Ministry of Long-Term Care

Long-Term Care Home Licensing FrameworkCapital Planning BranchFoundational BriefingSeptember 2020

Highlights of the Licensing ProgramThe foundation of the Licensing Framework is a legislated risk based assessment that underlays any licence or approval issued by the Ministry.

• The Long-Term Care Homes Act, 2007 (LTCHA) and Ontario Regulation 79/10 requires that all long-term care (LTC) beds be licensed or approved by the Ministry and also establishes the framework for this process.

• As of May 2020, there are 627 long-term care (LTC) homes in Ontario with approximately 78,890 beds.

• The Licensing Program is currently focused on:• Licensing activity relating to 210 LTC homes of which:

• 60% is attributed to creating new licensed capacity through re/development projects

• 40% relates to licence transfers, changes in controlling interest, temporary licences and licence amendments, management contracts, beds in abeyance, and specialized units

• Identifying measures that would reduce processing times to further support the Premier’s commitment to end hallway medicine and expand LTC by 15,000 in the next five years.

• Transformation of the licensing program to improve stakeholder confidence, align with Ontario’s Digitization Strategy and burden reduction efforts;

• Strategizing approaches to sustain bed capacity as the expiration of over 26,000 beds approaches in 2025.

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LTC Licences and ApprovalsThe Ministry is able to address immediate and longer-term capacity needs through distinct licensing approaches.

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Approval- Issued by the Minister-Authorizes premises to be used for a Municipal or First Nations Homes only for a specified # of beds-No fixed term-Cannot be transferred

Licence - Issued by the Director- Applies to for-profit and non-profit homes- Transferrable (subject to

Ministry approval)- Term of up to 30 years

Temporary Emergency Licence-Issued by the Director to any LTC home or stand alone - Used to authorize:1. Premises to be used as

a LTC home on a temporary basis

2. Temporary additional beds at a LTC home

- Term of up to 1 year

Temporary Licence-Issued by the Director to a LTC home or stand alone home-Used to authorize:1. Premises to be used as a

LTC home on a temporary basis

2. Temporary additional beds at a LTC home

- Term of up to 5 years and cannot be transferred.

Principles of the LTC Licensing FrameworkThe LTCHA, Regulation and related policies provide for a robust LTC licensing framework.

• A LTC Home Licence provides the Licensee with: 1. The rights to operate the home; and,2. A committed funding stream (under current Ministry funding policies); and, 3. The ability to monetize the licence by (transferring/selling the licence, subject to Ministry

approval)

all for up to 30 years (in accordance with the LTCHA and Regulation 79/10 and subject to Ministry approval where required.)

• The licensing framework enables a due diligence process to determine the competency of the Licensee to operate a LTC home without compromising the delivery of care and services to residents.

• At the core of the licensing framework are three key decision variables:1. An assessment of the competency of the Applicant/Licensee2. Public interest tests3. A decision by the Director to issue a licence

• These elements also ensure that the safety and security of residents, remains critical when deciding on the issuance of a licence.

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Licensing Framework – At A GlanceWith the exception of temporary emergency licences, the LTCHA stipulates the same approval requirements regardless of the scale or magnitude of activity.

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A licence or approval can only be issued by the Ministry once these requirements are met.

Changes to the ownership or controlling interest of a licence, location of beds, or management of a home, will trigger a licence review.

The Minister agrees that there is a need for beds in the area.

The Minister establishes that the impacts of concentration of ownership and sector balance are in the public interest.

The Director reviews the past conduct, operational and financial competency of the proposed licensee, including any individual with controlling interest in the licensee.

The Director has considered any feedback from a public consultation relating to the licensing proposal.

*See Appendix D for further information.

Licence Review Process

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Review process

Decision process

Public Consultations.106(if required)

Minister’s Determinations.96 and s.97- On the need for beds, sector balance and concentration of ownership

Director’s Determination s.98- Licensee Attestations-Financial Review-Review from: Legal Services Branch, LTC Inspections Branch, Financial Management Branch, Ontario Health Oversight Branch

For non-municipal homes, Director

Decision on Issuance of a Licence/ Undertaking

For municipal homes, the Minister’s decision on

undertaking or any municipal approvals.

