We want to update you on recent discussions we have had with representatives from the Attorney General’s Office (AGO). We continue to seek clarity regarding what charges and increases are allowed under Governor Inslee’s Proclamation 20-19.4.
We will continue to push the Attorney General’s Office for additional clarity. We are not entirely satisfied with the AGO’s position and we believe that its position is not in line with the Governor’s Proclamation. But as of January 8, 2021, the information outlined below will provide you with an overview of what is currently allowed by the AGO.
The Governor’s Proclamation provides in relevant part that:
…the prohibition against increasing, or threatening to increase, the rate of rent for any dwelling does not apply to customary changes in the charges or fees for cost of care (such as charges for personal care, utilities, and other reasonable and customary operating expenses), or reasonable charges or fees related to COVID-19 (such as the costs of PPE and testing), as long as these charges or fees are outlined in the long-term care facility’s notice of services and are applied in accordance with the laws and rules that apply to those facilities, including any advance notice requirement.
Clearly there are two different types of increases contemplated by the Governor’s Proclamation. One is a “COVID-19 Related Fee” that covers the cost of COVID related expenses like PPE and testing. The other encompasses increased care related to operating costs.
The “COVID-19 Related Fee” is the more straightforward of the two. Providers charging this type of fee should make sure that the amount of the fee is reasonable and related to ongoing COVID-19 related expenses. If the COVID-19 Related Fee is in line with your COVID-19 related expenses, you should be okay. Providers should be prepared to justify and explain the amount of the fee if questioned.
Increased charges due to rising care-related operating costs is more difficult to understand and explain. The Attorney General’s Office is taking the position that “rent increases” covering room and board continue to be prohibited by the Proclamation and a provider’s past practice of applying annual increases of three to five percent is not a “customary change” in a charge or fee. Rather, such a blanket across-the-board increase, however small, is still prohibited unless it can be attributed to changes in the cost of care.
The Attorney General’s Office is taking the position that increases that are based on changes in the cost of care, or reasonable costs associated with COVID-19, are allowed. Providers pursuing increased charges attributed to increased care costs should explicitly explain the reason for the increases in their written notice to residents and to the extent possible use the language of the proclamation in their explanation.
A provider should not just say that “rent” has increased due to increased operating costs and leave it at that. Rather, the provider should more explicitly outline the increased costs and explain the need for increased charges. Providers should make sure that cost increases due to changes in care costs or costs associated with COVID-19 can be explained. Providers should avoid disguising a rent increase as care-related costs if the care-related increase cannot be proven.
A better explanation would be that “due to increases in operating expenses, specifically, the increased costs of labor and overhead, it is necessary to increase our care charges by X%”. A provider making a statement similar to this should be prepared to show that care- related labor and overhead costs have indeed increased and that the increases that the provider is seeking are in line with the increases experienced by the provider. The more specifically a provider can explain what the care related increase are for, while showing that the increases are in line with increased care related costs, the better off the provider will be.
We will continue to fight for a further loosening of the AGO’s interpretation. Until we are successful, you can use the information outlined above as a guide. We will continue to keep you updated on this issue. If you have questions, please email WHCA CEO Robin Dale.