SACRAMENTO – State Sen. Tony Mendoza has introduced legislation that would require elderly care referral agencies to disclose any financial interest shared with a care facility, including all fees, commissions received, and other financial benefits resulting from a placement. The bill would protect seniors and their families from elder care referral agencies that engage in “unscrupulous business practices,” the senator said.

It also would strengthen the licensing and financial disclosure requirements for the hundreds of referral agencies in California, he added.

“Seniors and their families who use these services have a right to know what financial relationships may be influencing the referral to a specific nursing home or long term care facility,” said Mendoza. “My bill requires a more transparent process so that seniors will be able to make a more informed decision about what long term care options are available.”

SB 648 also would:

require disclosure of how often a referral agency has inspected a facility

require the referral agency to protect the medical privacy of seniors by prohibiting the sharing of a client’s personal information

Require the referral agency to maintain liability insurance, and prohibits the referral agency from holding any power of attorney or property of a client.

Require a referral agency to visit a client within one month of placement

Add “residential care facility for the elderly” to the definition of referral agency for licensing purposes

In 2011, the state of Washington became the first state in the nation to regular elder placement referrals in response to an investigative report conducted by the Seattle Times.

The Times reported that some referral companies did not disclose the commissions they collected from facilities, oftentimes steering seniors to those facilities regardless of the patient’s needs.

Agencies have also referred patients to facilities with known histories of poor care and neglect.

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Published: March 19, 2015 - Volume 13 - Issue 49