Defines adult foster care and license categories Defines licensee

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1 1 PURPOSE LEGAL BASE Act 218 Adult Foster Care This Manual establishes the policy and procedures to be followed by regulatory staff when the licensee requests a change in the terms or modification of a license or certification that does not require issuing a new license Defines adult foster care and license categories Defines licensee Defines specialized program Provides the authority for inspections and cooperation with other units of government Requires a health and sanitation inspection and provides authority to enter premises without prior notice to conduct on-site inspections Requires application; requires license to indicate the capacity and type of program for which certification has been issued; prohibits transfer of license to new location except as a result of eminent domain proceedings (2) Establishes the need to obtain approval to operate a specialized program b Establishes specific requirements for facilities that represent to the public that they provide care or services to persons with Alzheimer s disease R (15) and R (4) Requires a 5- business day notice of any changes in information provided in or with the license application.

2 2 Act 368 Home for the Aged (3) Defines a home for the aged (2)(3)(4) Defines license, licensee and limited license Provides for the coordination of functions with other state agencies Establishes application needs for licensure and ownership disclosure requirements Establishes conditions requiring construction permits Establishes specific requirements for facilities that represent to the public that they provide care or services to persons with Alzheimer s disease Act 258 Certification Of Specialized Programs R Prohibits exceeding capacity and requires a 5- business day notice of any changes in information contained in the application R Defines Certification R Requires application and identification of the type of specialized program for which certification is requested R Establishes fire safety standards for adult foster care facilities relative to capacity. R (2)(b) Requires training to be specific to the needs of the clients served by the home.

3 3 POLICY Licensees may request a change in terms or modification of their license or certification. The licensee or licensee designee must submit these requests in writing and regulatory staff are to respond to these requests in writing. The changes that do not require issuing a new license include the following: Change of licensee s name without a change of federal tax identification or social security number Deletion of a deceased or divorced spouse from a license Change of the facility name without a change of licensee Increase or decrease of capacity within a given license category (i.e. small group home licensee requests an increase of capacity from four to six) For changes altering the license category, see Manual 251. Change in population served Change in controlling ownership interest Note: This corporate or limited liability company (LLC) change involves the sale of stock shares in a corporation or membership interest in a limited liability company. Relocation only as a result of eminent domain proceedings (AFC only) Certification of Specialized Program changes (AFC

4 4 only) Procedures Regulatory staff are to follow the procedures outlined below when a voluntary change in terms or modification of the license or certification is requested. Change of Licensee s Name 1. Upon receipt of the licensee s written request for a name change, regulatory staff are to determine that the requested name change for the licensee is not due to a change of licensee. Note: If there is no change of licensee, the licensee s social security number and federal tax identification numbers do not change. If the requested name change is the result of a change of licensee, refer to Manual Regulatory Staff review the following information: Legal document verifying the name change Current license file Information on the computer system. 3. Regulatory staff enter the information on the computer system. Regulatory staff are to enter the previous name as an AKA on the computer system s People Screen. 4. Regulatory staff will document findings and recommendations concerning the name change on an Addendum to the Original Licensing Study Report and distribute according to Appendix 110.

5 5 Deletion of a Deceased or Divorced Spouse s Name from a License 1. Upon receipt of a written request from the licensee to remove the name of a deceased or divorced spouse from the license, regulatory staff are to request and review: a. A copy of the death certificate, or b. A written statement from the divorced spouse requesting their name be removed from the license. 2. Regulatory staff are to delete the deceased or divorced spouse s name from the licensee screen on the computer system. 3. Regulatory staff are to document findings and recommendations for proposed changes in an Addendum to the Original Licensing Study Report and distribute according to Appendix 110. Note: Only in the case of a death or divorce of a spouse can the name be removed from a license without requiring a new license. Change of Facility Name 1. Upon receipt of the licensee s written request for the facility name change, regulatory staff are to determine that the requested name change is not due to a change of licensee. Note: If there is no change of licensee, the federal tax identification number does not change. If the requested name change is the result of a change of licensee, refer to Manual Regulatory staff enter the new facility name on the computer system. 3. Regulatory staff are to document findings and recommendations concerning the name change on an Addendum to the Original Licensing Study Report

