N.M. Code R. § 9.2.24.7 - DEFINITIONS

The following terms are used in this rule:

A. "affiliate" means a person (which is defined by the Continuing Care Act as an individual, corporation, partnership, trust, association or other legal entity) having a five percent or greater interest in a provider;

B. "ALTSD" means the aging and long-term services department;

C. "community" means a retirement home, retirement community, home for the aged or other place that undertakes to provide continuing care, such as a life plan community;

D. "continuing care" means furnishing, pursuant to a contract that requires entrance or advance fees and service or periodic fees, independent-living and health or health-related services. Entrance or advanced fees do not include security or damage deposit fees that amount to less than three months' service or periodic fees. These services may be provided in the community, in the resident's independent living unit or in another setting, designated by the continuing care contract, to an individual not related by consanguinity or affinity to the provider furnishing the care. The services include, at a minimum, priority access to a nursing facility or hospital either on site or at a site designated by the continuing care contract;

E. "cost of care" means the direct cost of providing medical care or health-related supportive services to residents;

F. "cost of operating the continuing care community" means the indirect cost of providing care to residents; it includes administrative costs, depreciation expenses, recurring and nonrecurring costs, ordinary and extraordinary costs, capital improvement and replacement costs, and all other costs associated with running a continuing care community, other than cost of care;

G. "economic necessity" means insolvency or circumstances where funds are lacking to maintain a reasonable level of service and care for residents, including the inability to meet loan or bond requirements, or having insufficient funds to comply with master trust indenture or a future service obligation, where, under GAAP accounting, the expenses are greater than future revenue;

H. "expenses" mean cost of care plus cost of operating the continuing care community;

I. "fees" or "assessments" mean entrance fees, deposits, monthly service fees and any other sum of money which a resident must pay to a provider;

J. "GAAP" means generally accepted accounting principles; it refers to a set of widely accepted accounting standards, set by the financial accounting standards board, and used to standardize financial accounting of public companies;

K. "gift income" means income from any gift or grant, or portion thereof, that is used to pay for or offset an expense;

L. "income" means all income received by a continuing care community during a reporting period; income includes operating income, investment income, gift income, and all other forms of income;

M. "investment income" means income received by a continuing care community on investments. Investment income does not include income on resident trust accounts;

N. "liquid reserves" means cash or other assets that are available within 60 days to satisfy a community's expenses and that do not include real property or interests in real property;

O. "net income" means income minus expenses;

P. "net operating expenses" means the total costs of operating a community, including taxes and insurance but not including amortization, depreciation or long-term debt service;

Q. "person" means an individual, corporation, partnership, trust, association or other legal entity;

R. "policy" is a deliberate system of guidelines to guide decisions and achieve rational outcomes. It is a statement of intent and is implemented as a procedure or protocol;

S. "provider" means the owner or manager of a community that provides, or offers to provide, continuing care;

T. "reserves" means capital set aside for future expenses and includes liquid reserves and other reserves;

U. "resident" means an actual or prospective purchaser of, nominee of or subscriber to a continuing care contract;

V. "return on investment" for a for-profit corporation means net income divided by the sum of common stock equity, preferred stock equity and long-term debt; for any other form of business enterprise, it means a ratio that is statistically equivalent to the return on investment for a for-profit corporation;

W. "type A agreement" means, as defined in Subsection K of Section 24-17-3 NMSA 1978, an extensive entrance-fee contract that includes housing, residential services, amenities and unlimited specific health-related services with little or no substantial increase in monthly payments, except to cover normal operating costs and inflation adjustments; and

X. "type B agreement" means, as defined in Subsection L of Section 24-17-3 NMSA 1978, a modified entrance-fee contract that includes housing, residential services, amenities and a specific amount of health care with no substantial increase in monthly payments, except to cover normal operating costs and inflation adjustments. After the specified amount of health care is used, persons served pay either a discounted rate or the full per diem rates for required health care services.

Notes

N.M. Code R. § 9.2.24.7

9.2.24.7 NMAC - N, 1/31/06, Adopted by New Mexico Register, Volume XXXIII, Issue 14, July 26, 2022, eff. 7/26/2022