The Assembly on Monday passed SB 141, a bill by Senator Nell Soto (D – Pomona) to provide some financial protection to applicants and residents of residential care facilities for the elderly (RCFEs).

Specifically, Soto’s bill would require refunds of part or all of the fees paid prior to admission by applicants for, and residents of , RCFEs when the facilities do not provide information about preadmission charges, or when applicants do not enter the facilities or they only stay for a period of three or fewer months. 

According to the Senator, “The high cost of preadmission fees, coupled with a permissible refund provision make it difficult, if not impossible, for consumers to move to another facility when situations do not work out."

There are 6,773 RCFEs in California which house over 150,000 residents. According to a statewide survey conducted by the California Advocates for Nursing Home Reform (CANHR), 29% of  RCFEs charged a preadmission fee in 2002, with fees ranging as high as $3,200 (with an average of $1,000).  Other surveys have found fees as high as $5,000.

SB 141 contains limitations on refunds.  If a preadmission appraisal is conducted but the applicant does not enter the facility, the amount refunded is 80% of the amount over $500.  Residents who leave after entering the facility are entitled only to a refund of a percentage of the amount over $500, from 80% in the first month to 40% in the third month. 

According to a statement from CANHR, which is sponsoring Senator Soto’s bill, “Currently, if a resident pays a $2,500 preadmission fee and leaves the facility within the first month because the facility did not properly assess the resident's needs, the resident will be out $2,500.  The result is that the resident will have less money to enter another facility that charges a preadmission fee. The proportional refund method (as specified in SB 141) takes into account the range of preadmission fees charged by providers."