Senate probes A Place for Mom, referral service accused of putting seniors at risk

The Senate Special Committee on Aging is launching an investigation into A Place for Mom, the country’s largest for-profit senior care referral service, which has been accused of steering people toward facilities with documented safety and regulatory violations while collecting lucrative commissions.

Committee Chair Bob Casey, D-Pa., sent a letter Tuesday to A Place for Mom accusing it of misleading users about the role commissions play in its referrals and discriminating against low-income families. The letter, obtained by NBC News, requested three years’ worth of information about revenue the company has received from assisted living communities.

A Place for Mom, launched in 2000, which bills itself as the biggest online referral service for senior living options, lists roughly 14,000 establishments in the U.S. and accepts payments from those facilities. But seniors and their families might not realize that’s less than half of the facilities on the market, the letter states.

Casey’s letter also criticizes A Place for Mom for encouraging families to spend more than they can afford. It cites a frequently asked questions section of the company’s website that encourages facilities not to worry if they charge more than a family’s stated upper limit. According to the FAQ, nearly 40% of families who moved to senior living paid roughly $1,000 more per month than they had budgeted.

“It is clear A Place for Mom is upselling families, and the company ultimately benefits from families spending beyond their means,” Casey wrote.

The FAQ also says its advisers do their best “to ensure that no federally funded family is referred” to the communities, effectively barring families who want to use Medicaid funding to cover assisted living costs.A Place for Mom did not immediately respond to a request for comment.

Assisted living and elder care are part of a booming industry that’s expected to continue expanding in the next two decades. The average monthly cost of assisted living is around $4,500 to $5,300, but it varies depending on location and the level of care required. A majority of the facilities are affiliated with chains or large corporations, and the quality of care has increasingly been called into question as private equity firms have taken greater ownership of the industry.

In 2010, The Seattle Times reported that A Place for Mom referred people to senior living homes without inspecting them for quality or safety, directing families toward facilities with documented abuse and neglect violations. The company said at the time that its advisers sometimes fall behind on visiting facilities in person but that many families were satisfied with its services.

This year, a Washington Post analysis found that more than a third of the facilities the website recommended as “Best of Senior Living” across 28 states had been “cited for neglect or substandard care in the past two years.” State oversight records reviewed by the Post alleged the facilities failed to properly tend to injuries, mismanaged medication and did not adequately monitor patients who later died. The company told the Post it encourages families to do their own research to make “an informed decision.”

While A Place for Mom is the biggest senior living referral service, it is not the only website that receives commissions from facilities for finding them residents.

Kate Granigan, board president of the Aging Life Care Association, a nonprofit group that advocates for ethical standards in elder care, said that as long as the facilities foot the bill for referrals — rather than the consumers’ paying advisers for recommendations — the model is “ripe for conflict.” She said she would support legislation to require minimum transparency standards for referral services.

“Transparency about how they get paid is important to the consumer. “As is the fact that they don’t represent everything that’s out there — they represent who pays them. I also think there should be transparency about their expertise,” Granigan said, noting that consumers may not understand that not all of the advisers who help them have medical backgrounds.

A Place for Mom was previously owned by a private equity firm that simultaneously had invested in assisted living facilities, before the website was sold to the two other private equity firms that currently hold it, according to Casey’s letter.

Casey’s letter asked A Place for Mom for its total revenue for each of the last three years and for the 100 facilities it received the most money from and referred the most people to over the same period. The letter also requested details on A Place for Mom's process for vetting facilities and the total number of move-in fees it received last year, along with copies of sample contracts. The company has until July 15 to provide the requested information.

This article was originally published on NBCNews.com