SB 1383 Texas Senior Referral Disclosure: What Free Placement Services Must Tell You

When your parent needs to transition from the hospital to assisted living or a nursing home, a "free" senior placement advisor will likely call you within hours — sometimes before you have even left the hospital parking lot. They promise to find the perfect facility, schedule tours, and guide you through the process at no cost.

Texas Senate Bill 1383 exists because "no cost" was never the full story.

What SB 1383 Requires

Texas SB 1383 mandates that senior living referral agencies disclose, in writing, that they are paid by the facilities they recommend. This disclosure must happen before the agency provides any referral services to a consumer.

Specifically, the law requires disclosure of:

• That the referral agency receives compensation from senior living communities
• The general nature of that compensation (typically a commission based on the resident's first month's rent)
• That the recommendations may be limited to facilities that participate in the agency's network

This is a transparency law, not a ban. Referral services can still operate under their commission-based model — they just have to tell you about it upfront.

The Commission Model Explained

Major national referral services like A Place for Mom operate on a lead-generation model. Here is how it works:

1. A family contacts the service or fills out an online form
2. The service matches the family with facilities in its partner network
3. If the family tours and moves into a partner facility, the agency receives a commission — typically 50% to 100% of the resident's first month's rent
4. Facilities that do not pay the commission are excluded from recommendations

For a Texas assisted living facility charging $5,000 per month, the referral commission can be $2,500 to $5,000. This creates a structural incentive to recommend partner facilities over non-partner alternatives — including facilities that might be a better fit for the resident but do not participate in the referral program.

What This Means for Families

The commission model is not inherently predatory, but it creates blind spots:

You may not see the best options. A referral agency only recommends facilities that pay to be in its network. Smaller, family-run facilities that do not pay referral commissions — often the ones with the best staffing ratios and resident satisfaction — are invisible to the platform.

Price sensitivity is reversed. The agency earns more when your parent moves into a more expensive facility. There is no financial incentive to recommend the most cost-effective option.

Speed is prioritized over fit. Referral agents are evaluated partly on placement volume. The faster they move a family into a facility, the faster they earn the commission. This pressure can conflict with the family's need for careful evaluation.

Nursing homes and Medicaid transitions are underserved. Most referral services focus on assisted living placements, where commissions are straightforward. Families navigating hospital-to-SNF transitions, Medicaid-pending admissions, or Miller Trust requirements receive little to no guidance from these platforms — because those placements are complex and the commissions are less predictable.

How to Use Referral Services Wisely

Referral services are not useless. They have large facility databases and can quickly identify options in your parent's area. But treat their recommendations as a starting point, not a complete picture:

• Ask directly: "Are you showing me all licensed facilities in this area, or only your partners?" SB 1383 requires them to answer honestly.
• Cross-reference with CMS. Use Medicare's Care Compare tool to review facility ratings independently of the referral platform.
• Check non-partner facilities. Call facilities directly, especially smaller or locally-owned ones, to ask about availability and pricing.
• Get the disclosure in writing. Under SB 1383, the agency must provide written disclosure. If they skip this step, they are violating Texas law.

The Independent Alternative

A consumer-funded guide costs money upfront but carries no facility commissions and no placement incentives. The recommendations are based on the family's needs, not a facility's marketing budget.

The Hospital-to-Home Texas toolkit covers the full transition — from hospital discharge rights and Medicare SNF coverage to Medicaid planning and facility selection — without referral commissions or lead generation. It is funded by families, written for families.

See more Texas guides →