HB 2667 proposes to establish a regulatory framework for businesses that offer referral services connecting individuals with senior living communities in Texas. The bill would add a new Chapter 121 to the Texas Business & Commerce Code, clearly defining key terms such as "referral agency," "consumer," and "senior living community." Under this framework, referral agencies would be required to provide clear and timely disclosures to consumers about their services, including information on fee arrangements and the consumer’s right to terminate services without penalty.
To ensure ethical operations, the bill prohibits referral agencies from referring consumers to communities in which they have a financial or management interest and from referring consumers to unlicensed facilities unless legally exempt. Agencies must obtain criminal background checks for employees who have direct contact with consumers, maintain liability insurance, audit senior living facilities to verify licensing compliance, and provide code-of-conduct training to employees engaged in referral activities. Additional restrictions are placed on how and when referral fees can be collected.
Overall, the legislation seeks to enhance transparency, protect vulnerable seniors seeking housing options, and promote ethical business practices within the senior care industry, while also setting baseline operational requirements for referral agencies doing business in Texas.
The originally filed version of HB 2667 was narrowly focused on clarifying the business relationships between referral agencies and senior living communities. It primarily defined referral agencies, outlined what types of entities are excluded from that definition, and allowed contractual compensation structures such as lump sums, per-referral payments, or fixed fees. It also amended Section 102.005 of the Occupations Code to exempt these agencies from existing prohibitions on certain fee arrangements, effectively enabling referral agencies to operate without fear of violating anti-kickback laws. However, the filed version imposed virtually no consumer protection requirements or operational standards on referral agencies.
In contrast, the Committee Substitute for HB 2667 dramatically broadens the bill’s scope by creating a more comprehensive regulatory framework aimed at protecting elderly consumers seeking placement in senior living communities. The substitute version adds extensive disclosure obligations, requiring referral agencies to provide consumers with clear written information about their services, fee structures, and the consumer’s right to discontinue use at any time. It also prohibits several practices that could create conflicts of interest, such as referring clients to facilities in which the agency has a financial stake or referring clients to unlicensed facilities. Additionally, it imposes operational mandates on referral agencies, including requirements to conduct criminal background checks on certain employees, maintain liability insurance, audit facilities for license compliance, and train employees on ethical standards.
In short, while the filed bill was primarily about facilitating referral agency business operations and clarifying legal compensation practices, the Committee Substitute pivots the legislation toward a strong consumer protection model. The substitute adds significant compliance responsibilities to ensure transparency, ethical conduct, and the safety of senior consumers, representing a fundamental shift in both the focus and effect of the legislation.
Contact the Author
Rep. Ken King