Licence activity and requirements of the LTCHA vary by the type of LTC home provider: some or all of the activities below will be included in the ministry’s licence review process.

Applying the Licensing Principles during Pandemic

The Ministry is able to leverage provisions relating to temporary emergency licences and management contracts to support LTC Homes during the pandemic.

• Temporary emergency licences enable the Director to respond to needs for immediate LTC bed capacity for up to one year.

• As hospitals were preparing for an influx of COVID-19 related intakes, temporary emergency licences quickly enabled the creation of additional bed capacity and the subsequent transfer of ALC patients from hospitals to LTC homes.

• A total of 97 spaces were created in 69 LTC homes. • LTC homes identified unlicensed rooms or family rooms/palliative care rooms that could

be repurposed for resident accommodation.

• Management contracts• To date, 10 LTC homes engaged with hospitals for management of the home while in a

COVID related outbreak and for infection control support.• This represented the first time for hospitals to provide management services to LTC

homes.• Provisions in the emergency order enabled the Director to approve the management

agreement within days of Homes/Hospitals identifying a proposed management arrangement.

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LTC Licensing – Chronology of Pandemic Response ActionsWorking with LTC homes, LHINs and hospitals to enable capacity and professional expertise to LTC homes facing extreme Covid-19 challenges.

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Execution of agreements to approve management of 10 LTC homes by hospitals

May 29, 2020 - Jun 17, 2020

Mar 1, 2020Jun 30, 2020

Mar 16, 2020Commence outreach to

LHINs to identify unused LTC bed capacity

in LTC homes

Mar 22, 2020Commence outreach to LTC Licensees directly on potential additional capacity

identified by LHINs – Commence issuing temporary

emergency licences.

Apr 2, 2020LTC Capacity Form released to

sector (alongside Memo from Minister Fullerton)

for homes to pro-actively identify any unused capacity available

Jun 1, 2020Downsview and

Humber River Hospital

Jun 5, 2020Forest Heights and St. Mary's Hospital

Jun 4, 2020Camilla Care and

Trillium Health Partners

Jun 8, 2020Altamont and

Scarborough Health Network

Jun 17, 2020Woodbridge Vista Care and

William Osler

Jun 12, 2020Extendicare Guildwood and

Scarborough Health Network

Jun 13, 2020Orchard Villa and Lakeridge Health

Jun 16, 2020Eatonville and

Unity Health Centre

Jun 15, 2020Hawthorne and

North York General Hospital

May 29, 2020River Glen Haven and

Southlake Regional Health Centre

Mar 22, 2020 - Apr 23, 202097 temporary emergency licences

issued to 69 LTC homes May 29, 2020 - Jun 17, 2020Execution of agreements to approve management

of 10 LTC homes by hospitals

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LTC Home Temporary Emergency Capacity Form

LTC Licensing Priorities

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Context for TransformationThe current LTC sector landscape presents opportunities for the Ministry to move forward with changing how licensing reviews are conducted.

• Since 2010, Licensing, Policy and Development Branch (LPDB) has processed an estimated 2,940 licence related transactions.

• Stakeholders have expressed concern with the current process citing it is time intensive, not transparent, timelines are non-committal, and that application requirements are not consistent with the scope of the transaction (i.e. transferring 5 beds vs. building a new home).

• Stakeholder confidence during the development process may be low as the timing of Ministry approvals can adversely impact construction/building timelines.

• Through process improvement, LPDB has identified and implemented strategies that will better align the program with provincial priorities that focus on generating LTC capacity, eliminating hallway healthcare, improving stakeholder experience and reducing red tape.

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Licensing Transformation Roadmap

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Transformation of the licensing program relies on a critical analysis of each program, policy and process element to identify how it can be made more effective and efficient.

Continuous ImprovementThe Ministry continually reviews and refines the LTC Licensing Framework to meet the needs of internal and external stakeholders.

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Multi-Stream Licensing Review

• Evolving from a “one size fits all review model” to a “risk-based multi-stream licensing model” for LTC development projects, resulting in rapid progress for eligible low-risk LTC Projects from the LTC planning to building phase

• (See Appendix E).

