Amended in Senate May 5, 2015

Amended in Senate April 20, 2015

Amended in Senate April 7, 2015

Senate BillNo. 648


Introduced by Senator Mendoza

(Coauthor: Assembly Member Levine)

February 27, 2015


An act to amend Sections 1400, 1401, and 1404 of, and to add Sections 1402, 1409.4, 1409.6, 1409.7, and 1409.8 to, the Health and Safety Code, relating to health and care facilities.

LEGISLATIVE COUNSEL’S DIGEST

SB 648, as amended, Mendoza. Health and care facilities: referral agencies.

Existing law requires a referral agency to obtain a license from the State Department of Public Health in order to refer a person to any extended care facility, skilled nursing home, or intermediate care facility. Existing law exempts a local public agency performing referral services without cost from these provisions. Under existing law, a violation of these provisions is subject to a civil penalty and suspension or revocation of the license.

This bill would additionally require a referral agency to obtain a license in order to refer a person to a residential care facility for the elderly. The bill would prohibit a referral agency from holding any power of attorney or any other property of abegin delete client, andend deletebegin insert person receiving referral services, or from disclosing any personal information of a person receiving services, unless expressly authorized to do so. The billend insert would require a referral agency to providebegin delete specified written noticeend deletebegin insert a disclosure statement, as specified,end insert to each person receiving itsbegin delete services.end deletebegin insert services, and to retain, for 4 years, a signed acknowledgment from the person being referred, or his or her conservator, guardian, family member, or agent under a power of attorney, stating that the disclosure statement was received. The bill would state that failure to provide the disclosure statement or retain the acknowledgment, with the intent to mislead the public on the nature of the services provided, constitutes unfair competition and is subject to a civil penalty of up to $2,500.end insert The bill would also require referral agencies to maintain liability insurance in specified amounts.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 1400 of the Health and Safety Code is
2amended to read:

3

1400.  

(a) It is unlawful for any person, association, or
4corporation to establish, conduct, or maintain a referral agency or
5to refer any person for remuneration to any extended care facility,
6skilled nursing home, intermediate care facility, or residential care
7facility for the elderly, or a distinct part of a facility providing
8extended care, skilled nursing home care, or intermediate care,
9without first having obtained a written license as provided in this
10chapter from the director or from an inspection service approved
11by the director pursuant to Section 1257.

12(b) It is unlawful for any person, association, or corporation to
13establish, conduct, or maintain a referral agency or to refer any
14person for remuneration to any person or agency outside a
15long-term health care facility, as defined in Section 1418, for
16professional services for which the long-term health care facility
17does not employ a qualified professional person to furnish a
18specific service, including, but not limited to, laboratory,
19diagnostic, or therapy services, unless the long-term health care
20facility complies with current federal and state laws regarding the
21provision of these services and all of the following conditions are
22met:

23(1) The services will be provided in accordance with
24professional standards applicable to the provision of these services
25in a long-term health care facility.

P3    1(2) The long-term health care facility assumes responsibility
2for timeliness of the services.

3(3) Services are provided or obtained only when ordered by the
4attending physician and a notation is made in the resident’s medical
5chart reflecting that the service has been provided to the resident.

6(c) It is unlawful for any person, association, or corporation to
7establish, conduct, or maintain a referral agency or to refer any
8person for remuneration to any residential care facility for the
9elderly for professional services if that facility does not meet the
10licensing standards established in Chapter 3.2 (commencing with
11Section 1560).

12

SEC. 2.  

Section 1401 of the Health and Safety Code is amended
13to read:

14

1401.  

As used in this chapter “referral agency” means a private,
15profit or nonprofit agency that is engaged in the business of
16referring persons for remuneration to any extended care facility,
17skilled nursing home, intermediate care facility, or residential care
18facility for the elderly, or a distinct part of a facility providing
19extended care, skilled nursing home care, or intermediate care.begin insert A
20residential care facility for the elderly is not a referral agency if
21it does either of the following:end insert

begin insert

22(a) Provides discounts or other remuneration to residents or
23their families for referring new or prospective clients.

end insert
begin insert

24(b) Provides remuneration to staff for marketing or sales offers.

end insert
25

SEC. 3.  

Section 1402 is added to the Health and Safety Code,
26to read:

27

1402.  

“Residential care facility for the elderly” has the same
28meaning as set forth in Section 1569.2.

29

SEC. 4.  

Section 1404 of the Health and Safety Code is amended
30to read:

31

1404.  

No licensee under this chapter shall have a direct or
32indirect financial interest in any facility doing business with the
33licensee.

34

SEC. 5.  

Section 1409.4 is added to the Health and Safety Code,
35to read:

36

1409.4.  

(a) begin deleteA end deletebegin insertPrior to any referral, a end insertlicensee shall provide
37each person receiving services from the licensee withbegin delete written
38notice, in 16-point bold type, ofend delete
begin insert a disclosure statement containingend insert
39 all of the following:

P4    1(1) Whether the licensee has an agreement or contract with the
2facility to which the person is being referred.

3(2) That a commission or fee will be received by the licensee
4from the facility as a result of the referral, if applicable.

5(3) Any gift or exchange of monetary value between the facility
6and the licensee that is in addition to, or in lieu of, a commission
7or fee.

8(4) Any fee charged to the person or persons by the licensee.
9The notice shall include a description of the services being rendered
10for that fee and the licensee’s refund policy.

