The Vermont Statutes Online

Title 33: Human Services

Chapter 071: Regulation of Long-Term Care Facilities

• Subchapter 001: GENERAL PROVISIONS

• § 7101. Policy

  The purpose of this chapter is to provide for the development, establishment, and enforcement of standards for the construction, maintenance, operation, provision of receivership, and dissolution of long-term care facilities in which medical, nursing, or other care is rendered, which will promote safe surroundings, adequate care, and humane treatment; safeguard the health of, safety of, and continuity of care to residents; and protect residents from the adverse health effects caused by abrupt or unsuitable transfer of such persons cared for in these facilities. (Amended 2009, No. 36, § 1.)

• § 7102. Definitions

  As used in this chapter:

  (1) “Assisted living residence” means a program that combines housing, health, and supportive services for the support of resident independence and aging in place. Within a homelike setting, assisted living units offer, at a minimum, a private bedroom, private bath, living space, kitchen capacity, and a lockable door. Assisted living promotes resident self-direction and active participation in decision making while emphasizing individuality, privacy, and dignity.

  (2) “Facility” means a residential care home, nursing home, assisted living residence, home for persons who are terminally ill, or therapeutic community residence licensed or required to be licensed pursuant to the provisions of this chapter.

  (3) “Home for persons who are terminally ill” means a place providing services specifically for three or more people who are dying, including room, board, personal care, and other assistance for the residents’ emotional, spiritual, and physical well-being.

  (4) “Licensee” means any person, other than a receiver appointed under this chapter, which is licensed or required to be licensed to operate a facility.

  (5) “Licensing agency” means the Agency of Human Services or the department or division within the Agency as the Secretary of Human Services may designate.

  (6) “Nursing care” means the performance of services necessary in caring for persons who are sick or injured that require specialized knowledge, judgment, and skill and meet the standards of nursing as defined in 26 V.S.A. § 1572.

  (7) “Nursing home” means an institution or distinct part of an institution that is primarily engaged in providing to its residents any of the following:

  (A) skilled nursing care and related services for residents who require medical or nursing care;

  (B) rehabilitation services for the rehabilitation of persons who are injured, have a disability, or are sick; or

  (C) on a 24-hour basis, health-related care and services to individuals who, because of their mental or physical condition, require care and services that can be made available to them only through institutional care.

  (8) “Owner” means the holder of the title to the property on or in which the facility is maintained.

  (9) “Resident” means any person who lives in and receives services or care in a facility.

  (10) “Residential care home” means a place, however named, excluding a licensed foster home, that provides, for profit or otherwise, room, board, and personal care to three or more residents unrelated to the home operator. Residential care homes shall be divided into two groups, depending upon the level of care they provide, as follows:

  (A) Level III, which provides personal care, defined as assistance with meals, dressing, movement, bathing, grooming, or other personal needs, or general supervision of physical or mental well-being, including nursing overview and medication management as defined by the licensing agency by rule, but not full-time nursing care; and

  (B) Level IV, which provides personal care, as described in subdivision (A) of this subdivision (10), or general supervision of the physical or mental well-being of residents, including medication management as defined by the licensing agency by rule, but not other nursing care.

  (11) “Therapeutic community residence” means a place, however named, excluding hospitals as defined by statute, that provides, for profit or otherwise, transitional individualized treatment to three or more residents with major life adjustment problems, such as a substance use disorder, psychiatric disability, or delinquency.

  (12) “Insolvent” means:

  (A) having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;

  (B) being unable to pay debts as they become due; or

  (C) being insolvent within the meaning of federal bankruptcy law. (Amended 1959, No. 27, §§ 1-3; 1965, No. 68, § 1; 1973, No. 153 (Adj. Sess.), § 1; 1975, No. 221 (Adj. Sess.), § 1; 1981, No. 99, § 1; 1983, No. 176 (Adj. Sess.), §§ 1, 2; 1985, No. 151 (Adj. Sess.), § 1; 1991, No. 208 (Adj. Sess.), § 1, eff. May 27, 1992; 1993, No. 114 (Adj. Sess.), § 1; 1997, No. 61, §§ 271b, 271c; 2009, No. 36, § 1; 2011, No. 79 (Adj. Sess.), § 32; 2011, No. 160 (Adj. Sess.), § 6, eff. May 17, 2012; 2013, No. 96 (Adj. Sess.), § 218; 2019, No. 118 (Adj. Sess.), § 1, eff. June 23, 2020; 2021, No. 20, § 351.)

• Subchapter 002: LICENSING OF LONG-TERM CARE FACILITIES

• § 7103. License

  (a) A person shall not operate a nursing home, assisted living residence, home for persons who are terminally ill, residential care home, or therapeutic community residence without first obtaining a license.

