BILL NUMBER: SB 648 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 26, 2016
AMENDED IN SENATE JANUARY 5, 2016
AMENDED IN SENATE MAY 5, 2015
AMENDED IN SENATE APRIL 20, 2015
AMENDED IN SENATE APRIL 7, 2015
INTRODUCED BY Senator Mendoza
(Coauthor: Assembly Member Levine)
FEBRUARY 27, 2015
An act to amend Sections 1400, 1401, 1404, and 1408
1404.5, 1405, 1407, 1408, 1409.3, and 1410 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 from the State Department of Social Services in
order to refer a person to a residential care facility for the
elderly. elderly and would prohibit an
extended care facility, skilled nursing home, intermediate care
facility, or residential care facility for the elderly from paying a
commission or fee to a referral agency that is not licensed, as
specified. The bill would prohibit a referral agency from
holding any power of attorney or any other property of a person
receiving referral services, or from disclosing any personal
information of a person receiving services, unless authorized to do
so. The bill would require a referral agency to provide a disclosure
statement, as specified, to each person receiving its services, and
to retain, for 3 years, a signed the
acknowledgment from the person being referred, or his or her
conservator, guardian, authorized 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. 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:
SECTION 1. Section 1400 of the Health and Safety Code is amended
to read:
1400. (a) It is unlawful for any person, association, or
corporation to establish, conduct, or maintain a referral agency or
to refer any person for remuneration to any extended care facility,
skilled nursing home, intermediate care facility, or residential care
facility for the elderly, or a distinct part of a facility providing
extended care, skilled nursing home care, or intermediate care,
without first having obtained a written license as provided in this
chapter from the director State Public Health
Officer or from an inspection service approved by the
director State Public Health Officer pursuant
to Section 1257. 1257, from the State
Department of Social Services, or from both, as appropriate.
(b) It is unlawful for any person, association, or corporation to
establish, conduct, or maintain a referral agency or to refer any
person for remuneration to any person or agency outside a long-term
health care facility, as defined in Section 1418, for professional
services for which the long-term health care facility does not employ
a qualified professional person to furnish a specific service,
including, but not limited to, laboratory, diagnostic, or therapy
services, unless the long-term health care facility complies with
current federal and state laws regarding the provision of these
services and all of the following conditions are met:
(1) The services will be provided in accordance with professional
standards applicable to the provision of these services in a
long-term health care facility.
(2) The long-term health care facility assumes responsibility for
timeliness of the services.
(3) Services are provided or obtained only when ordered by the
attending physician and a notation is made in the resident's medical
chart reflecting that the service has been provided to the resident.
(c) It is unlawful for any person, association, or corporation to
establish, conduct, or maintain a referral agency or to refer any
person for remuneration to any residential care facility for the
elderly for professional services if that facility does not meet the
licensing standards established in Chapter 3.2 (commencing with
Section 1560). The referral agency may satisfy this requirement by
obtaining and relying on the licensing status information for a
residential care facility for the elderly that is published on the
Internet Web site of the State Department of Social Services.
(d) It is unlawful for any extended care facility, skilled nursing
home, intermediate care facility, or residential care facility for
the elderly, or a distinct part of a facility providing extended
care, skilled nursing home care, or intermediate care to pay a
commission or fee to a referral agency that does not have a written
license as provided in this chapter from the State Public Health
Officer or from an inspection service approved by the State Public
Health Officer pursuant to Section 1257, from the State Department of
Social Services, or from both, as appropriate.
SEC. 2. Section 1401 of the Health and Safety Code is amended to
read:
1401. As used in this chapter chapter,
"referral agency" means a private, profit or nonprofit agency
that is engaged in the business of referring persons for remuneration
to any extended care facility, skilled nursing home, intermediate
care facility, or residential care facility for the elderly, or a
distinct part of a facility providing extended care, skilled nursing
home care, or intermediate care. "Referral agency" does not include
any of the following:
(a) A licensed residential care facility for the elderly that does
either of the following:
(1) Provides discounts or other remuneration to residents or their
families for referring new or prospective clients.
(2) Provides remuneration to staff for marketing or sales offers.
