Legal Issues

AWADCC will be established as a privately held not-for-profit organization. The Center will be in position to receive funding from the Department of Health Care Services (DHCS) and the California Department of Aging (CDA). According to the CDA (2014), organizations of this type can be approved for waivers in order to participate in the Multipurpose Senior Services Program (MSSP) and also some Home and Community-Based Services Programs (HCBS).
According to the CDA (2014), the Centers of Medicare and Medicaid Services (CMS) have already approved the MSSP waiver, contingent upon all other aspects being consistent. MSSP contends that it will continue to provide social and health care management services and purchased the necessary waivers for services to be rendered to frail older adults as a cost effective alternative to institutionalization. The MSSP Waiver has been extended through June 30, 2019; this could present problems for future funding diversification.
Dorsey & Whitney, LLP (2010) advocates the proposed passage of the Medicare Adult Day Care Services Act of 2009, which would provide Medicare reimbursement for adult day care services, would expand regulatory scrutiny at the federal level and would require many providers to take into account a multitude of new legal considerations. The bill was not enacted, but is the foundation for Medicare Adult Day Care Services Act of 2015. This bill was assigned to a congressional committee on March 16, 2015, which will consider it before possibly sending it on to the House Ways and Means Committee (Civic Impulse, 2015).
According to Civic Impulse (2015), since its introduction the bill continues to gain support and advocacy groups are pushing for enactment of the bill. The bill would amend Title XVIII of the Social Security Act to provide for coverage of licensed adult day services under the Medicare program. These services would including transportation, meals, supervised activities designed to enhance physical and mental health, and medication management.
AWADCC will be defined as a community care facility in accordance with Section 80001 (A) of the California Department of Health and Human Services (2007) manual. The organization will be licensed by the California Department of Social Services. As a not-for profit entity, the organization will seek funding opportunities through both non-government and government grants such as Administration on Aging Grants, Social Service Block Grants Grant and the Department of Veterans Affairs Grants and civilian aging organizations. Additionally, funding will be sought from regional centers, private fees and community donations. Adult day care centers are governed at the federal level under the Veterans Millennium Health Care and Benefits Act, Public Law 106-117, whose purpose is to make available community based programs to meet the needs of adults with limitations through individual care plans (U.S. Department of Veterans Affairs, 2015). In the state of California facilities are licensed by the Department Social Services under separate regulations in the California Code of Regulations (CCR) Title 22, based on California Health and Safety Code (California Department of Health and Human Services, 2007).
According to the State of California (2014), these facilities are heavy regulated under the California Adult Day Health Care Act (CAL. HSC § 1570-1596.5) and California Code of Regulation CCR, Title 22, Division 6, Chapter 3, Section 82005-82093. AWADCC will adhere to the policies and procedures as outline in the State of California Health and Human Services Agency, Adult Day Care Facilities Title 22, Division 6, Chapter 3 (California Department of Health and Human Services, 2007). A detail explanation is outlines in the manual. The general requirements for the license are enumerated below.
Regulation 802009 requires the public posting of business license. In facilities with a licensing capacity of seven or more, the license shall be posted in a prominent publically accessible location within the facility. If the facility is licensed fewer than six then the license shall be retained in the facility and be available for review upon request. Regulation 82020 provides instructions relative to fire clearance. All day programs shall secure through the licensing agency and maintain a fire clearance
approved by the Riverside County Fire Department and local municipality fire entity when applicable.
Regulation 82022 delineates the process and plan of operations.

(a) Each licensee of an adult day program shall have and maintain on file a current, written, with a definitive plan of operation.
(b) The plan and related materials shall contain the following:
(1) Statement of purposes, and program methods and goals.

(2) Statement of admission policies and procedures regarding acceptance of clients.
(3) Description of services to be provide
(4) Hours of operation consistent with the plan of operation and program purpose and goals.
(5) Description of the client group to be served.
(6) A copy of the admission agreement.
(7) Administrative organization, if applicable.
(8) Staffing plan, qualifications, and duties.
(9) Plan for in service education of staff, if required by regulations.
(10) A drawing of the building(s) that will be occupied, including a floor plan which describes the capacities of the buildings for the uses intended, room dimensions, and a designation of the rooms to be used for non-ambulatory clients, if any.
(11) A drawing of the grounds showing buildings, driveways, fences, storage areas, pools, gardens, recreation areas, and other space used by the clients.
(A) The drawing shall include the dimensions of all areas, which will be used by the clients.
(12) Day programs providing meals to clients, must show sample menus and a schedule for menu one calendar week indicating the time of day that meals and snacks are to be served.

(13) Transportation arrangements for clients who do not have independent arrangements.
(14) Fee policy including, but not limited to, policy on refunds.
(15) Consultant and community resources to be utilized as part of its program.
(16) A statement of the program’s policy concerning family visits and other communications with the client pursuant to Health and Safety Code Section 1512.
(c) If the licensee intends to admit or care for one or more clients who have a restricted health condition specified in Section 82092, the program policies and a program description shall be included. At a minimum, the information related to those clients and their needs shall specify all of the following:
(1) The type of restricted health condition that the licensee plans to admit.
(2) The licensee’s plans for serving that client.
(A) If the licensee plans to admit or care for one or more clients who have a staph infection or other serious, communicable infection or diseases, the plan must include:
1. A statement that all staff will receive training in universal precautions within the first 10 days of employment, and before providing care to these clients.