  (b) A person shall not operate a nursing home as defined in this chapter or as defined in 18 V.S.A. chapter 46 except under the supervision of an administrator licensed in the manner provided in 18 V.S.A. chapter 46.

  (c) Residents of a home for persons who are terminally ill shall receive necessary medical and nursing services, which may be provided through outside providers. (Amended 1959, No. 27, § 4; 1964, No. 6 (Sp. Sess.), § 1, eff. March 4, 1964; 1965, No. 68, § 2; 1969, No. 248 (Adj. Sess.), § 1, eff. April 1, 1970; 1973, No. 153 (Adj. Sess.), § 2; 1975, No. 221 (Adj. Sess.), § 8, eff. July 1, 1977; 1985, No. 151 (Adj. Sess.), § 2; 1993, No. 114 (Adj. Sess.), § 2; 1997, No. 61, § 271d; 2009, No. 36, § 1; 2013, No. 96 (Adj. Sess.), § 219.)

• § 7104. Application

  An application for a license shall be made annually to the licensing agency upon forms provided by it and shall contain such information as the licensing agency reasonably requires. (Amended 1965, No. 68, § 3; 1975, No. 221 (Adj. Sess.), § 2; 1991, No. 253 (Adj. Sess.), § 9.)

• § 7105. License requirements

  (a) Upon receipt of an application for license, the licensing agency shall issue a full license when it has determined that the applicant and facilities meet the standards established by the licensing agency. Licenses issued under this chapter shall expire one year after date of issuance or upon such uniform dates annually as the licensing agency may prescribe by rule. Licenses shall be issued only for the premises and persons named in the application and shall not be transferable or assignable. Licenses shall be posted in a conspicuous place on the licensed premises.

  (b) In its discretion, the licensing agency may issue a temporary license permitting operation of a nursing home, assisted living residence, therapeutic community residence, residential care home, or home for persons who are terminally ill for such period or periods and subject to such conditions as the licensing agency deems proper, but in no case shall a nursing home, assisted living residence, therapeutic community residence, residential care home, or home for persons who are terminally ill operate under a temporary license or renewal of a temporary license for a period exceeding 36 months.

  (c) An owner, licensee, or administrator shall disclose to the licensing agency any changes in the ownership interests in the company, ownership of any real property, management of the facility, or corporate structure that occur after the date the license is issued. The licensing agency may require the owner, licensee, or administrator to apply for a new license. (Amended 1959, No. 27, § 5; 1965, No. 68, § 4; 1973, No. 153 (Adj. Sess.), § 3; 1975, No. 221 (Adj. Sess.), § 3, eff. July 1, 1976, § 9, eff. July 1, 1977; 1985, No. 151 (Adj. Sess.), § 3; 1997, No. 61, § 271e; 1997, No. 155 (Adj. Sess.), § 54; 2009, No. 36, § 1; 2013, No. 96 (Adj. Sess.), § 220; 2021, No. 20, § 352.)

• § 7106. Variance

  (a) The licensing agency may grant a variance from the provisions of this chapter or a rule adopted pursuant to this chapter.

  (b) Variances may be granted upon determination that:

  (1) strict compliance would impose a substantial hardship on the licensee;

  (2) the licensee will otherwise meet the goal of the statutory provision or rule; and

  (3) a variance will not result in less protection of the health, safety, and welfare of the residents.

  (c) A variance shall not be granted from a provision of this chapter or a rule pertaining to residents’ rights. (Added 1985, No. 151 (Adj. Sess.), § 4; amended 2013, No. 131 (Adj. Sess.), § 88, eff. May 20, 2014.)

• § 7107. Unlicensed homes

  (a) The licensing agency shall adopt rules governing the identification of unlicensed residential care homes, nursing homes, assisted living residences, therapeutic community residences, and homes for persons who are terminally ill.

  (b) No physician, surgeon, osteopath, chiropractor, or physician assistant licensed, certified, or registered under the provisions of Title 26; resident physician, intern, or any hospital administrator in any hospital in this State; registered nurse, licensed practical nurse, medical examiner, psychologist, mental health professional, social worker, probation officer, police officer, nursing home administrator, or employee; or owner, operator, or employee of a facility shall knowingly place, refer, or recommend placement of a person to such a facility if that facility is operating without a license.

  (c) Any person listed in subsection (b) of this section who is licensed or certified by the State of Vermont or who is employed by the State or a municipality and who knows or has reason to believe that a facility is operating without the license required under this chapter shall report the facility and address of the facility to the licensing agency.

  (d) The licensing agency shall investigate any report filed pursuant to this section and conduct an inspection as provided in section 7108 of this title.

  (e)(1) Within 30 days following the date on which a license to operate any facility pursuant to this section is revoked or voluntarily relinquished, the operator shall obtain a new license or shall cause all of the residents in the facility to be moved promptly.

