For discharge planners and advisors and For families
How do placement advisors get paid in Texas, and what must they disclose?
. By Erika Crossley, AI Perfect Fit Senior Living Placement, Houston.
In Texas, placement advisors are usually paid by the home or community the family moves into, not by the family, and the amount is set by contract, not by law. Since June 20, 2025, Business and Commerce Code Chapter 121 requires the advisor to hand the family a written disclosure at the time of referral that says what the service does, who pays the fee, that the family can stop at any time without penalty, and that the list may not include every community that fits.
Step by step
Who pays
Chapter 121 defines a referral agency as an entity paid a fee by a consumer or a community for referring people to senior living communities. In practice the community pays, after the move-in, under a written contract. The law does not set the amount; Section 121.005 allows a contract to base pay on the volume or value of referrals. ESTIMATE, not verified against any government source: in the Houston market the fee is commonly described as a share of, or equal to, one month's rent. Erika's own terms are one month's rent, paid by the home, only after a confirmed move-in, and the family pays nothing.
What the advisor must give the family, in writing, at the time of referral
Section 121.002(a) lists four items: a description of the referral agency's services; a statement of whether the consumer or the community pays the referral fee; a statement that the consumer may stop using the agency at any time without cause or penalty; and a statement that the list of communities provided may not include all communities in the area that meet the consumer's stated preferences and needs. Section 121.002(b) requires it as a written physical or electronic document.
What the advisor must do for you
Consider your preferences and never use cost as the sole factor in choosing where to refer you (121.002(c)). If you stop using them, tell every community they sent you to (121.002(e)). Audit every community's license and keep a record (121.004(3)). Run criminal history checks on employees who deal with families or enter communities (121.004(1)), carry liability insurance (121.004(2)) and train staff before they work with families (121.004(4)).
What the advisor may not do
Section 121.003 bars referring you to a community the agency owns, manages or has a financial interest in; knowingly referring you to an unlicensed community that is not exempt from licensing; collecting a fee when you transfer between two properties of the same community (with a narrow exception); and collecting a fee after the referral has expired under the agency's contract with the community.
What the law does to the community
Section 121.004(5) requires the advisor to send the community a written referral notice with the time and date, on or before the day you are admitted. Section 121.004(6) caps the payment period in the contract at three years from the referral. Section 121.002(d) says no community can be required to use a referral agency. SB 1383 also exempts referral agencies from the Occupations Code Chapter 102 patient-solicitation ban, and Section 121.005(c) forbids any compensation that federal anti-kickback law prohibits, which is why reputable advisors take no fee on Medicare- or Medicaid-funded placements.
Five questions to ask any advisor before you share your parent's name
Who pays you, and how much? Will you put the Chapter 121 disclosure in writing today? Do you own or have an interest in any home you will show me? Will you show me the license number and the date you checked it for every home on the list? How many homes in my area did you leave off, and why? An advisor who welcomes those questions is the one to keep.
Sourced facts
Every law, fee and coverage statement above rests on one of these government pages, read on October 7, 2026. Anything marked ESTIMATE on this page is not from a government source and is labeled where it appears.
- Definition of referral agency, the four written disclosure items, the duties, the prohibited conduct, the three-year payment cap, and the federal anti-kickback limit. Source: Texas Legislature, 89th Regular Session, enrolled bill text, Senate Bill 1383 (2025), adding Business and Commerce Code Chapter 121, Referral Agencies for Senior Living Communities.
- Chapter 121 as codified. Source: Texas Legislature, Business and Commerce Code, Business and Commerce Code Chapter 121, Referral Agencies for Senior Living Communities (codified).
2 government sources cited on this page.
Questions people ask next
Is a placement advisor's help really at no cost to the family?
Under Chapter 121 the advisor must tell you in writing who pays. When the community pays, the family does not write a check, but the community's cost is part of what it charges every resident. That is why the disclosure also tells you the list may not include every community that fits: the list is often the communities that have a contract with the advisor.
Can I use two advisors at once?
Nothing in Chapter 121 stops you, and the law lets you stop using any advisor at any time without penalty. If you stop, the advisor must tell the communities they referred you to. Expect communities to ask which advisor sent you, because the written referral notice with time and date decides who gets paid.
What if the advisor sends me to a home that turns out to be unlicensed?
Section 121.003(3) bars knowingly referring a consumer to an unlicensed community that is not exempt from licensing, and 121.004(3) requires the advisor to audit each community's license and keep a record. Ask for the license number and check it yourself on the HHSC directory.
Does Chapter 121 cover home health or hospice referrals?
No. It covers senior living communities: assisted living, adult foster care, retirement homes, memory care and similar places that provide shelter, food or personal services for elderly people. Referrals to home health or hospice agencies fall under other laws.
From Erika
Here is how I run it: the family gets my written Chapter 121 disclosure before anything else happens, every home on the shortlist has its license checked against the state's file, and the home pays me one month's rent only after a confirmed move-in. If you are a family or a discharge planner, start the conversation and you will see the disclosure first. I am not a lawyer and I do not run a home, so none of this is legal advice; it is what the state's own pages say, linked so you can read them yourself.