Soto

Seniors who leave residential care facilities for the elderly (RCFEs) would be protected by new standards for refunding of often-exorbitant pre-admission fees, thanks to a bill (SB 141) introduced today by State Senator Nell Soto (D – Pomona).

Currently there is nothing to prevent licensees of RCFEs from charging new residents pre-admission fees.  These fees – which can range from $300 to $5,000 – are on top of residents’ general monthly costs and are often far beyond what is needed to process an application, set up a resident’s records, and complete pre-admission appraisals to ensure that placement in a particular facility is appropriate. 

Existing law prohibits licensees from charging security or other types of deposits against possible damages by residents, but there is no limit to the amount that RCFEs can charge under the guise of “community fees,” “application fees” or “processing fees.”   Just as important, there is no requirement to provide a refund.  “Right now, if a resident pays a $3,000 pre-admission fee but leaves the facility within one month, there is nothing to compel the RCFE to refund any of the $3,000 to the resident,” Senator Soto said. “Since many seniors and their families don’t have a lot of extra cash to throw around, this means that $3,000 is now unavailable for use at another facility should they decide that the original RCFE does not best meet their needs.”

To increase protections for residents of RCFEs, Soto’s bill seeks to:

• Require that 100% of a pre-admission fee be refunded to a prospective resident if he/she decides not to enter the facility prior to completion of the pre-admission appraisal;
• Require that some portion of the pre-admission fee be refundable for up to four months after payment and admission into the facility;
• Set forth the amount of the refund by deducting 20% for every month that the resident resides in the facility;
• Require that a pre-admission fee amount, reason for the charges and refund conditions be disclosed to the resident or the resident’s representative prior to payment of the fee.

Soto has targeted pre-admission fees before. Her 2002 bill, SB 1898, would have capped such fees – but the provision was amended out of the bill by lawmakers who said it was “unfair” to put the same cap on all facilities regardless of facility size, services provided and the comprehensiveness of the pre-admission appraisal.

Soto has heard from RCFE residents who have complained about the “bait and switch” tactics that facility licensees use in regards to fees, services and basic care.  “Unlike nursing facilities,” Soto says, “state aid programs do not pay for residential care, so any money that is available to RCFE residents for their monthly fees can mean the difference between being in an appropriate care environment and premature institutionalization.”