. My only regret was not being able to spend the second day with that group, but the reasons were appropriate: I needed to hustle back to Harrisburg, Pennsylvania to host my own July 24 panel program for Pennsylvania attorneys on “Standards, Solvency & Corporate Structures Impacting Senior Living Options” at the annual Pennsylvania Elder Law Institute.

For the Atlanta meeting, I was with deeply experienced actuary AV Powell and Scott Townsley as panelists for a morning session on a “Deep Dive into Predicting and Preventing Financial Distress.” Scott drew upon his 40+ years of experience as a consultant to the industry to analyze key factors that can impact financial soundness, including:

(a) failure to respond to evidence of deteriorating occupany levels;

(b) lack of capital for (or failure to invest in) maintenance and upgrades in the physical plant;

(c) imprudent development;

(d) expense mismanagement

Later in the day, I was especially appreciative of discussions about how “refundable entrance fess” are — and are not — being offered by providers to prospective residents. These fees are sometimes explained as a form of “prepayment” of monthly service fees. Such fees, which for a 90% refundable promise can be twice the cost of a “non-refundable entrance fee,” should be factored into a community’s actuarially sound plan for use of present dollars tied to future care.

I found myself playing the “law professor” occasionally, such as suggesting that because such fees are almost never a “secured loan” to the company, it is potentially misleading, in my opinion, to describe them to residents as “guaranteed.” Yes, well-run companies — which included all the companies in the room — honor the promises they make about how much will be refunded and when. But if a company becomes financially unstable, typically the “refundability” obligation is not prioritized for payment and is subject to complete discharge in the event of a Bankruptcy Court proceeding.

Just ask the residents fighting a tough battle about these issues in the second Chapter 11 proceeding involving The Buckingham CCRC in Texas. In an oral ruling on May 29, 2026, the Honorable Michelle V. Larson of the Northern District (Dallas) ruled against residents on all theories asserted by them in seeking recognition as having a priority status as creditors. In what she described as a postscript to her detailed ruling, she said the “Court sincerely recognizes the gravity of its ruling today and takes no pleasure in ruling against the residents, leaving the residents with little redress for the loss of their deposits.” But, the court recognized the fundamental commercial position of the secured lenders that financed construction and operations, concluding: “[I]t would be unfair to [a major financial institution] which has shown itself to be leveraged at best and penalized at worse for what is the entire industry’s woes.”

On Friday, while introducing my own morning program on similar Senior Living issues, and looking across a wider spectrum of Senior Living-Care providers, I offered recent Pennsylvania examples of financial issues in nursing homes and personal care or assisted living facilities, as well as CCRCs.

I admitted that I am sometimes frustrated with the Pennsylvania Insurance Department. On the one hand, on its website, the PA Insurance Department states, “When choosing an insurance agent or company, it’s important to be aware of any past violations and ensure your agent or company is the best option for you.” But, I was unable to find records — one way or the other — about possible Insurance Department inquiries into recent solvency or related compliance issues using the Insurance Department’s search function on that same web page. Phone calls or emails to the Department have not yet been answered.

Therefore, at our Friday session, and moving forward, we heard from our invited guests, Terrance Carolan and Julia Meashey, who are specialists in aging services at CARF International. They explained the company’s experience and recent history in evaluating CCRCs and Life Plan Communities using clear written standards. For example, the topics that are assessed include:

• Policies on ethical and active governance
• Policies on Board structure, selection and performance
• Business Practice standards such as strategic planning, satisfaction of legal requirements
• Financial planning and management, including “long-term financial planning standards for CCRCs and LPCs”
• Rights of Persons served … and more.

We talked about how lawyers might work with clients to understand accreditation standards. We talked about the possibility of using an independent, external accreditation company as alternative to state auditors. The questions from the Pennsylvania audience were robust — including wanting to know if CARF was willing to de-certify a community that doesn’t satisfy standards.

One attendee stopped by specifically to thank Terry and Julia for links to their detailed materials (which include publications on Financial Ratios and Trend Analysis, and a Consumer Guide for Life Plan Communities) with the observation that this program “made me think.” That’s a high compliment!

My deep thanks go to legendary leader AV Powell and his experienced team, and to Terry and Julia as well. For me it was two days of being a student (and part-time host).