Business man showing thumbs down
(Credit: Tero Vesalainen / Getty Images)

An Alabama judge has dismissed a continuing care retirement community’s lawsuit against a state public health agency that was filed after the agency threatened action against third-party hospice providers delivering services to independent living residents there.

Huntsville Senior Services, operating as Regency Retirement Village of Huntsville, sued the Alabama Department of Public Health in October after the state threatened to take action against hospice providers for delivering care at an “unlicensed facility.” 

Tuesday, Burke dismissed Huntsville Senior Services’ lawsuit against the agency, saying that the provider did not prove its case.

The court ruled that Huntsville Senior Services’ “alleged injuries are the mere consequence of state action directed toward the hospice providers,” and that any effect on its independent living lease agreements is “purely incidental.” 

A representative for Regency Retirement Village told McKnight’s Senior Living that it was disappointed in the dismissal, adding that the state’s position “has statewide ramifications for the senior citizens in this state.” 

“We hope that other affected operators — including independent living, hospice and home health providers — will take note of this and join in our efforts to change these enforcement practices,” the Regency Retirement Village spokesperson said. “Although we share the department’s concerns about unlicensed facilities under the Alabama statute, independent living facilities should continue to be an option in Alabama, and Regency remains committed to offering senior citizens in this state the widest possible choice of housing opportunities to meet their needs.”

The spokesperson also said that the ruling leaves Regency without a remedy to the state’s “unilateral decision to declare an independent living facility a hospital.”

“It is concerning to us that the department’s position would require any independent living in the state of Alabama to refuse admission to individuals based solely on their need for assistance with activities of daily living,” the Regency representative said. “Regency is operating within the confines of the current law and disputes the department’s contention that it is operating as a hospital simply because some of its independent living residents contract with third parties to receive assistance with activities of daily living or hospice services.”

A disagreement over licensing

Under Alabama law, an assisted living community is considered a “hospital” and requires licensure. Regency claims that its independent living is “functionally and legally the same as any other privately owned multifamily residential apartment community.” The Alabama public health agency, on the other hand, called Regency’s independent living community a “thinly veiled” assisted living community without the required licensure to provide hospice services.

The state issued a statement of deficiencies and plan of correction to two licensed hospice providers, saying that those service contracts with residents “constitute unlawful delivery of licensed services in an ‘unlicensed facility.’ ” 

According to Huntsville Senior Services’ lawsuit, the state also demanded that Regency evict all independent living tenants receiving hospice care or any level of activities of daily living support and screen future applicants regarding their need for such services. Prospective residents requiring assistance with daily living activities should be rejected, according to the state, and current residents who later require those services should be transferred to facilities providing higher levels of care.

Regency argued it provides neither hospice care nor assistance with daily living activities to its independent living residents, who contract with third-party providers.

Those hospice providers notified independent living residents of their intent to stop providing services, and other service providers refused to work with independent living residents after the state labeled it an “unlicensed facility,” according to Regency.

In its lawsuit, Huntsville Senior Services claimed that it was denied due process and that designating it as an unlicensed facility deprived it of its “liberty and property interests, including its interest in its contractual independent living lease arrangements.” 

Huntsville also alleged that compliance with the state’s demands would require it to commit disability discrimination in violation of the Fair Housing Act.