  (2) The facility shall be responsible for securing suitable alternative placements for the residents and shall be responsible for the cost of the planning for the transition and transportation of the residents to the alternative placements.

  (3) Failure to comply with this subsection may result in penalties being assessed against the operator, the owner, or the facility as provided for in section 7111 of this title. (Added 1985, No. 151 (Adj. Sess.), § 5; amended 1997, No. 61, § 271f; 2009, No. 36, § 1; 2013, No. 34, § 30a; 2013, No. 96 (Adj. Sess.), § 221; 2021, No. 20, § 353.)

• § 7108. Inspection; technical assistance

  (a) The licensing agency shall inspect a facility prior to issuing a license under this chapter.

  (b) The licensing agency may inspect a facility any time an inspection is authorized under this chapter and any other time it considers an inspection necessary to determine if a facility is in compliance with the provisions of this chapter or the rules adopted pursuant to this chapter.

  (c) Authorized inspectors shall at all times without notice have access to all such facilities.

  (d) The living quarters of the manager of a facility, for purposes of this chapter, may be subject to inspection only if the inspector has reason to believe the permissible capacity of the facility has been exceeded and only for the purpose of determining if such a violation exists. The inspector shall permit the manager to accompany the inspector on such an inspection.

  (e) Within the limits of resources available, the licensing agency may provide technical assistance, education, and information to facilities to assist them to come into or remain in compliance with the provisions of this chapter or the rules adopted pursuant to this chapter. The failure of the licensing agency to provide assistance under this subsection shall not relieve a facility from its duty to comply with provisions of this chapter or the rules adopted pursuant to this chapter. (Amended 1973, No. 153 (Adj. Sess.), § 5; 1975, No. 221 (Adj. Sess.), § 4; 1985, No. 151 (Adj. Sess.), § 6; 2013, No. 131 (Adj. Sess.), § 89, eff. May 20, 2014; 2021, No. 20, § 354.)

• § 7109. Investigation; complaint

  (a) The licensing agency may investigate whenever it has reason to believe a violation of this chapter or the rules adopted pursuant to this chapter has occurred.

  (b) A person who believes that a violation has occurred may file a complaint with the licensing agency. The licensing agency shall investigate any complaint filed unless it reasonably believes that the complaint is without merit. (Added 1985, No. 151 (Adj. Sess.), § 7.)

• § 7110. Violation; notice

  (a) If, as a result of an inspection or investigation, the licensing agency determines that a condition in the facility violates a rule or provision of this chapter, it shall prepare a written notice of violation, which shall state the following:

  (1) a description of each condition that constitutes a violation;

  (2) each rule or statutory provision alleged to have been violated;

  (3) the date by which the violation must be corrected;

  (4) sanctions the licensing agency may impose for failure to correct the violation or failure to provide proof of correction by the date specified;

  (5) the right to appeal the notice of violation as provided in section 7118 of this title; and

  (6) the right to apply for a variance as provided in section 7106 of this title.

  (b) The licensing agency may take immediate enforcement action when necessary to eliminate a condition that can reasonably be expected to cause death or serious physical or mental harm to residents or staff before it can be eliminated through the provisions of section 7111 of this title. A licensing agency taking such action shall explain that action and the reasons for it in the notice of violation. (Added 1985, No. 151 (Adj. Sess.) § 8; amended 2019, No. 118 (Adj. Sess.), § 2, eff. June 23, 2020.)

• § 7111. Enforcement; protection of residents

  (a) The licensing agency shall enforce the provisions of this chapter to protect residents of facilities.

  (b) The licensing agency may require a facility to take corrective action to eliminate a violation of a rule or provision of this chapter within a specified period of time. If the licensing agency does require corrective action, the following provisions shall apply:

  (1) The licensing agency may, within the limits of resources available to it, provide technical assistance to the facility to enable it to comply with the provisions of this chapter.

  (2) The facility shall provide the licensing agency with proof of correction of the violation within the time specified.

  (3) If the facility has not corrected the violation by the time specified, the licensing agency may take such further action as it deems appropriate under this section.

  (c)(1) The licensing agency may impose an administrative penalty against a facility for failure to correct a violation or failure to comply with a plan of corrective action for such a violation, as follows:

  (A) up to $5.00 per resident or $50.00, whichever is greater, for each day a violation remains uncorrected if the rule or provision violated was adopted primarily for the administrative purposes of the licensing agency;

  (B) up to $8.00 per resident or $80.00, whichever is greater, for each day a violation remains uncorrected if the rule or provision violated was adopted primarily to protect the welfare or the rights of residents; and

  (C) up to $10.00 per resident or $100.00, whichever is greater, for each day a violation remains uncorrected if the rule or provision violated was adopted primarily to protect the health or safety of residents.

