BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 648  


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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 648  
          (Mendoza) - As Amended June 30, 2016


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill requires agencies that refer individuals to  
          residential care facilities for the elderly (RCFEs) to be  
          licensed by the Department of Social Services (DSS), and  
          establishes a number of consumer protections related to the  
          referral practices of such agencies, including anti-kickback  
          rules, restrictions on the sharing of consumers' information,  
          restrictions on commission for referrals, and required  








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          disclosures.  


          It also makes owners, operators, and employees of referral  
          agencies mandated reporters of elder or dependent adult abuse. 


          FISCAL EFFECT:


          Significant one-time costs to DSS, potentially exceeding $1  
          million GF to establish the licensure program, as well as  
          significant 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 volume is high or significant  
          enforcement resources are necessary, costs could be higher.


          COMMENTS:


          1)Purpose.  This bill seeks to impose licensure and minimum  
            standards on agencies that refer individuals to RCFEs.  The  
            author notes most seniors and their families typically seek  
            the assistance of a referral agency following a decline in  
            independence or a significant health event, a particularly  
            vulnerable time.  Since referral agency services are generally  
            provided for free to the individual and referral agencies are  
            paid on commission from the facilities to which they are  
            referring, potential serious conflicts of interest exist that  
            can harm consumers.  This bill seeks to erect a consumer  
            protection framework around the RCFE referral industry.  


          2)Background.  RCFEs, commonly known as assisted living  
            facilities, are licensed by DSS. They range in size from  
            several beds to hundreds of beds.  They provide a home-like  








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            environment for seniors and dependent adults who need  
            assistance with activities of daily living such as dressing,  
            preparing food, and bathing.  In recent years, the quality of  
            RCFE care has been a question of public discussion, with  
            high-profile incidents of understaffing and even abandonment  
            noted in news media.  This bill addresses an aspect of the  
            RCFE industry: those agencies that refer consumers to RCFEs,  
            in order to ensure consumers can rely with more confidence on  
            such referrals.  Agencies that refer individuals to licensed  
            health facilities, such as nursing homes, are already licensed  
            by the California Department of Public Health.   





          3)Staff Comments.  Most licensure programs are fee-supported.   
            This bill does not establish a fee structure for licensed  
            referral agencies. The author may wish to consider, if  
            licensure is the right solution to the problems identified,  
            establishing a fee structure that ensures any program costs  
            are fully fee-supported and that scales somewhat based on size  
            or complexity of the referral agency or associated licensure  
            and enforcement activities. 



          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081


















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