BILL ANALYSIS Ó
SB 648
Page 1
SENATE THIRD READING
SB
648 (Mendoza)
As Amended August 19, 2016
Majority vote
SENATE VOTE: 27-12
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Aging |4-1 |Brown, Gray, Levine, |Dahle |
| | |Lopez | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Appropriations |16-4 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte |
| | |Calderon, Chang, Daly, | |
SB 648
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| | |Eggman, Eduardo | |
| | |Garcia, Holden, Quirk, | |
| | |Santiago, Wagner, | |
| | |Weber, Wood, McCarty | |
| | | | |
| | | | |
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SUMMARY: Adds referrals to residential care facilities for the
elderly (RCFEs) to the body of law requiring anyone who refers
someone to a skilled nursing or intermediate care facility for
compensation to be licensed as a referral agency, and
establishes new requirements on referral agencies.
Specifically, this bill:
1)Adds referrals to RCFEs to the body of law requiring anyone
who refers someone to a skilled nursing or intermediate care
facility for compensation to be licensed as a referral agency.
2)Allows the State Department of Social Services and the
Department of Public Health to set an annual licensing and
certification fee at an amount no greater than the amount
required to cover the reasonable and actual cost of
administering the licensing program.
3)Specifies that the annual licensing and certification program
fee schedule set by the State Department of Social Services
must be submitted as part of its annual budget proposal to the
legislature no later than February 1 of each year, beginning
in 2017.
4)Prohibits a referral agency from referring any person to an
RCFE if that RCFE does not meet state licensing standards.
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5)Prohibits any extended care facility, skilled nursing home,
intermediate care facility, or a residential care facility for
the elderly from paying a commission or fee to a referral
agency that is not licensed.
6)Makes it unlawful for an employee, independent contractor, or
any other person acting on behalf of a governmental agency,
hospital, or other healthcare institution, including, but not
limited to, physicians, nurses, and social workers, to accept
a payment in the form of money or other consideration for
referring patients, clients, or customers to an RCFE or a
licensed referral agency.
7)Requires a referral agency to provide a disclosure statement
to each person receiving its services, and to retain, for
three years, a signed acknowledgment stating that the
disclosure statement was received. The disclosure statement
among other things must include:
a) Whether the referral agency has an agreement or contract
with the facility to which the person is being referred.
b) If a commission or fee will be received by the referral
agency from the facility as a result of the referral, if
applicable.
c) Any gift or exchange of monetary value between the
facility and the referral agency that is in addition to, or
in lieu of, a commission or fee.
d) Any fee charged to the person or persons by the referral
agency, and requires a notice to include a description of
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the services being rendered for that fee and the referral
agency's refund policy.
8)States that failure to provide the disclosure statement or
retain the acknowledgment, constitutes unfair competition
which includes unlawful, unfair, or fraudulent business acts
or practices and unfair, deceptive, untrue, or misleading
advertising and is subject to a civil penalty of up to $2,500.
9)Limits the personal information of a consumer that a referral
agency can share with other parties or from disclosing any
personal information of a person receiving services, unless
authorized to do so.
10)Prohibits a referral agency from holding any power of
attorney for a person receiving placement referral services,
or receiving or holding their property in any capacity.
11)Requires referral agencies to maintain liability insurance
coverage in an amount of at least $1 million per person
occurrence and $3 million in the total annual aggregate, for
negligent acts or omissions.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
Significant one-time costs to the Department of Social Services,
potentially exceeding $1 million General Fund to establish the
licensure program, as well as significant fee-supported ongoing
costs in the range of $1.5 million or higher. Estimates of
ongoing costs are subject to significant uncertainty due to the
varying size and complexity of referral agencies, uncertainty
about complaint volume, and number of licensees. If complaint
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volume is high or significant enforcement resources are
necessary, costs could be higher.
COMMENTS:
Author's statement: According to the author, "Elder care
referral agencies are mostly unregulated, in spite of the fact
that they can be deeply involved in the decision making of a
senior or their family when determining care options. Consumers
rely heavily on the advice and recommendations of referral
agencies, especially since seniors and their families typically
seek the assistance of a referral agency following a decline in
independence or a significant health event, which can be a
stressful and traumatic time. Given the significance of these
health and life decisions, California should ensure that
referral agencies are at least meeting minimal standards."
What are RCFEs: There are approximately 8,000 Assisted Living,
Board and Care, and Continuing Care Retirement homes that are
licensed as RCFEs in California. These residences are designed
to provide home-like housing options to residents who need some
help with activities of daily living, such as cooking, bathing,
or getting dressed, but otherwise do not need continuous,
24-hour assistance or nursing care. The RCFE licensure category
includes facilities with as few as six beds to those with
hundreds of residents, whose needs may vary widely. More than
90% of RCFEs in California are for-profit homes, the majority of
which are small facilities. Most residents pay privately or
with long-term care insurance, and fees can range from $1,500 to
more than $8,000 per month.
In recent years, there have been several high-profile incidents
and investigative articles that have drawn attention to
questions about the adequacy of Department of Social Services
(DSS) oversight of RCFEs. In July 2013, ProPublica and
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Frontline reporters wrote and produced a series of stories on
Emeritus, the nation's largest RCFE provider. Featured in the
stories was a woman who died after receiving poor care at a
facility in Auburn, California. The series documented chronic
understaffing and a lack of required assessments and substandard
care. In late October 2013, 19 frail seniors were abandoned at
Valley Springs Manor in Castro Valley by the licensee and all
but two staff after the state began license revocation
proceedings for the facility. DSS inspectors, noting the
facility had been abandoned, left the two unpaid service staff
to care for the abandoned residents with insufficient food and
medication, handing them a $3,800 citation before leaving for
the weekend. The next day sheriff's deputies and paramedics
sent the patients to local hospitals.
Previous Legislation:
AB 1863 (Jones) of 2014 would have established "domestic home
care aide referral organizations" as a new licensure category
under the Home Care Services Consumer Protection Act overseen by
the DSS, as specified.. AB 1863 was held in the Senate
Appropriations Committee.
SB 398 (Romero) of 2003 would have, among other things, made the
licensing and regulation provisions of the Employment Agency,
Employment Counseling, and Job Listing Services Act applicable
to health care employment agencies, as defined. SB 398 was held
in the Senate Appropriations Committee.
SB 70 (Murray) of 1999 would have established licensing and
regulations for residential care facilities for the elderly
referral agencies. SB 70 was held in the Assembly
Appropriations Committee.
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Analysis Prepared by:
Barry Brewer / AGING & L.T.C. / (916) 319-3990
FN:
0004636