  (2) The licensing agency may impose an administrative penalty against a facility of up to $10.00 per resident or $100.00, whichever is greater, for each day a facility operates without a license when either:

  (A) the facility has not obtained a license; or

  (B) a license has been revoked or voluntarily relinquished and the operator fails to obtain a new license or to cause all of the residents to be moved promptly and appropriately.

  (3) For purposes of imposing administrative penalties under this subsection, a violation shall be deemed to have first occurred as of the date of the notice of violation.

  (d) The licensing agency may, after notice and an opportunity for a hearing, suspend, revoke, modify, or refuse to renew a license upon any of the following grounds:

  (1) violation by the licensee of any of the provisions of this chapter or the rules adopted pursuant to this chapter;

  (2) conviction of a crime for conduct that demonstrates the unfitness of the licensee or the principal owner to operate a facility under this chapter;

  (3) conduct inimical to the public health, morals, welfare, and safety of the people of the State of Vermont in the maintenance and operation of the premises for which a license is issued;

  (4) financial incapacity of the licensee to provide adequate care and services; or

  (5) failure to comply with a final decision or action of the licensing agency.

  (e) In the interest of the public health and safety, and pursuant to the provisions for the summary suspension of a license in 3 V.S.A. § 814(c), the licensing agency shall suspend the license of a nursing home that has been administered by a provisional administrator licensed under 18 V.S.A. § 2061 for the preceding 90 days and which nursing home is not presently administered by an administrator who is permanently licensed under 18 V.S.A. § 2055.

  (f) The licensing agency may suspend admissions to a facility or transfer residents from a facility to an alternative placement, or both, for a violation that may directly impair the health, safety, or rights of residents or for operating without a license. Residents subject to transfer shall:

  (1) be allowed to participate in the decision-making process of the agency concerning the selection of an alternative placement;

  (2) receive adequate notice of a pending transfer; and

  (3) be allowed to contest their transfer in accordance with the procedures in section 7118 of this title.

  (g) The licensing agency, the Attorney General, or a resident may bring an action for injunctive relief against a facility in accordance with the Rules of Civil Procedure to enjoin any act or omission that constitutes a violation of this chapter or rules adopted pursuant to this chapter.

  (h) The Commissioner of Disabilities, Aging, and Independent Living, the Attorney General, or a resident or a resident’s legal representative may bring an action as provided for in subchapter 4 of this chapter.

  (i) The licensing agency may enforce a final order by filing a civil action in the Superior Court in the county in which the facility is located, or in Washington Superior Court.

  (j) The remedies provided in this chapter are cumulative. (Added 1985, No. 151 (Adj. Sess.), § 9; amended 2009, No. 36, § 1; 2011, No. 63, § E.329.1; 2021, No. 20, § 355; 2021, No. 105 (Adj. Sess.), § 626, eff. July 1, 2022.)

• § 7112. Confidential information

  (a) Information received by the licensing agency through filed reports, inspection, or as otherwise authorized under this chapter, except information that pertains to unsubstantiated complaints or the identity of residents and complainants, shall be made available to the public.

  (b) Prior to release of information, the Commissioner shall consult with representatives from the nursing home industry and the Office of State Long-Term Care Ombudsman to develop:

  (1) Guidelines for the release of information to the public that ensure the confidentiality and privacy of complainants and individuals who are receiving or have received care or services in nursing facilities in conformance with State and federal requirements.

  (2) Indicators, derived from information databases maintained by the licensing agency and the Division of Rate Setting, which shall be disseminated to consumers in a readily understandable format designed to facilitate consumers’ ability to compare the quality of care provided by nursing facilities. The Commissioner shall continually update quality indicators and refine and improve the information disseminated to consumers. (Added 2011, No. 63, § E.329.2.)

• § 7113. Repealed. 2009, No. 36, § 1.

• § 7114. Report

  The licensee shall file annually and on request such information, data, statistics, or schedules as the licensing agency may require. The agency shall have the power to examine the books and accounts of any facility operated by any licensee if it is the opinion of the Secretary that the examination is necessary to carry out the purposes of this chapter. (Amended 1975, No. 221 (Adj. Sess.), § 5.)

• § 7115. Exception

  Nothing in this chapter or the rules adopted pursuant to this chapter shall be construed as authorizing the supervision, regulation, or control of the remedial care or treatment of residents or patients in any home or institution conducted for those who rely upon treatment by prayer or spiritual means in accordance with the creed or tenets of a recognized church or religious denomination, except as to the sanitary and safe condition of the premises, cleanliness of operation, and its physical equipment. (Amended 2021, No. 20, § 356.)