Public Consultation Modernization

• Legislative amendment as of July 1, 2019 modernize the way the ministry seeks public feedback on licensing activities by allowing additional/alternative formats; and provide discretion to the Director to determine the best format for each individual circumstance.

Improving Transparencyand Licensee Experience

• Kick-off meeting with Licensee outlining the licence review process.

• Acknowledgement Letters sent to Licensee to clearly outline project details, required documents and next steps.

• Stakeholder feedback has centered on the length of approval processes, which is perceived as a barrier to moving capital projects from the planning to the building phase.

• Additional changes are being considered to further streamline the licensing review process including regulatory changes related to the requirement to consider LHIN input on licensing requests and minimizing administrative burden for the ministry and stakeholders (e.g. bed in abeyance, financial reviews - see Appendix D).

Improvements to Date

2025 Licence Expirations

2020 - 2021

Planning, data gathering and options

June 30, 2022

LTCHA Requirement: Three years before a licence expiration, the Ministry must provide notice of it’s intention to provide a new licence or not.

June 30, 2025

Licences for approximately 26,531 beds in 257 LTC Homes will expire.

The program area is identifying strategic options to mitigate risks of disruption to LTC care and capacity.

• Building on the ministry’s successful approach for licenses expiring in 2020, the Licensing, Policy & Development branch has initiated strategic planning for licenses expiring in 2025 with the aim of:

• Creating opportunity in the sector and strengthening sector partnerships;• Reallocating any LTC beds before they are expected to come out of operation in 2025; and• Ensuring the Ministry and sector’s legislative compliance while maintaining continuity and

quality care for all LTC residents in Ontario.

Critical Dates

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Appendices

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Appendix A: Licensing Sector Profile

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For-profit beds: 41,85657 %

Non-profit beds: 37,02843 %

For-profit LTC Homes: 35653 %

Non-profit LTC Homes: 27147 %

Sector BreakdownMarket Concentration

Market concentration is measured using the Herfindahl-Hirschman Index

(HHI) which is an indicator of competition within an industry.

Indexes

Appendix B - LTC Licence Term issued in 2010

• In accordance with the LTCHA, all LTC homes must be licensed or approved.

• A Licence can have a fixed term of up to 30 years.

• The terms of licences issued in July 2010 varied by the structural classification of the LTC home.

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Structural Classification* Term of Licence

New Beds** - Built since 1998 to current design standards 30 years**

A Beds** – Built prior to 1998, but almost meets current standards 25 years**

B Beds – Substantially exceed 1972 standards but do not meet A-bed criteria. 15 years

C Beds – Meets 1972 design standards 15 years

Upgraded D – Upgraded through the 2002 D Bed program but do not meet the 1972 design standards

10 years

D Beds – Do not meet 1972 design standards, and were not upgraded. Upon expiration, these beds did not receive a new licence unless they redeveloped to meet current design standards.

4 years

Note:* For the purpose of issuing licence terms in 2010, the LTCHA also outlined the term of a licence for homes with more than one structural classification, these are not reflected in the above table.** In January 2015, the LTCHA was amended and licence terms were extended by an additional five years for “New” and “A” subject to the requirements of the LTCHA (s.193.1)

Appendix C: Minister & Director Requirements for Licensing Activities

Licensing ActivityMinister’s Public

Interest Determination(s)

Public Meeting(s)/ Consultation

Director’s Determination of Eligibility of the Licensee/Applicant

Regular Licence Yes Yes Yes

Municipal/First Nation Approval

Yes (s. 96 only) Yes

No Note: Director provides the Minister with

input received from the LHIN and the Service Area Offices (for compliance and inspection information) to support the

Minister decision on issuing an Approval.