6 6 Decrease of Capacity Within A License Type and distribute according to Appendix Upon receipt of a written request from the licensee for a decrease in capacity, regulatory staff are to review the following: Current license file Information on the computer system 2. Regulatory staff are to enter the new capacity on the computer system. 3. Regulatory staff are to document findings and recommendations for proposed capacity changes on an Addendum to the Original Licensing Study Report and distribute according to Appendix 110. Increase of Capacity Within A License Type 1. Upon a receipt of a written request from the licensee for an increase in capacity, regulatory staff are to review the following: Current license file Information on the computer system 2. Regulatory staff are to conduct an on-site inspection to determine compliance with applicable rules. If regulatory staff determine that the capacity cannot be increased due to the licensee s inability to achieve compliance with the Acts or rules, the licensee may request a variance. Note: Adult foster family homes certified to provide specialized programs and requesting an increase from 3 or less to 4 or more must comply with MCL (1) and (3). 3. For facilities of 7+, assure zoning approval for the increase in capacity.

7 7 4. If the proposed increase in capacity involves changes in space utilization (i.e. construction, additions, modernization or conversions), the following inspections are required prior to approving the request: Adult Foster Care Homes licensed for 7 or more: Inspection and approval by the Bureau of Fire Safety which includes submission of construction plans and specifications (See Appendix 220). Inspection and approval by the local Health authority. Adult Foster Care Homes licensed for 6 or less An environmental health inspection may be required if there is a private sewage disposal system and the local health authority previously approved the system with an occupant/ resident capacity limit on their approval of the system. Home for the Aged Regulatory staff are to make a referral to the Bureau of Health Facilities and Fire Safety who will then determine the need for construction plan review and on-site inspection and approval. 5. Regulatory staff are to obtain copies of required inspections and approvals by other agencies (i.e. environmental health), as needed, prior to approving a capacity increase. 6. Regulatory staff are to enter appropriate capacity changes on the computer system when applicable requirements have been met. See Manual 600 for specific procedures.

8 8 Regulatory staff are to document findings and recommendations for approved capacity changes on an Addendum to the Original Licensing Study Report and distribute according to Appendix 110. Change in Population Served 1. Upon receipt of a written request from the licensee for a change in population served, regulatory staff are to review the following: Current license file Licensee information on the computer system Revised policies (program statement and admission policy for AFC group homes only, Alzheimer policy for both AFC and HFA facilities). Documentation of experience and education of the licensee/licensee designee and administrator and training of direct care staff. (AFC group and congregate facilities only) Documentation of training. Note: AFC Group and Congregate facilities and HFA facilities that represent to the public that they provide services to persons with Alzheimer s disease must comply with MCL b and MCL , respectively. 2. If the proposed change includes accommodation of persons with limited mobility, regulatory staff are to conduct an on- site inspection to evaluate compliance with applicable physical plant accessibility rules (AFC only). 3. Regulatory staff are to enter appropriate changes on the computer system.

9 9 4. Regulatory staff are to document the findings and recommendations of the proposed changes in an Addendum to the Original Licensing Study Report and distribute according to Appendix 110. Change in Controlling Ownership Interest Corporation or Limited Liability Company 1. When regulatory staff are made aware of a change in the controlling ownership interest of a corporation (stock shares) or limited liability company (LLC) (membership), regulatory staff are to arrange a meeting with the Area Manager to determine the appropriate action to be taken. Note: If there is no change of licensee, the licensee s Social Security number and/or Federal Tax Identification Number does not change 2. If the proposed change is determined to be a change in the controlling ownership interest only, regulatory staff are to notify the licensee of the need to submit an updated license application (AFC) without a fee. AFC Only: Consultants are to inform licensees via a letter of the need to make information available as specified in Attachment A & B of Manual. 3. Regulatory staff are to evaluate the updated application and additional information as required to determine the licensee s continued compliance with the Act and administrative rules. 4. Regulatory staff are to update information on the computer system. 5. Regulatory staff are to document the findings and recommendations in an Original Addendum to the Licensing Study Report and distribute according to Appendix 110.