(b) A resident who refers a new or prospective resident and
receives a discount or other remuneration from a licensed residential
care facility for the elderly.
(c) A licensed residential care facility staff member who receives
remuneration from the facility for sales or marketing efforts.
SEC. 3. Section 1402 is added to the Health and Safety Code, to
read:
1402. "Residential care facility for the elderly" has the same
meaning as set forth in Section 1569.2.
SEC. 4. Section 1404 of the Health and Safety Code is amended to
read:
1404. No licensee under this chapter shall have a direct or
indirect financial interest in any facility doing business with the
licensee.
SEC. 5. Section 1404.5 of the Health
and Safety Code is amended to read:
1404.5. A license application shall be submitted to the
department either or both licensing departments, as
appropriate, whenever any of the following circumstances occur:
(a) Change of ownership of the referral agency.
(b) Change of name of the referral agency.
(c) Change of location of the referral agency.
SEC. 6. Section 1405 of the Health and
Safety Code is amended to read:
1405. (a) Any person, partnership, firm,
corporation corporation, or association
desiring to obtain a license to refer persons to extended care
facilities, skilled nursing homes, or intermediate care facilities,
or a distinct part of a facility providing
extended care, skilled nursing home care, or intermediate care,
shall file with the department State
Department of Public Health an application on forms furnished
by the department. The application State
Department of Public Health. Any person, partnership, firm,
corporation, or association desiring to obtain a license to refer
persons to residential care facilities for the elderly shall file
with the State Department of Social Services an application on forms
furnished by the State Department of Social Services. The
applications shall contain all of the following:
(a) Name of applicant, and if an individual, whether the applicant
has attained the age of 18 years.
(b) Name of referral agency.
(c) The location of the referral agency.
(d) The business or occupation engaged in by each applicant, and
by each partner, officer and director, for at least two years
immediately preceding the filing of the application. In addition,
each such person shall submit a statement setting forth whether he or
she has previously engaged in the operation of a referral agency,
whether he or she has been involved in, or the subject of, a refusal
or revocation of a referral agency license, and whether he or she has
been convicted of a crime other than a minor traffic offense.
(e) If the applicant is a corporation, the name and principal
business address of each officer and director of the corporation; and
for nonpublic corporations, the name and business address of each
stockholder owning 10 percent or more of the stock and the name and
business address of any corporation member who has responsibility in
the operation of the facility.
(f) If the applicant is a partnership, the name and principal
business address of each partner.
(g) Evidence of the right to occupy the premises where the
referral agency is to be located.
(h) A copy of the partnership agreement of
or the Articles of Incorporation, if applicable.
(i) A copy of the current organization chart.
(j) A schedule of fees to be charged and collected by the referral
agency, and a statement of the method by which each fee is to be
computed or determined.
(k) A declaration that the licensee will not have any financial
interest in any health facility doing business with the referral
agency.
( l ) Evidence satisfactory to the licensing
department that the applicant demonstrates reputable and responsible
character and the capability to comply with this chapter.
SEC. 7. Section 1407 of the Health and
Safety Code is amended to read:
1407. (a) Any licensee desiring to voluntarily surrender his or
her license for cancellation or temporary suspension shall notify the
licensing department in writing as soon as possible and,
in all cases, at least 30 days prior to the effective date of
cancellation or temporary suspension of the license.
(b) Any license placed in temporary suspension pursuant to this
section may be reinstated by the licensing department
within 12 months of the date of the voluntary suspension on receipt
of an application and evidence showing compliance with licensing
requirements.
SEC. 5. SEC. 8. Section 1408 of the
Health and Safety Code is amended to read:
1408. (a) Upon verification of compliance with this chapter and
with the approval of the licensing department, the
licensing department shall issue the license to the applicant.
(b) For applicants who solely When
licensing referral agencies that provide referrals to
residential care facilities for the elderly, the department
State Department of Social Services is not
required to conduct an onsite licensing inspection as a condition of
verifying compliance with this chapter.
(c) As a condition of verifying compliance with this chapter, the
licensing department may require an applicant to submit a
copy or example of the disclosure statement required by Section
1409.4.