• § 7116. Criminal penalty

  A person who knowingly violates the licensure, reporting of unlicensed facilities, or confidentiality requirements of this chapter or the provisions relating to placing, referring, or recommending placement of a person in an unlicensed facility shall be fined not more than $500.00 or imprisoned not more than six months, or both. (Amended 1959, No. 27, § 6; 1964, No. 6 (Sp. Sess.), § 2, eff. March 4, 1964; 1973, No. 153 (Adj. Sess.), § 6; 1985, No. 151 (Adj. Sess.), § 11; 2013, No. 131 (Adj. Sess.), § 90, eff. May 20, 2014.)

• § 7117. Rules

  (a) In accordance with 3 V.S.A. chapter 25, the Secretary of Human Services may adopt reasonable rules to carry out the provisions of this chapter and may prescribe minimum standards of care, program administration, and sanitation for facilities licensed under this chapter.

  (b) No later than January 1, 1997, the Secretary of Human Services shall adopt comprehensive rules for licensing of nursing homes to include criteria deemed appropriate by the Secretary, including criteria for accessibility, quality, and safety standards. The rules for nursing home licensing shall:

  (1) require that nursing facilities provide the care and services necessary to help each resident attain or maintain the highest practicable physical, mental, and psychosocial well-being in accordance with a comprehensive assessment and plan of care and prevailing standards of care as determined by the Commissioner of Disabilities, Aging, and Independent Living; and

  (2) promote a standard of care that ensures that the ability of each resident to perform activities of daily living does not diminish unless the resident’s ability is diminished solely as a result of a change in the resident’s clinical condition. (Added 1973, No. 153 (Adj. Sess.), § 7; amended 1975, No. 221 (Adj. Sess.), § 6; 1981, No. 99, § 2; 1995, No. 160 (Adj. Sess.), § 18; 2013, No. 131 (Adj. Sess.), § 91, eff. May 20, 2014.)

• § 7118. Appeals

  (a) A person aggrieved by a decision or action of the licensing agency may file a request for a fair hearing with the Human Services Board as provided in 3 V.S.A. § 3091.

  (b) A resident subject to transfer under subsection 7111(f) of this title may contest such transfer by filing a request for a fair hearing with the Human Services Board as provided in 3 V.S.A. § 3091. (Added 1973, No. 153 (Adj. Sess.), § 8; amended 1985, No. 151 (Adj. Sess.), § 12.)

• Subchapter 003: HEALTH CARE SERVICES

• § 7151. Advanced practice registered nurse; scope of practice

  Except to the extent prohibited under federal law for purposes of federal financial participation, a nursing home shall permit a licensed advanced practice registered nurse providing services at the nursing home to perform all services within the advanced practice registered nurse’s scope of practice, including:

  (1) when providing primary care services, serving as the primary care provider of record;

  (2) performing acts of medical diagnosis, including ordering and interpreting diagnostic tests and procedures;

  (3) prescribing medications;

  (4) prescribing medical, therapeutic, and corrective measures;

  (5) initiating written and verbal orders to other health care providers; and

  (6) managing and evaluating care. (Added 2017, No. 48, § 34, eff. May 23, 2017.)

• Subchapter 004: RECEIVERSHIP PROCEEDINGS

• § 7201. Policy

  The purpose of this subchapter is to provide for the receivership of a long-term care facility in order to ensure safe surroundings, adequate care, and humane treatment; to safeguard the health of, safety of, and continuity of care to residents; and to protect residents from the adverse health effects caused by abrupt or unsuitable transfer of such persons cared for in these facilities. (Added 2009, No. 36, § 2.)

• § 7202. Application for receiver

  (a) The Commissioner of Disabilities, Aging, and Independent Living or the Attorney General may file a complaint in the Superior Court of the county in which the licensing agency or the facility is located, requesting the appointment of a receiver when:

  (1) a licensee intends to close and has not secured suitable placements for its residents at least 30 days prior to closure;

  (2) a situation; a physical condition; or a practice, method, or operation that presents imminent danger of death or serious physical or mental harm to residents exists in a facility, including imminent or actual abandonment of a facility;

  (3) a facility is in substantial or habitual violation of the standards of health, safety, or resident care established under State rules or federal regulations to the detriment of the welfare of the residents or clients;

  (4) the facility is insolvent; or

  (5) the licensing agency has suspended, revoked, or modified the existing license of the facility.

  (b)(1) A resident or resident’s representative may petition the licensing agency or the Attorney General to seek a receivership under this section. If the licensing agency or Attorney General denies the petition or fails to file a complaint within five days, the party bringing the petition may file a complaint in the Superior Court of the county in which the licensing agency or the facility is located, requesting the appointment of a receiver on the same grounds listed in subsection (a) of this section. Prior to a hearing for the appointment of a receiver, the Commissioner of Disabilities, Aging, and Independent Living shall file an affidavit describing the results of any investigation conducted, including a statement of findings with respect to the resident’s petition and the reasons for not filing an action under this section. The Commissioner shall include the two most recent reports of deficiencies in the facility, if any.