10 10 Mergers AFC Change of Licensee Designee AFC Group Homes Change of Administrator HFA Change of Authorized Representative When an existing corporate or limited liability company licensee has absorbed another corporation or LLC through a merger, a new license/s will be required for the facility/ies, which, has been absorbed into the remaining business entity. See Manual 251 for procedures. Note: The remaining licensee is to provide information on changes to organizational structure and programs as applicable. Changes in the designee for a corporation or limited liability company designee do not require the issuance of a new license. However, the consultant must evaluate the individual to assure that they meet statutory and administrative rule requirements: Good moral character and suitability. Refer to Manual 515. Competency, refer to the Technical Assistance Manual, Rules , and When a group home licensee changes a home s administrator, the consultant must evaluate the individual to assure that they meet statutory and administrative rule requirements: Good moral character and suitability. Refer to Manual 515. Competency, refer to the Technical Assistance Manual, Rules , and A change in the authorized representative of the HFA licensee does not require the issuance of a new license. Licensing staff are to assure that the authorized representative is appointed by the individual licensee or a person within the corporate licensee organization with the legal authority to do so. Licensing staff are to update this information on the

11 11 computer system. HFA Change of Administrator When the authorized representative appoints a new administrator, licensing staff are to evaluate the individual to assure competency and compliance with the requirements of Rule (2). Licensing staff are to update this information on the computer system. AFC Relocation Due to Eminent Domain Proceedings The only time a facility is permitted to relocate without obtaining a new license is as a result of eminent domain proceedings. 1. When the consultant is made aware of a facility s need to relocate due to eminent domain proceedings, regulatory staff are to do the following: Obtain a copy of the legal notice of eminent domain proceedings Obtain an updated application from the licensee Advise the licensee that the new home will need to meet all physical plant requirements. Notify the Area Manager of the action 2. The consultant is to conduct an onsite inspection as specified in Manual 220 and provide the licensee with a written report of the findings. 3. The consultant is to consult with their Area Manager on the procedures for entering eminent domain relocation on the computer system. Note: If the new facility is in a different county, a new

12 12 license number will be needed. 4. When a consultant determines that the licensee is in compliance at the new location, a narrative Licensing Study Report is done including: A description of the reason for the transfer of the license A description of the licensee s level of compliance with quality of care requirements A description of the physical plant A recommendation regarding the transfer of the license to the new location. Certification of Specialized Program 5. Distribute the narrative Licensing Study Report as specified in Appendix 110. The only type of certification change a license may request is a change in the type of specialized program for which the facility is certified (ie., change from providing specialized program to persons with mental illness to providing specialized program to persons with developmental disabilities). The capacity for certification is the same as the license capacity. Changes in the capacity of a certified home may require the licensee to be in compliance with MCL (1) and (3). See Increase of Capacity within a License Type above for specific procedures. 1. When the licensee requests a change in the type of specialized program the facility provides, regulatory staff are to obtain an updated special certification application from the licensee.

13 13 Note: If the change in the specialized certification requested involves a change in the licensed population served, please see Change in Population Serviced above. 2. If regulatory staff determine that the licensee is in compliance with applicable the Acts and rules, staff are to enter the approved certification changes on the computer system. 3. Regulatory staff are to document findings and recommendations for the proposed certification changes in an Addendum to the Original Special Certification Study Report if the proposed change pertains only to certification and does not affect the license capacity. If the license capacity is being changed, an Addendum to the Original Licensing Study Report is to used to document the findings and recommendation. 4. Regulatory staff are to distribute the report following the procedures in Appendix 110. Denial of Change Request If regulatory staff determine that the proposed change in the terms or modification of a license will result in noncompliance with Acts or rules under which the facility is licensed or certified, regulatory staff are to inform the licensee of the findings and recommendation in writing. The licensee is to be given the options of correcting the noncompliance(s) or withdrawing his/her request. Regulatory staff may also inform the licensee of the variance/exemption rules and procedures during the exit conference. See Manual 550.