(d) If the applicant is not in compliance with this chapter, the
licensing department shall deny the applicant a license.
Immediately upon the denial of any license, the licensing
department shall notify the applicant in writing. Within 20 days of
receipt of the department's notice, the applicant
may present his or her written petition for a hearing to the
licensing department. The proceedings
Proceedings conducted by the State Department of Public Health
shall be conducted in accordance with Section 100171.
SEC. 9. Section 1409.3 of the Health
and Safety Code is amended to read:
1409.3. (a) The licensee shall notify the department
either or both licensing departments, as appropriate,
within 10 days in writing when a change of stockholder owning
10 percent or more of the nonpublic corporate stock occurs. The
writing shall include the name and principal mailing addresses of the
new stockholder.
(b) When a change of agency manager occurs, the
department either or both licensing departments, as
appropriate, shall be notified in writing within 10 days by the
licensee. The notification shall include the name of the new agency
manager.
(c) Each licensee shall notify the department
either or both licensing departments, as appropriate,
within 10 days in writing of any change of the mailing address of the
licensee. The writing shall include the new mailing address of the
licensee.
(d) When a change in the principal officer of a corporate
licensee, chairperson, president, or general manager, occurs
the department either or both licensing
departments, as appropriate, shall be notified within 10 days
in writing by the licensee. The writing shall include the name and
principal business address of the officer.
SEC. 6. SEC. 10. Section 1409.4 is
added to the Health and Safety Code, to read:
1409.4. (a) Before referring a person to any facility, a licensee
shall provide the person with a disclosure statement containing all
of the following:
(1) Whether the licensee has an agreement or contract with the
facility to which the person is being referred.
(2) That a commission or fee will be received by the licensee from
the facility as a result of the referral, if applicable.
(3) Any gift or exchange of monetary value between the facility
and the licensee that is in addition to, or in lieu of, a commission
or fee.
(4) Any fee charged to the person or persons by the licensee. The
notice shall include a description of the services being rendered for
that fee and the licensee's refund policy.
(5) The licensee's contact information, including address and
telephone number, and the licensee's privacy policy. The privacy
policy may be provided as an Internet Web site link consistent with
provisions set forth in Section 22575 of the Business and Professions
Code.
(6) The date of the licensee's most recent tour or visit to the
facility and, as appropriate, a hyperlink to, or copy of, the most
recent evaluation report for a residential care facility for the
elderly to which the person is being referred, prepared pursuant to
Section 1569.33 and published by the State Department of Social
Services.
(7) Information regarding the type of facility and the services
offered by the facility.
(8) The contact information, including address and phone
telephone number, of the State Department of
Social Services or State Department of Public Health, as appropriate,
and the contact information for filing consumer complaints,
including contact information for the local long-term care ombudsman.
If the disclosure statement is provided electronically, the contact
information for each department and the local long-term care
ombudsman may be provided as a hyperlink.
(b) (1) The disclosure statement shall be dated and shall contain,
in addition to the requirements of subdivision (a), the name of the
person being referred.
(2) If the disclosure is provided in written form, it shall be
printed in 16-point bold type.
(3) If the disclosure statement is provided electronically, it
shall be consistent with provisions set forth in Title 2.5
(commencing with Section 1633.1) of Part 2 of Division 3 of the Civil
Code, and shall be displayed on a secured Web page in a larger type
than the surrounding text.
(c) The licensee shall provide the disclosure statement pursuant
to subdivision (a) in the same language in which the licensee
negotiates any referral services with the person receiving services.
(d) The disclosure statement shall be signed or otherwise
acknowledged by the person being referred, or his or her conservator,
guardian, authorized family member, or agent under a
power of attorney, stating that the disclosure statement required by
this section was received. The acknowledgment shall be executed with
one of the following:
(1) The signature of the person being referred, or his or her
conservator, guardian, authorized family member, or agent
under a power of attorney on the exact disclosure statement.
(2) An electronic signature that is consistent with standards set
forth in Title 2.5 (commencing with Section 1633.1) of Part 2 of
Division 3 of the Civil Code and includes the date, time, and
Internet provider address and displays the exact disclosure statement
document.