  (2) If the court finds the grounds listed in subsection (a) of this section are not met, the court may dismiss the complaint without a hearing as provided for in the Vermont Rules of Civil Procedure.

  (c)(1) The licensing agency shall be deemed a necessary party under Rule 19(a) of the Vermont Rules of Civil Procedure. A temporary receiver shall be a necessary party after the temporary receiver is appointed and shall remain a party until a receiver is appointed under section 7204 of this chapter. A receiver appointed under section 7204 of this chapter shall be deemed a necessary party under Rule 19(a) of the Vermont Rules of Civil Procedure.

  (2) The entity filing the complaint shall notify the State Long-Term Care Ombudsman and the mortgage holder upon filing of the complaint. (Added 2009, No. 36, § 2; amended 2021, No. 20, § 357.)

• § 7203. Appointment of temporary receiver

  (a) A motion to appoint a temporary receiver may be filed with the complaint or at any time prior to the hearing on the merits provided for in section 7204 of this chapter. The motion shall be accompanied by an affidavit alleging facts necessary to show the grounds for the receivership and the necessity for appointing a temporary receiver prior to the hearing on the merits. A motion for prejudgment attachment under Rule of Civil Procedure 4.1(b)(3) may also be filed with the complaint or at any time prior to the hearing on the merits.

  (b) The court may appoint a temporary receiver ex parte when the court finds that there is a reasonable likelihood that:

  (1)(A) a licensee intends to close the facility and has not secured suitable placements for its residents prior to closure; or

  (B) a situation; a physical condition; or a practice, method, or operation presents imminent danger of death or serious physical or mental harm to residents; and

  (2) the situation must be remedied immediately to ensure the health, safety, and welfare of the residents of the facility.

  (c) If the order for temporary receivership is granted, the complaint and order shall be served on the owner, licensee, or administrator and shall be posted in a conspicuous place in the facility no later than 24 hours after issuance. (Added 2009, No. 36, § 2.)

• § 7204. Appointment of receiver; notice

  (a)(1) Unless the complaint is dismissed as provided for in section 7202 of this chapter or parties agree to a later date, the court shall hold a hearing on the merits to appoint a receiver within 10 days of filing the complaint. The court shall hold a hearing on the merits even when the court has appointed a temporary receiver as provided for in section 7203 of this chapter.

  (2) Notice of the hearing shall be served on the owner, the licensee, the mortgage holder, the State Long-Term Care Ombudsman, and the licensing agency not less than five days before the hearing. If the owner or the licensee cannot be served, the court shall specify an alternative form of notice.

  (b) The licensee shall post notice of the hearing, in a form approved by the court, in a conspicuous place in the facility for not less than five days before the date of the hearing. (Added 2009, No. 36, § 2.)

• § 7205. Appointment of receiver; recommendations by licensing agency

  Not less than two days prior to the hearing on the merits, the Commissioner shall file with the court a list of recommended persons to consider for appointment as the receiver, which may include licensed nursing home administrators or other qualified persons with experience in the delivery of health care services and the operation of a long-term care facility. The list shall include a minimum of three recommended persons and shall include the names and the qualifications of the persons. (Added 2009, No. 36, § 2.)

• § 7206. Appointment of receiver; hearing and order

  (a) After the hearing on the merits, the court may appoint a receiver from the list provided by the licensing agency if it finds that one or more of the grounds set forth in section 7202 of this chapter is satisfied, and that the person is qualified to perform the duties of a receiver as provided for in section 7205 of this chapter. The court’s determination of whether one or more of the grounds set forth in section 7202 of this chapter is satisfied shall be based on the condition of the facility at the time the complaint requesting the appointment of a receiver was filed.

  (b) The court shall set a reasonable compensation for the receiver and may require the receiver to furnish a bond with surety as the court may require. Any expenditure, including the compensation of the receiver, shall be paid from the revenues of the facility.

  (c) The court may order limitations and conditions on the authority of the receiver provided for in section 7207 of this chapter. The order shall divest the owner and licensee of possession and control of the facility during the period of receivership under the conditions specified by the court.

  (d) An order issued pursuant to this section shall confirm on the receiver all rights and powers described in section 7207 of this chapter and shall provide the receiver with the authority to conduct any act authorized under this section, including managing the accounts, banking transactions, and payment of debts.