Temporary Licence Yes No Yes

Temporary Emerg.Licence No No

Yes

Acquisition of ControllingInterest Yes (s. 97 only) No Yes

Agreement to Approve a Management Contract

Yes (s. 97 only) No Yes

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Appendix D: Licensing Activities Requiring Ministry Approval

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Closing a LTC Home

Transfer a LTC home or beds under a LTC licence

Relocation of LTC home for redevelopme

nt

Transfer shares of a LTC home licensee

Hiring/ Retaining a

management company

Results in a change in

the licensee or location of

beds and reissuance or amendment of licence(s)

Results in a change in location of

the beds and requires

reissuance of licence/ approval

May results in a change

in controlling interest,

which requires approval

Management contracts require

approval

Activ

ityLi

cens

ing

Impl

icat

ions

New licence, change in

bed capacity or licence

term

Requires the issuance or amendment of a licence/ temporary

licence/ temporary emergency

licence

A Closure Agreement is

required with the ministry.

Approval is also required if the closure notice is less

than five years and before the

licence expiry.

The LTCHA requires the same approval processes regardless of the scale or magnitude of activity.

Appendix E: LTC Long-Stay and Short-Stay Program

• Long-Term Care homes can offer Long-Stay and Short-Stay Programs.

• Long-Stay and Short-Stay programs can be offered under all Approval and Licence Types (i.e. Approval, Licence, Temporary Licence, Temporary Emergency Licence, Short-Stay Authorization).

• The Act and Regulation outline specific requirements for each of the programs (e.g. admission criteria, wait list rules etc.)

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Program Usages Descriptions

Long-Stay Long-Stay Beds Created to enable occupancy by residents who need long-term care on a continuous basis.

Short-Stay Interim Beds Created to provide increased LTC capacity for Alternate Level of Care (ALC) patients (i.e., no longer require acute hospital care), and who are eligible for long-stay admission but are on a waiting list for a LTC home.

Convalescent Care Beds

Created for persons who need time to recover strength, endurance or functioning and who are expected to return to the community within 90 days.

Respite Beds Created for persons who have caregivers who require temporary relief from their caregiving obligations or persons who require temporary care in order to continue to reside in the community. Residents in respite beds are expected to return to their residences within 60 days after admission.

Refinements Current Status

1. Process: Modified financial reviews for public companies. First Pilot: Early 2018Implemented: April 2018

2. Process: Utilize previously submitted financial information in place of requesting all documents for subsequent financial reviews. Transition to requesting financial information in soft copy only. Implemented early 2018

3. Policy: Updated financial requirements for redevelopment projects • Removed provisions relating to disclosure of 3 highest salaries and insurance requirements• Removed requirement for accountant review of financial Projections to align with Canadian accounting

guidelines

Implemented May 2019

4. Process: Lender Support- consultations with lenders to explore potential overlap of analysis processes. Completed (May 2019)

5. Policy and Process: Consultations with Deloitte to identify areas of continuous improvement in the financial reviews. Ongoing

6. Policy: Further refinements to financial requirements• Remove requirements to disclose material credit agreements and to identify any risk of loss of charitable

status as these would be disclosed in audited financial statements.• Remove requirements to submit year to date financial statement.• Remove requirements to disclose occurrences of bankruptcy/insolvency and shift requirement to Deloitte to

perform bankruptcy search.• Remove calculation of ratios

Refresh the Financial Guidelines For Licensing Reviews to incorporate any changes from #3 and #5 above. (The Financial Guidelines are the detailed policy guidelines for licence transfers)

Completed January 2020

Target completion (June 2020

Appendix F: Financial Review Policy Refinements

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Evaluation of the financial framework is critical to ensure that it functions as efficiently as possible without compromising the level of risk assessment. This allows us to keep pace with internal and external trends.

Long-Term Care Home Licensing Framework�Highlights of the Licensing ProgramLTC Licences and ApprovalsPrinciples of the LTC Licensing FrameworkLicensing Framework – At A GlanceLicence Review ProcessApplying the Licensing Principles during PandemicLTC Licensing – Chronology of Pandemic Response ActionsSlide Number 9LTC Licensing �PrioritiesContext for TransformationLicensing Transformation Roadmap��Continuous Improvement2025 Licence ExpirationsAppendicesAppendix A: Licensing Sector ProfileAppendix B - LTC Licence Term issued in 2010Appendix C: Minister & Director Requirements for Licensing Activities Appendix D: Licensing Activities Requiring Ministry ApprovalAppendix E: LTC Long-Stay and Short-Stay ProgramAppendix F: Financial Review Policy Refinements