11(5) The licensee’s contact information, including address and
12telephone number, and the licensee’s privacy policy.begin delete The privacy
13policy shall be placed clearly and prominently at the front of the
14written notice.end delete
begin insert The privacy policy may be provided as an Internet
15Web site link consistent with provisions set forth in Section 22575
16of the Business and Professions Code.end insert

17(6) The date of the licensee’s most recent tour or visit to the
18facility and, as appropriate, abegin delete review or summary ofend deletebegin insert report of any
19violations as identified byend insert
the most recent evaluation report for a
20residential care facility for the elderly prepared pursuant to Section
211569.33.

22(7) Information regarding the services the referred facility offers,
23including, but not limited to, intermittent skilled nursing care,
24memory care, assistance with and distribution of medication, and
25other services, if applicable.

26(8) The contact information, including address and phone
27number, of the State Department of Social Services or State
28Department of Public Health, as appropriate, and the contact
29information for filing consumer complaints, including contact
30information for the local long-term care ombudsman.

begin insert

31(b) (1) The disclosure statement shall be dated and shall
32contain, in addition to the requirements of subdivision (a), the
33name of the person being referred.

end insert
begin insert

34(2) If the disclosure is provided in written form, it shall be
35printed in 16-point bold type.

end insert
begin insert

36(3) If the disclosure statement is provided electronically, it shall
37be consistent with provisions regarding electronic records set forth
38in Section 7001 of Title 15 of the United States Code, and shall be
39displayed on the licensee’s Internet Web site in a larger type than
40the surrounding text.

end insert
begin delete

P5    1(b)

end delete

2begin insert(c)end insert The licensee shall provide thebegin delete written notificationend deletebegin insert disclosure
3statementend insert
pursuant to subdivision (a) in the same language in which
4the licensee negotiates any referral services with the person
5receiving services.

begin delete

6(c) The

end delete

7begin insert(d)end insertbegin insertend insertbegin insertPrior to any referral, theend insert licensee shall retain a signed
8acknowledgment from the person being referred, or his or her
9conservator, guardian, family member, or agent under a power of
10attorney, stating that thebegin delete written noticeend deletebegin insert disclosure statementend insert
11 required by this section was received. Thebegin delete acknowledgmentend deletebegin insert signed
12acknowledgment shall be executed with one of the following:end insert

begin insert

13(1) The signature of the person being referred, or his or her
14conservator, guardian, family member, or agent under a power of
15attorney on the exact disclosure statement.

end insert
begin insert

16(2) An electronic signature that includes the date, time, and
17Internet provider address and displays the exact disclosure
18statement document.

end insert
begin insert

19(3) A faxed confirmation that includes the date, time, and fax
20number and displays the exact disclosure statement document.

end insert

21begin insert(e)end insertbegin insertend insertbegin insertThe acknowledgment required by this sectionend insert shall be
22retained for a period of no less than four years.

begin insert

23(f) If the disclosure statement, or any other referral-related
24document, is provided electronically, the licensee shall provide a
25written copy, in a 16-point bold type, to the person being referred,
26or his or her conservator, guardian, family member, or agent under
27power of attorney following any referral. This written copy may
28be provided by fax, if applicable.

end insert
begin insert

29(g) Any violation of this section with the intent to directly or
30indirectly mislead the public on the nature of services provided
31by the referral agency will constitute unfair competition which
32includes unlawful, unfair, or fraudulent business acts or practices
33and unfair, deceptive, untrue, or misleading advertising. Any
34person or entity that engages in unfair competition shall be liable
35for a civil penalty not to exceed two thousand five hundred dollars
36($2,500) for each violation.

end insert
37

SEC. 6.  

Section 1409.6 is added to the Health and Safety Code,
38to read:

39

1409.6.  

begin insert(a)end insertbegin insertend insertIt is unlawful for a licensee to share any personal
40information, including, but not limited to, the name, address, age,
P6    1gender, or medical information of the person receiving services
2from the licensee, with any unauthorized person or third-party
3affiliate of thebegin delete licensee.end deletebegin insert licensee, unless expressly authorized
4pursuant to subdivisions (b) and (c).end insert

begin insert

5(b) The person being referred, or his or her conservator,
6guardian, family member, or agent under power of attorney may
7expressly authorize the licensee to share his or her name and
8telephone number, or email address, with the facility, or facilities,
9being referred. The express authorization shall be separate from
10the disclosure statement required by this article and shall include
11both of the following:

end insert
begin insert

12(1) Disclosure, in a form consistent with the requirements of
13Section 1409.4, which clearly and conspicuously states the name,
14location, and contact information of the facility, or facilities, that
15will receive the contact information, and the format in which the
16facility will receive the contact information.

end insert
begin insert

17(2) The signature of the person giving authorization, consistent
18with the requirements of subdivision (d) of Section 1409.4.

end insert
begin insert

19(c) The licensee shall only share the name and contact
20information of the individual who has provided express
21authorization, pursuant to subdivision (b).

end insert
22

SEC. 7.  

Section 1409.7 is added to the Health and Safety Code,
23to read:

24

1409.7.  

It is unlawful for a licensee to hold any power of
25attorney for a person receiving placement referral services from
26that licensee, or to receive or hold a client’s property in any
27capacity.

28

SEC. 8.  

Section 1409.8 is added to the Health and Safety Code,
29to read:

30

1409.8.  

On and after July 1, 2016, all persons, associations, or
31corporations licensed pursuant to this chapter shall maintain
32liability insurance coverage in an amount of at least one million
33dollars ($1,000,000) per referred person and three million dollars
34($3,000,000) in the total annual aggregate, for negligent acts or
35omissions by the licensee.


CORRECTIONS:

Text--Page 4.




O

Corrected 5-13-15—See last page.     96