  (e) An order appointing a receiver under this chapter has the effect of a license for the duration of the receivership and of suspending the license of the licensee. The receiver shall be responsible to the court for the conduct of the facility during the receivership, and a violation of rules and regulations governing the conduct of the facility, if not promptly corrected, shall be reported by the licensing agency to the court. The order shall not remove the obligation of the receiver to comply with all relevant State rules and federal regulations applicable to the facility.

  (f) The court shall order regular accountings by the receiver at least semiannually. (Added 2009, No. 36, § 2; amended 2019, No. 118 (Adj. Sess.), § 3, eff. June 23, 2020; 2021, No. 20, § 358.)

• § 7207. Powers and duties of receiver

  (a) A receiver shall not take any actions or assume any responsibilities inconsistent with the purposes of this subchapter or the duties specifically provided for in this section.

  (b) Unless otherwise ordered by the court and subject to the limitations provided for in sections 7208 through 7211 of this chapter, the receiver appointed under this subchapter shall:

  (1) notify residents of the receivership and shall provide written notice by first-class mail to the last known address of the next of kin after the facility is placed in receivership;

  (2) operate the facility;

  (3) remedy the conditions that constituted grounds for the receivership;

  (4) remedy violations of State rules and federal regulations governing the operation of the facility;

  (5) protect the health, safety, and welfare of the residents, including the correction or elimination of any deficiency of the facility that endangers the safety or health of the residents;

  (6) preserve the assets and property of the residents, the owner, and the licensee;

  (7) hire, direct, manage, and discharge any employees, including the administrator or manager of the facility;

  (8)(A) apply the revenues of the facility to current operating expenses;

  (B) receive and expend in a reasonable and prudent manner the revenues of the facility due during the 30-day period preceding the date of appointment and becoming due thereafter; and

  (C) to the extent possible, apply the revenues of the facility to debts incurred by the licensee prior to the appointment of the receiver;

  (9) continue the business of the facility and the care of residents;

  (10) file monthly reports containing information as required by the licensing agency to the owner and the licensing agency; and

  (11) exercise such additional powers and perform such additional duties as ordered by the court. (Added 2009, No. 36, § 2; amended 2021, No. 20, § 359.)

• § 7208. Limitations; corrections of conditions

  (a)(1) Except as provided in subsection (b) of this section, if the total cost of correcting conditions that constituted grounds for the receivership and violations of State rules and federal regulations governing the operation of the facility or of other health and safety issues exceeds $5,000.00, the receiver shall notify the mortgage holder, licensee, and owner of the conditions needing correcting and the estimated amount needed to correct the condition.

  (2) The mortgage holder, owner, or licensee shall have five days from the date of mailing of the notice to apply to the court to determine the reasonableness of the expenditure by the receiver.

  (3) If the mortgage holder, owner, or licensee files a motion objecting to the corrections, the receiver shall not correct the conditions until ordered by the court.

  (b) If the condition constitutes a situation; physical condition; or a practice, method, or operation that presents imminent danger of death or serious physical or mental harm to residents and the estimate of the total cost of the correction exceeds $10,000.00, the receiver shall notify the mortgage holder, owner, and licensee who may object to the court as provided in subsection (a) of this section. The receiver may proceed with the corrections pending a hearing and order of the court. (Added 2009, No. 36, § 2; amended 2021, No. 20, § 360.)

• § 7209. Limitations; payment of debts

  The receiver shall petition the court when debts incurred prior to appointment of the receiver appear extraordinary, of questionable validity, or unrelated to the normal and expected maintenance and operation of the facility, or where payment of the debts will interfere with the purposes of the receivership. The court shall determine the order of priority of debts, with first priority given to expenditures for direct care of current residents. (Added 2009, No. 36, § 2.)

• § 7210. Limitations; authority to borrow

  (a) In the event that the receiver does not have sufficient funds to cover expenses needed to prevent or remove jeopardy to the residents or to pay the debts accruing to the facility, the receiver may petition the court for permission to borrow for these purposes.

  (b) Notice of the receiver’s petition to the court for permission to borrow must be given to the owner, the licensee, the mortgage holder, and the licensing agency.

  (c) The court may, after hearing, authorize the receiver to borrow money upon specified terms of repayment and to pledge security, if necessary, if the court determines that the facility should not be closed and that the loan is reasonably necessary to prevent or remove jeopardy, or if it determines that the facility should be closed and that the expenditure is necessary to prevent or remove jeopardy to residents for the limited period of time when they are awaiting transfer. (Added 2009, No. 36, § 2.)

• § 7211. Limitations; closure of the facility

  (a) The receiver shall not close the facility without leave of the court.

  (b) The court shall consider the protection of residents and shall prevent the closure of facilities that, under proper management, are likely to be financially viable. This section shall not be construed as a method of financing major repair or capital improvements to facilities that have been allowed to deteriorate because the owner or licensee has been unable or unwilling to secure financing by conventional means.

