Question
From: (redacted)
Sent: Thursday, September 02, 2004 4:40 PM
To: Verne,B. Michael
Subject: RE: Assisted LivingProperties with Alzheimer's Services/16 C.F.R. 802.2(d)
Michael,
I am advisedthat there is one rate for residents in the regular assisted living units and ahigher rate for residents in the Alzheimer's units. However, it is not preciselyaccurate to refer to the rates as all-inclusive. In addition to those rates,all residents are assessed as to their need for extra assistance withactivities of daily living. Those assessments go into a tiered pricing system.I am advised that the average additional assessments for regular and forAlzheimer's residents are not very different.
(redacted)
-----OriginalMessage ----
From: Verne, B.Michael [mailto:MVERNE@ftc.gov]
Sent: Thursday, September 02, 2004 8:28 AM
To: (redacted)
Subject: RE:Assisted Living Properties with Alzheimer's Services/16
C.F.R. 802.2(d)
It would behelpful to us to know how the extra services in the Alzheimer's unit areaccounted for / billed. Are those residents charged separately (above andbeyond the charge for living facilities) for the special services provided? Oris there one all-inclusive rate for the regular living facilities and a higherall-inclusive rate for the Alzheimer's living facilities? Thanks
-----OriginalMessage ----
From: (redacted)
Sent: Wednesday, September 01, 2004 3:22 PM
To: Verne, B.Michael
Subject:Assisted Living Properties with Alzheimer's Services/16 C.F.R. 802.2(d)
Dear Michael,
This is tofollow up on our conversation a few days ago. I had asked about the applicationof the exemption for residential property under 16 C.F.R. 802.2(d) to anacquisition of assisted living facilities which also contain units to provideenhanced services to residents suffering from Alzheimer's or other forms ofmemory loss. You had indicated that the applicability of the exemption dependedon the nature of the enhanced services. Set forth below is a bit moreinformation about the properties and the questions on which I would like yourguidance.
Properties: Theproperties to be acquired are substantially private pay assisted livingfacilities, some of which contain dedicated units licensed to provideAlzheimer's and other memory loss services to residents. The Alzheimer's unitsare located within the same buildings as other assisted living units. However,they are located only on designated corridors behind secure code locked doors,to protect against residents wandering from the building.
In addition tothe services provided to other assisted living residents, the Alzheimer's unit residentsare provided with additional services, principally in the areas of behaviorsupport, communications and control of wandering. The Alzheimer's units arelicensed to provide assistance with activities of daily living, such as meals,bathing, grooming, toileting/incontinence, and medication assistance in thenature of reminders and administration. They are not licensed to providemedical services which would be reimbursed either by health insurance,Medicare, or Medicaid. Essentially, the services provided on the assistedliving side of the facilities are the same as on the Alzheimer's side, exceptfor the secure nature of the unit and the focus on behavioral support,communication, and wandering control. To the extent residents need medicalservices, those are provided by third party service providers (typically homehealth, therapy, and rehab providers) unrelated to the facilities.
Questions:
1. Priorinformal interpretations from the Premerger Office have indicated that assistedliving facilities are considered to be exempt as residential property under 16C.F.R. 802.2(d). Do the Alzheimer's units, as described here, alsoqualify as exempt residential property under 16 C.F.R. 802.2(d)?
2. Ifthe Alzheimer's units are not exempt under 16 C.F.R. 802.2(d), may theybe treated under 16 C.F.R. 802.2(d)(3) as a separate acquisition for anallocable portion of the overall purchase price? Please get back to me on thesequestions at your convenience.