(3) A faxed confirmation that includes the date, time, and fax
number and displays the exact disclosure statement document.
(4) A telephonic, oral acknowledgment of the person being
referred, or his or her conservator, guardian, authorized family
member, or agent under power of attorney, which shall be recorded,
with that person's consent, consistent with Sections 632 and 632.7 of
the Penal Code. This paragraph does not authorize an in-person, oral
acknowledgment.
(e) The acknowledgment required by this section shall be retained
for a period of no less than three years.
(f) (1) If the disclosure statement, or any
other referral-related document, is provided electronically, the
licensee shall provide a written copy, in 16-point bold type, to the
person being referred, or his or her conservator, guardian,
authorized family member, or agent under power of attorney
following any referral. This written copy may be provided by fax,
email, or other means of electronic communication, if appropriate.
(2) Recorded telephonic acknowledgments shall, upon request, be
provided in an easily accessible format to the person being referred
or the licensing department within five days of the request.
(g) Any violation of this section with the intent to directly or
indirectly mislead the public on the nature of services provided by
the referral agency will constitute unfair competition which includes
unlawful, unfair, or fraudulent business acts or practices and
unfair, deceptive, untrue, or misleading advertising. Any person or
entity that engages in unfair competition shall be liable for a civil
penalty not to exceed two thousand five hundred dollars ($2,500) for
each violation.
SEC. 7. SEC. 11. Section 1409.6 is
added to the Health and Safety Code, to read:
1409.6. (a) It is unlawful for a licensee to share any personal
information, including, but not limited to, the name, address, age,
gender, or medical information of the person receiving services from
the licensee, with any unauthorized person or third-party affiliate
of the licensee, unless authorized pursuant to subdivision (b).
(b) Before making a referral to any facility or facilities, the
person being referred, or his or her conservator, guardian, family
member, or agent under power of attorney, may authorize the licensee
to share his or her personal information, as well as the name and a
description of the care or services needed by the individual being
referred, with a facility or facilities for purposes of the referral.
The personal information, or other information shared, shall be
limited to only that information which is necessary to complete the
referral process. The authorization shall be obtained in either of
the following ways:
(1) As a separate authorization form that clearly discloses that,
by executing an acknowledgment in the manner described in subdivision
(d) of Section 1409.4, the individual is consenting to the
disclosure of his or her personal information to a facility or
facilities for which they are being referred. This acknowledgment
shall include the name and location of the facility or facilities
that will receive the personal information and the format in which
the personal information will be shared.
(2) As part of the disclosure statement required by Section 1409.4
if it clearly indicates that the individual is consenting to the
referral agency's disclosure of his or her personal information to a
facility or facilities for which her or she is being referred. The
authorization shall include the name and location information of the
facility or facilities that will receive the personal information and
the format in which the personal information will be shared.
(c) The licensee shall not share the contact information of an
individual who has not provided his or her authorization pursuant to
subdivision (b).
SEC. 8. SEC. 12. Section 1409.7 is
added to the Health and Safety Code, to read:
1409.7. It is unlawful for a licensee to hold any power of
attorney for a person receiving placement referral services from that
licensee, or to receive or hold a client's property in any capacity.
SEC. 9. SEC. 13. Section 1409.8 is
added to the Health and Safety Code, to read:
1409.8. On and after July 1, 2016, all persons, associations, or
corporations licensed pursuant to this chapter shall maintain
liability insurance coverage in an amount of at least one million
dollars ($1,000,000) per person occurrence and three million dollars
($3,000,000) in the total annual aggregate, for negligent acts or
omissions by the licensee.
SEC. 14. Section 1410 of the Health and
Safety Code is amended to read:
1410. The licensing department may suspend or revoke
licenses a license issued under this
chapter for violation of any provisions of this chapter or rules and
regulations promulgated hereunder. In addition, the licensing
department shall assess a civil penalty in the amount of fees
received by a licensee as a result of a violation of any provisions
of this chapter or rules and regulations promulgated hereunder.
Proceedings to suspend or revoke a license conducted by the
State Department of Public Health shall be conducted pursuant
to Section 100171.