  (c) In ruling on a motion to close the facility, the court shall consider:

  (1) the rights and best interests of the residents;

  (2) the availability of suitable alternative placements;

  (3) the rights, interest, and obligations of the owner and licensee;

  (4) the licensure status of the facility; and

  (5) the need for the facility in the geographic area.

  (d) When a facility is closed, the receiver shall provide for the orderly transfer of residents to mitigate trauma caused by the transfer to another facility. (Added 2009, No. 36, § 2; amended 2021, No. 20, § 361.)

• § 7212. Writ of possession

  After notice and a hearing, the court may issue a writ of possession as provided for in 12 V.S.A. § 4854 on behalf of the receiver for specific real or personal property related or pertaining to the facility. (Added 2009, No. 36, § 2.)

• § 7213. Attachment; trustee process

  Revenues held by or owing to the receiver in connection with the operation of the facility are exempt from attachment as provided for in 12 V.S.A. chapter 123 and trustee process as provided for in 12 V.S.A. chapter 121, including process served prior to the institution of receivership proceedings. (Added 2009, No. 36, § 2.)

• § 7214. Avoidance of contracts

  (a) The court may grant a motion filed by the receiver to avoid a lease, mortgage, secured transaction, or other contract entered into by the owner or licensee of the facility if the court finds that the agreement:

  (1) was entered into for a fraudulent purpose or to hinder or delay creditors;

  (2) including a rental amount, price, or rate of interest, was unreasonable or excessive at the time the agreement was entered into; or

  (3) is unrelated to the operation of the facility.

  (b)(1) The receiver shall send notice of the motion to any known owners and mortgage holder of the property, the licensing agency, and the State Long-Term Care Ombudsman at the time of filing.

  (2) The court shall hold a hearing on the receiver’s motion to avoid a contract within 15 days.

  (c) If the receiver is in possession of real estate or goods subject to a contract or security interest that the receiver is permitted to avoid under this section and if the real estate or goods are necessary for the continued operation of the facility, the court may set a reasonable rental amount, price, rate of interest, or replacement contract term to be paid by the receiver during the term of the receivership.

  (d) Payment by the receiver of the amount determined by the court to be reasonable is a defense to an action against the receiver for payment or for the possession of the subject goods or real estate by a person who received notice.

  (e) Notwithstanding any provision of this section to the contrary, there shall not be a foreclosure or eviction during the receivership by any person if the foreclosure or eviction would, in view of the court, serve to defeat the purpose of the receivership. (Added 2009, No. 36, § 2; amended 2021, No. 20, § 362.)

• § 7215. Obligations of the owner or licensee

  (a) A licensee, owner, manager, employee, or such person’s agent shall cooperate with the receiver in any proceeding under this chapter, including replying promptly to any inquiry from the receiver or the licensing agency requesting a reply and making available to the receiver any books, accounts, documents, or other records or information or property pertaining to operation of the facility in his or her possession, custody, or control. A person shall not obstruct or interfere with the receiver in the conduct of any receivership.

  (b) This section shall not be construed to abridge otherwise existing legal rights, including the right to resist a petition for receivership or revocation or suspension of licensure.

  (c)(1) After notice of the receiver’s appointment, a person who fails to cooperate with the receiver or any person who obstructs or interferes with the receiver in the conduct of the receivership shall be assessed a civil penalty of not more than $10,000.00.

  (2) A person who violates this subsection may be subject to the revocation or suspension of a nursing home administrator’s license or a license to operate a facility. (Added 2009, No. 36, § 2.)

• § 7216. Review and termination

  (a) The court shall review the necessity of the receivership at least semiannually.

  (b) Either party or the Commissioner of Disabilities, Aging, and Independent Living may petition the court to terminate the receivership. The petition shall include a certification from the Commissioner or designee that the conditions that prompted the appointment have been corrected or, in the case of a discontinuance of operation, when the residents are safely relocated.

  (c) The petitioner shall send notice of the petition to terminate the receivership to the mortgage holder, the licensing agency, and the State Long-Term Care Ombudsman at the time of filing.

  (d) A receivership shall not be terminated in favor of the former or the new licensee unless that person assumes all obligations incurred by the receiver and provides collateral or other assurances of payment considered sufficient by the court.

  (e) At the time of termination of the receivership, the court shall lift the suspension or revoke the license of the licensee. (Added 2009, No. 36, § 2; amended 2021, No. 20, § 363.)

• § 7217. Duties of licensing agency

  The licensing agency shall have the duty to provide information to residents of long-term care facilities for which a receiver has been appointed by the court. When applicable, the licensing agency shall assist in the process of transferring residents to another long-term care facility, including providing information about facilities with available openings. (Added 2009, No. 36, § 2.)