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Senator Mendoza’s Senior Protection Bill Clears California State Senate

Licensing & Financial Disclosures Required

 Sacramento- Senate Bill 648, authored by Senator Tony Mendoza (D-Artesia), was approved by the State Senate today on a bipartisan vote. The bill will protect seniors and their families from elder care referral agencies that engage in unscrupulous business practices by strengthening licensing and financial disclosure requirements. The bill now goes to the State Assembly for consideration. A video of Senator Mendoza’s Senate Floor presentation and vote may be found at: https://www.youtube.com/watch?v=0DwwzCRtURE&feature=youtu.be

“I want to ensure that seniors and their families are not taken advantage of by unscrupulous agencies whose only goal is to make a profit. It is vital that we strengthen the licensing and financial disclosure requirements as a means of protecting consumers from deceptive business practices,” said Senator Tony Mendoza.

 As the population of aging adults has grown in the last several years, there has been a proliferation of for-profit businesses that offer referral assistance to seniors and their families to find long-term care housing options. While these agencies provide a valuable service, lack of tough licensing requirements leaves room for financial abuse. Minimum standards for disclosure are needed to ensure that seniors, and their families, are making the most informed and appropriate decisions.

California legal aid organizations, city and county social service agencies, and elder care advocates have reported instances of unethical, unscrupulous, and harmful conduct by elder care referral and placement agency operators. For example, some referral agencies advertise their services as free of charge to the consumer, but receive undisclosed commissions, incentives and bonuses for each senior placement, potentially leading to unsuitable or even harmful placements.

“These agencies market to the most vulnerable Californians. The lack of licensing requirements and oversight has allowed bad operators to misguide and harm seniors and their families,”added Senator Tony Mendoza.

Some specific examples of harmful conduct include:

  • In San Bernardino, a hospital was sending patients to a placement agency that required patients to pay a $1,000 fee and referred them to unlicensed care facilities or placed them temporarily in higher quality licensed facilities during family visits, and then moved them into lower quality unlicensed facilities.
  • In San Luis Obispo, senior referral agencies intentionally made inadequate placements for short periods of time in order to collect commissions and then moved the resident to another facility to collect a second, or sometimes third, commission.
  • In San Diego, a placement agency approached a blind woman in her hospital bed and pressured her to use their services.

“Seniors and their families who use these services have a right to know what financial relationships may be influencing the decisions made by these elder care referral services,” said Senator Mendoza.

SB 648 will require companies who operate in California as referral agencies to:

  • Be licensed by the Department of Social Services
  • Disclose whether the agency shares any financial interest with a care facility, including whether a fee or commission is received, and other financial benefits resulting from the placement
  • Disclose the most recent visit to a facility where the client is being referred
  • Provide client up-to-date state evaluation of the facility
  • Safeguard the medical privacy of seniors
  • Maintain liability insurance

 “A decision to find long-term care quickly creates an environment that makes families and seniors more susceptible to pressure, misinformation and unscrupulous business practices,” said Senator Mendoza. “Minimum standards for disclosure are needed to ensure that seniors, and their families, are making the most informed choices when it comes to their long-term care needs.”

“The Consumer Federation of California is sponsoring this bill to give the elderly and their families the information they need to make good decisions in difficult times. They have a right to know whether a placement agency is being paid to promote a facility, whether from fees, commissions or other considerations. They also have a right to know what qualifies a placement agency to advise them on such a life-changing decision. Our elders ought to be able to count on these agencies to have their clients’ best interests at heart, and not their own profits,” said Richard Holober, Executive Director of the Consumer Federation of California (CFC). Since 1960, CFC has been active in safeguarding the rights of the elderly and all Californians.

Senator Tony Mendoza, a Los Angeles native and former elementary school teacher in East Los Angeles, represents the 32nd Senate District encompassing portions of Los Angeles and Orange Counties. For more information about Senator Mendoza visit his website or follow him on Facebook and Twitter.