14 DIVISION OF ADULT FOSTER CARE LICENSING CHANGE IN CONTROLLING OWNERSHIP INTEREST CORPORATION Attachment A 1 11/10/03 <DATE> <Licensee Name Address Re: Name of Facility: License Number: Dear: This is in response to the change in controlling interest in <corporation name>. Rule (5) requires notification of changes in information that was provided in or with the application for license within 5 business days after the change occurs. We are requesting that you provide or make available to us the following information or documentation reflecting changes resulting from the change in controlling ownership interest of the corporation: Adult Foster Care Corporate Application (BRS 569-C) without the application fee. (form enclosed) Copies of any company documents, i.e. Articles of Organization; that have been filed or revised since the last renewal study. (Rule ) Current listing of the corporate directors, including names, addresses and telephone numbers. (Rule (g) Current organizational chart (Rule (g) Written designation by the Board of Directors of the individual authorized to act on behalf of the corporation on licensing matters. Rule (g) Copies of the Program Statement, Admission Policy, Discharge Policy, Job Descriptions, and Personnel Policies. (If they have been revised) Designation of the person who will be immediately available and have the authority to carry out the licensee s or administrator s responsibilities in their absence. (Rule )

15 DIVISION OF ADULT FOSTER CARE LICENSING CHANGE IN CONTROLLING OWNERSHIP INTEREST CORPORATION Attachment A 2 11/10/03 Current financial statement for the corporation. (R (e) and Sec of Public Act 218 of 1979, as amended). Licensing Record Clearance Request (BRS 1325, enclosed) for the Administrator, if changed and licensee designee, if changed. (Sec of Public Act 218 of 1979, as amended) A Licensing Medical Clearance Request (BRS-3704, enclosed) for the Administrator and licensee designee. (Sec of Public Act 218 of 1979, as amended and Rule (2) and (4). Documentation of required competencies and education and resumes reflecting the experience of the Administrator and the licensee. (Rule and (1). This information will be reviewed to assure that the corporation continues to be in compliance with the Act and administrative rules. Should you have any questions regarding this letter, or if you need assistance in understanding how to comply with these requirements, please feel free to contact me at <Phone Number>. Sincerely, <Consultant Name>, Licensing Consultant Bureau of Family Services <Address>

16 DIVISION OF ADULT FOSTER CARE LICENSING Attachment B CHANGE IN CONTROLLING OWNERSHIP INTEREST LIMITED LIABILITY COMPANY 1 11/10/03 <DATE> <Licensee Name Address Re: Name of Facility: License Number: Dear: This is in response to the change in controlling interest in <Limited Liability Company (LLC) name> R (5) requires notification of changes in information that was provided in or with the application for license within 5 business days after the change occurs. We are requesting that you provide or make available to us the following information or documentation reflecting changes resulting from the change in controlling ownership interest of the LLC: Adult Foster Care Corporate Application (BRS 569-C) without the application fee. (form enclosed) Copies of any company documents, i.e. Articles of Organization; that have been filed or revised since the last renewal study. (Rule ) Current listing of the Managers/Members, including names, addresses and telephone numbers. (Rule (g) Current organizational chart (Rule (g) Written designation by the Manager/s of the individual authorized to act on behalf of the LLC on licensing related matters. Rule (g) Statement identifying the Administrator. (Rule ) Copies of the Program Statement, Admission Policy, Discharge Policy, Job Descriptions, and Personnel Policies. (If they have been revised)

