Efforts to bring greater transparency into how senior living referral companies work are being debated by Wisconsin lawmakers.
AB 255 would impose several requirements related to referring individuals to an assisted living community in exchange for a fee collected from a community.
Under the bill, a referral agency would be required to disclose any relationship it has with an assisted living community, any fee a community pays to the agency and the fact that the agency lists on its website only those assisted living communities with which the agency has contractual relationships.
The Wisconsin Assisted Living Association has been a strong advocate for the legislation, holding that referral agencies are becoming more prevalent in the marketplace as the population of aging adults grows.
“WALA supports greater transparency so that individuals and families understand that there is a contract between referral agencies and the assisted living providers to which they are being referred,” WALA President and CEO Michael S. Pochowski told McKnight’s Senior Living. “While referral agencies often market themselves as offering a free service to prospective clients, they are not free, and there is an associated cost that the consumer, in most cases, is paying.”
Contracts between referral agencies and assisted living communities have fees and costs that the communities often pass on to the consumer, he noted. Referral agencies cannot receive referral fees for prospective residents who are Medicaid beneficiaries, which means that referrals are only going to providers that contract with an agency. As a result, Pochowski said, consumers may not receive provider options that are better suited to their care needs and budgets.
“As it stands now, referral agencies face very little regulatory oversight, yet operate within an industry that is highly regulated to protect consumers and ensure quality care,” he said.
The legislation, Pochowski said, would disclose those contractual relationships and build awareness that fees associated with those contracts ultimately may be passed on to consumers. The bill also would create a standardized fee structure based on service delivery, rather than an incentivized fee structure based on rent and care charges.
LeadingAge Wisconsin echoed Pochowski’s strong support for additional transparency the bill would bring.
“The challenge providers are seeing with these referral sources is that while they tell the families they are ‘free,’ they charge fees from the providers that they refer to,” LeadingAge Wisconsin Senior Vice President of Policy and Finance Rene Eastman told McKnight’s Senior Living. “If providers are not willing to pay the referral fees, they are left off of listings, so families are not given the full listing of available quality communities in their area.”
Eastman added that, ultimately, this means higher marketing expenses for everyone, and less of the resident’s dollars going toward the actual provision of care and services.
Rick Abrams of the Wisconsin Health Care Association / Wisconsin Center for Assisted Living told McKnight’s Senior Living there is “never a downside to full disclosure and transparency for consumers.”
The bill has been referred to the state Assembly Committee on Health, Aging and Long-Term Care.
Source: McKnights Seniorliving
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