2. A statement of how the licensee will ensure that the training is obtained, and the name and qualifications of the person or organization that will provide the training.
(3) The services that will be provided.
(4) Staffing adjustments, if needed in order to provide the proposed services.
(A) This may include increased staffing, hiring staff with additional or different qualifications, utilizing licensed professionals as consultants, or hiring licensed professionals.
(d) If the licensee intends to admit or care for one or more clients who rely upon others to perform all activities of daily living, the plan of operation must also include a statement that demonstrates the licensee’s ability to care for these clients. The evidence or ability may include, but not be limited to:
(1) The licensee’s experience in providing care to these clients.
(2) The licensee’s experience providing care to a family member with this condition.
(3) The licensee’s plan to hire staff who have experience providing care to these clients, and documentation of what the staff person’s experience has been.
(4) Documentation of training that the licensee and/or staff have completed specific training to the needs of these clients.
(5) History of continued placements by a regional center.

(e) If the licensee intends to admit and/or specialize in care for one or more clients who have a propensity for detrimental behaviors that could or may result in harm to self or others, the program plan of operation shall include a description of precautions that will be taken to protect that client and all other clients.
(f) A plan for internal evaluation of its operation and services. The plan shall include a timetable for completing an annual evaluation, the areas that will be addressed in this evaluation, and the methodology to be used. A copy of the final annual evaluation shall be kept on file at the center and shall be available to the licensing agency during site visits or upon an official request.
(g) Any changes in the plan of operation which affect the services to clients shall be subject to licensing agency approval and shall be reported as specified in Section 82061, as per the Reporting Requirements.
(h) The day program shall operate in accordance with the terms specified in the plan of operation and may be cited for non-compliance. Regulation 82025 covers bonding.
(a) The licensee shall submit an affidavit, on form LIC 400 provided by the licensing agency, stating whether there are or will be safeguards for cash resources of clients and the maximum amount of cash resources to be safeguarded for all clients or each client in any month.
(b) All licensees, other than governmental entities, who are entrusted to care for and control clients’ cash resources, shall file or have on file with the licensing agency, a bond issued by a surety company to the State of California as principal.
(c) The amount of the bond shall be according with the following schedule: $750 or less safeguarded per month requires a $1,000 bond, $751 to $1,500 safeguarded per month requires a $2,000 bond and $1,501 to $2,500 safeguarded per month requires a $3,000 bond. Every monetary increment of $1,000 or fraction thereof shall require an additional $1,000 on the bond.
(d) The licensee shall submit a new affidavit on form LIC 400 and a new bond to the licensing agency prior to the licensee safeguarding amounts of clients’ cash resources in excess of the current bond.
(e) Whenever the licensing agency determines that the amount of the bond is insufficient to provide necessary protection of clients’ cash resources, or whenever the amount of any bond is impaired by any recovery against the bond, the licensing agency shall have the authority to require the licensee to file an additional bond in such amount as the licensing agency determines to be necessary to protect the clients’ cash resources Regulation 82062 as it pertains to finances.
(a) The licensee shall meet the following financial requirements:
(1) Development and maintenance of a financial plan which ensures resources necessary to meet operating costs for care and
supervision of clients.

(2) Maintenance of financial records.
(3)Submission of financial reports as required upon proving written request of the licensing agency. Regulation 82063 of accountability.
(a) The licensee, whether an individual or other entity, is accountable for the general supervision of the licensed day to day program, and for the establishment of policies concerning its operation.
(1) If the licensee is a corporation or an association, the governing body shall be active and functioning in order to ensure such
accountability. Regulation 82065.5 delineates the staff to client ratios.
(a) Whenever a client who relies upon others to perform all activities of daily living is present, the following minimum staffing
requirements shall be met:
(1) For Regional Center clients, staffing shall be maintained as specified by the Regional Center.
(2) For all other clients, there shall be a staff-client ratio of no less than one direct care staff to four such
(b) There shall be an overall ratio of not less than one direct care staff member providing care and supervision for each group of eight clients, or fraction thereof, present.

(1) Volunteers may be included in the staff-to-client ratio if the volunteer meets the requirements for direct care staff as specified in Section 82001(d).

Tax Considerations

AWADCC will be established as a privately held not-for-profit organization based in Riverside County. The status will allow access to grants and foundation projects. According to, (Hartle & Jensen, 2011) approximately 79% of adult day services are privately owned and not-for-profit. The organization will register the name, file the articles of incorporation and apply for the 501(c) 3 tax exempt status of not-for profit organization. Although the organization will be recognized as tax exempt, the organization is apprise of the liability of unrelated business income (Internal Revenue Services [IRS], 2015). The IRS also has differentiated between activities that are not related to the business activities that are not taxed for example activities in where the majority of the work was done by volunteers, activities carried on primarily for the benefit of members, students, patients, officers, or employees (such as a hospital gift shop for patients or employees), the sales of merchandise that has been mostly donated to the nonprofit (such as a thrift store, the rental or exchange of mailing lists of donors or members, and the distribution of token or insubstantial items as incentives for donating money (such as stamps or pre-printed mailing labels).

Ethical Issues

The principle behind the AWADCC is to support older adults with a desire to maintain an optimal levels of independence in their homes and communities. According to Drevbitch (2013) supporting data corroborates adult day care services have reduced nursing home admissions and decreased hospital admissions. The elder population group historically is one of the most vulnerable groups to suffer from abuse. Therefore, the potential for negligence by a caregiver could be a contributing factor. The Center will hire competent and well-educated staff. Additionally, all occupied areas will be monitored using the latest advanced technology.