17 DIVISION OF ADULT FOSTER CARE LICENSING Attachment B CHANGE IN CONTROLLING OWNERSHIP INTEREST LIMITED LIABILITY COMPANY 2 11/10/03 Designation of the person who will be available and have the authority to carry out the licensee s or administrator s responsibilities in their absence. (Rule ) Disclosure of the names and addresses of persons or other business entity having ownership interest in the facility and/or LLC. (Sec of Public Act 218 of 1979, as amended) Financial Statement for the LLC. (R (e) and Sec of Public Act 218 of 1979, as amended). Licensing Record Clearance Request (BRS 1325, enclosed) for the Administrator, if changed and licensee designee, if changed. (Sec of Public Act 218 of 1979, as amended) A Licensing Medical Clearance Request (BRS-3704, enclosed) for the Administrator and licensee designee. (Sec of Public Act 218 of 1979, as amended and Rule (2) and (4). Documentation of required competencies and education and resumes reflecting the experience of the Administrator and the licensee. (Rule and (1). This information will be reviewed to assure that the LLC continues to be in compliance with the Act and administrative rules. Should you have any questions regarding this letter, or if you need assistance in understanding how to comply with these requirements, please feel free to contact me at <Phone Number>. Sincerely, <Consultant Name>, Licensing Consultant Bureau of Family Services <Address>

18 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 1 11/10/03 PURPOSE LEGAL BASE Act 218 Adult Foster Care This Manual establishes the policy and procedures to be followed by regulatory staff when the licensee requests a change in the terms or modification of a license that requires issuing a new license Defines adult foster care and license types (i.e. Adult foster care small group home, Adult foster care family home) Defines licensee Provides the authority for inspections and cooperation with other units of government Requires a health and sanitation inspection and provides authority to enter premises without prior notice to conduct on-site inspections (1) Requires a license for establishing and maintaining an adult foster care facility (2) Establishes the need for application and fee to accompany the application (4) Requires disclosure of ownership interest (7) Prohibits transfer of a license and requires that a license be issued to a specific person for a facility at a specific location except as a result of eminent domain proceedings (8) Establishes requirements for a proposed sale of an adult foster care facility including advance written notice to the department. Act 368 R (15) and R (4) Requires a 5- business day notice of any changes in information provided in or with the license application.

19 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 2 11/10/03 Home for the Aged (3) Defines a home for the aged (2)(3)(4) Defines license, licensee and limited license Provides for the coordination of functions with other state agencies Establishes application needs, ownership disclosure, and need for a change of ownership to be reported to the director not less than 15 days before the change occurs Establishes conditions requiring construction permits Prohibits the department from issuing a license without certificate of approval from the state fire marshal division of the department of state police (2) Establishes department s right to issue a license or 6- month temporary permit (2) Establishes that A license is not transferable and shall state the persons, buildings, and properties to which it applies (3) If ownership is not voluntarily transferred [i.e. bankruptcy], the department shall be notified immediately and the new owner shall apply for a license and certification not later than 30 days after the transfer (1) Establishes that a home for the aged shall be licensed under this article. R Addresses license applications R Provides for license and permit issuance.

20 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 3 11/10/03 R Requires a 5-business day notice of any changes in information contained in the application. POLICY R Addresses requirements related to the review and approval of building plans and specifications for the construction of new buildings, additions, major building changes and conversion of existing facilities. A new license is required when a licensee requests or makes any of the following changes: Change of licensee or license entity (i.e., change in individuals, Limited Liability Company (LLC), or corporation named on license). Addition or deletion of an individual on a license Note: If the name to be deleted is a deceased spouse, see Manual. Individual named on an AFC Family Home license ceases to be an occupant of the home Change of license type or increase/decrease of capacity that alters license type (i.e., Adult foster care small group home licensee wishes to increase capacity from 6 to 7). (See Appendix 219.) Relocation (Note: If due to eminent domain proceedings, see Manual.) Merger When merger has occurred, a new license in the name of the remaining business entity (corporation or LLC) must be issued to the facilities absorbed by it. Merger is the absorption of one company by another,

