Here are the three truisms we are dealing with.
1. LCS has the right to set the amount of the increase al long as it does not violate our contract.
2. The Statutes require that LCS provide some form of justification to make an increase greater than the CPI increase, but do not in themselves bar LCS from making any amount of increase.
3. The Contract assigns a Cap (maximum) amount which LCS may not exceed.
This Cap is equal to CPI plus up to 2%.
This makes it clear that to stop LCS from adding 2%, we must insure that this year's Cap is less than CPI plus 2%. (Because we have no power to stop them from going all the way up to the "Cap".)
Cap on Monthly Fee Increases from Contract
In simple terms,
The maximum increase equals CPI plus up to 2%.
(Notice that this is not the same as saying maximum is CPI plus 2%.)
Let's make this clear with an example:
Suppose this year's CPI increase turns out to be 2.35%
The maximum increase for 2026 would be a number that is within the range 2.35% to 4.35%.
So the contract does not give us an actual number for the maximum, it just tells us the range. Nor does it provide any directions on how we are to determine the exact number each year. At first this might appear to doom our efforts, but in fact it is our one ray of hope.
Confusing isn't it. The contract tells us the Cap lies within a certain range, but it doesn't tell us how to determine exactly where in the range it is.
But it is this confusing point that gives us our opportunity.
First look at how PEAK/LCS deals with this.
They act like there is no confusion, and that the contract has given them a Cap of CPI plus 2%. In other words, they just ignore the "up to 2%" phrase. Not just in conversation, but in the official letter they send us each year they misrepresent what the contract really says, by writing
"Based on the Residency Care Agreement, your Basic Service Rate is subject to an annual increase of the greater of CPI plus 2%."
Finally, this is how we might be able to use the contract to our advantage.
At some point LCS will tell us what number they propose for the annual increase. (this might be at the third quarter financial report meeting when they have already sent us our letters , or it might be at an earlier meeting to which they have invited our Designated Resident Representative).
As soon as we see they are proposing CPI plus 2%, we should tell them courteously that we don't accept their proposal because it appears they are exceeding the contractual Cap. Next we should request the supporting data for the "reasons" they have used to justify the increase. If we can ever get them to start talking about these "reasons" it will be to our benefit; since we really do not believe their reasons are valid enough to justify a 2% add-on, we should be able to show them why.