Senator Tony Mendoza Holds A Town Hall Meeting on Residential Care Facility Referral Agencies

August 8, 2016

Sacramento – Senator Tony Mendoza (D-Artesia) on Friday held a successful town hall meeting in Norwalk regarding his bill, SB 648, which would establish oversight for referral agencies that refer clients to residential care facilities for the elderly. Local seniors and their families, along with representatives from referral agencies and other stakeholders, attended the town hall meeting. SB 648 is currently pending in the Assembly Appropriations Committee.

“The town hall was a great opportunity to hear first-hand from local seniors, their families, and other stakeholders regarding my bill, SB 648,” said Senator Tony Mendoza.

“SB 648 establishes licensing and strengthens disclosure requirements for referral agencies in order to guarantee that seniors and their families are not victimized. This will help protect against referral agencies that engage in unscrupulous business practices,” said Senator Tony Mendoza.

In spite of their proliferation, referral placement agencies are largely unregulated in California. Under current law, only certain referral agencies are required to be licensed and there are no requirements for ensuring that referrals are made solely to licensed care facilities. There is a need to address these gaps in current law in order to ensure that every placement agency meets some licensing and disclosure requirements to ensure that seniors are not being referred to facilities that have lost their license to operate in California.

As the population of aging adults who need specialized medical care and support services has grown in the last several years, there has been an explosion of for-profit businesses that offer referral assistance to seniors and their families in finding suitable long-term care housing options in extended care, skilled nursing home or intermediate care facilities, and residential care facilities. While these agencies provide a valuable service, the lack of licensing requirements leave room for abuse. For example, some referral agencies advertise their services as free-of-charge to the consumer, however, they often contract with care facilities and receive commissions, incentives, and bonuses for each

senior or family placement. These financial incentives are largely undisclosed to the senior or families being placed, and may lead to a placement that is not helpful and may even be harmful to the patient.

“Referral agencies targeting a senior or family member during one of the most difficult times in their life and profiting from it without full disclosure of their financial interest is just wrong. I am meeting with various stakeholders that represent a vast number of referral agencies, including brick and mortar and online referral agencies, to ensure that my bill will end this practice,” said Senator Mendoza.

SB 648 will:


  • Require placement referral agencies to 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.
  • Enact provisions to guard the medical privacy of seniors, and require the referral agency to maintain liability insurance.
  • Add “residential care facility for the elderly” to the definition of a referral agency.
  • Require referral agencies to be licensed under the Department of Social Services.

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.

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