21 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 4 11/10/03 the latter retaining its own name and identity and acquiring the assets, liabilities, franchises, and power of the former, and the absorbed company ceasing to exist as a separate business entity. Black s Law Dictionary PROCEDURES Consolidation type of merger where all business entities terminate their existence (dissolve) and become a new business entity with a new Federal Tax ID number. Since licenses are issued to a specific person at a specific location, the above identified changes will require issuing a new license. Regulatory staff are to follow the procedures outlined below when such changes occur. Note: The following changes do not require issuing a new license and are addressed in Manual : Stock purchase/transfer or change in corporate controlling interest. Membership purchase/transfer change in limited liability company changing the controlling interest. Relocation due to eminent domain proceedings. Regulatory staff are to inform the licensee that a new license is to be required. The procedures for issuance of an original license or permit outlined in Manual 210 and 220 are to be followed. Change of licensee When the licensee is selling an existing facility the purchaser is to be provided with an application packet and a copy of the last inspection reports (AFC only). Regulatory staff are to inform the proposed licensee that the license is not transferable. Regulatory staff are to ask the existing licensee to provide

22 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 5 11/10/03 a written statement requesting closure of his/her license with an effective date for closure. Licensees may state that closure of his/her license is contingent upon issuance of a license to the proposed licensee. The license is to be closed as requested by the existing licensee. See Manual 280 for closure procedures. When received, the application is to be enrolled and processed in accordance with the procedures Manual 220. AFC/Family Home Licensee Ceases to be an Occupant of the Family Home When an individual named on an adult foster care family home license moves or proposes to move out of the licensed family home, the licensing consultant is to: 1. Notify the licensee/s in writing that the terms of the license require that each licensee be a member of the household and an occupant of the family home (see MCLA ). If a licensee continues to reside out of the home, he/she will be in noncompliance with those terms. The licensing consultant is to inform the licensee that if they wish to live in another location, they will need to apply for a small group home license. (See Manual 200 for specific procedures.) The licensee must, however, live in the family home until the application for a small group home can be processed and a license issued. 2. If the licensee continues to violate the terms of the family home license, the consultant should review pursuing disciplinary action with their manager. See Manual 400 for specific procedures.

23 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 6 11/10/03 Change of Type Merger When a licensee requests a change of type, a new license is required. The licensee is to be instructed to request an application for a new license (see Manual 200 for specific procedures). The licensee is to be informed that they must continue to comply with the terms of their current license until a new license is issued. Regulatory staff are to ask the licensee to provide a written statement requesting closure of their existing license with a effective date for closure. Licensees may state that closure of their existing license is contingent upon issuance of the new license. See Manual 280 for closure procedures. When two or more corporations or Limited Liability Companies (LLC) merge, a new license will have to be issued in the name of the remaining business entity. When regulatory staff are informed that licensees are merging, they are to do the following: 1. Inform the licensees involved that new licenses will be required and provide application materials. See Manual Verify that a merger has occurred by reviewing the Certificate of Merger form submitted to the Department of Consumer & Industry Services, and 3. Process applications as outlined in Manual 220. The previous licenses are to be closed in accordance with the instructions in Manual 280. Consolidations Consolidations are a type of Merger that results in a completely new business entity and the merging entities cease to exist as business entities. Because there is a completely new business entity, a new license will be required for all facilities involved.

24 2 DIVISION OF ADULT FOSTER CARE LICENSING 251 CHANGE IN TERMS OR MODIFICATION OF A LICENSE THAT REQUIRES ISSUING A NEW LICENSE 7 11/10/03 When regulatory staff are informed that licensees are consolidating, they are to do the following: 1. Inform the licensees involved that new licenses will be required and provide application materials. See Manual Verify that a consolidation has occurred by reviewing the Certificate of Consolidation form submitted to the Department of Consumer & Industry Services. 3. Process applications submitted as outlined in Manual 220. The previous licenses are to be closed per the instructions in Manual 280.

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