Paying two referral fees for the same resident?

Some adult family home providers have been bullied into paying two referral fees for the same resident,  some under the threat of being sued.

Multiple senior referral agencies billing the same care provider for the same placement isn’t new with the first accounts going back to 2010. Some providers reluctantly pay both agencies for fear of being blacklisted or sued while others try to clarify which agency actually caused the placement, but eventually give up.

No matter what “fine print” reasons are used to justify a placement fee from two separate agencies, it’s not ethical. Placement services and AFH providers should work together to help prevent and stop this practice.

What can you do when you receive bills from more than one agency claiming to have referred the same client to you and asking for payment?

When you agree to pay two placement fees to more than one agency for the same resident, no matter the percentage of the fee, you are agreeing to potentially pay any and all agencies who claim the referral was theirs.

Why is this happening?

Mr. Jones is looking for an AFH for his spouse, Jane. He calls 3  placement agencies and leaves messages. He then finds the DSHS website and calls a few providers directly. He also came across a website that offered a “list of homes, availability, and pricing” in his area and entered his personal information (without reading the terms and conditions…) to access the list.

Unbeknown to him, Mr. Jones started several senior referral relationships. When Mr. Jones decides to work closely with one particular agency, his relationships with the other agencies are not formally ended, leaving open loops for those agencies to claim ownership of the relationship.

Meanwhile, the referral agency that received the online inquiry may have already faxed or emailed a referral alert to their entire list of care providers in the client’s desired zip code, including your home. That agency has now referred Mr. Jones to your AFH and beieves they are therefore netitled to receive a placement fee.

Trouble his, Mr. Jones has been closely and actively working with a different placement service who also brought him to your home for a tour and facilitated the move.

You have now received two referrals for the same client, and both agencies could claim a referral fee – so which agency should gets the placement fee?

How placement services can help

  1. Ask all new clients if they are working with, or have referral agreements or relationships with any other placement service;
  2. If the answer is yes, ask if they are “actively working with that agency.
    1. if that answer is yes, clarify and encourage the client to choose only ONE agency to work with.
    2. Explain the importance of ending a referral agency relationship if there is a potential future conflict;
    3. The law does not allow exclusive referral agreements or relationships, and they are free to go back to any other agency anytime, without explanation, penalty or cost.
  3. Have the client complete and send a “Termination of Non-Exclusive Senior Referral Assistance Relationship” letter and send it to all non-active agencies who were previously contacted for this referral.

The “Termination Of Non-Exclusive Senior Referral Assistance Relationship” form and instruction here can be used by AFH providers and referral services.

Best practices for adult family home providers

Ultimately, all providers must be careful when signing senior referral agreements. Read carefully, understand every clause and its implications, and don’t be afraid to negotiate terms you don’t agree with – including the fee. If you can’t come to a fair agreement, do not sign the contract and find another placement service – there is no shortage.

Any time you receive a referral or inquiry, do the following:

  1. Clearly document all leads and referral calls you receive, including the exact date and time the first contact was made, and where the referral came from – ask how they found you. Write everything down on a Referral Intake form.
  2. Ask the prospective client if they are currently working with a placement service and clarify their arrangements.
  3. Have the client cancel any outstanding referral agreements unless they are actively providing referral services.
  4. Use this “termination of non-exclusive senior referral assistance relationship.

“He Who Has The Gold Rules.”

Termination of Non-exclusive Senior Referral Assistance Relationship

Use this form to help avoid paying two referral fees for the same resident.

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Joseph Spada
Joseph Spada

Adult Family Home Consultant, geriatric nurse, owner of Spada Care Homes, Ohana Hale Senior Living, and Savanna Healthcare; DSHS instructor of the AFH Administrator Training; speaker; author.

    1 Response to "Paying Two Referral Fees for the Same Resident – Part 2"

    • Robert L King

      WOW great and very informative. Thank you for this information I never thought of this…

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