BILL ANALYSIS Ó SB 648 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 648 (Mendoza) - As Amended June 30, 2016 ----------------------------------------------------------------- |Policy |Aging and Long Term Care |Vote:|4 - 1 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Judiciary | |10 - 0 | | | | | | | | | | | ----------------------------------------------------------------- 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 SB 648 Page 2 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 SB 648 Page 3 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 SB 648 Page 4