Photo/Illutration A contract between a nursing home and a placement agency lists referral fees based on levels of nursing care services required for prospective residents. (The Asahi Shimbun)

Profit, rather than charitable motives, drives agencies dedicated to placing elderly individuals in care homes. 

What may sound obvious becomes murkier when those individuals and their families are not informed of the agreements between agencies and nursing homes that place a system of charges above finding the best fit for them. 

One woman and her mother fell victim after the hospital where her mother received treatment introduced a man to her. 

He told her the only available elderly care facility was about a one-hour drive from her home in Osaka Prefecture.

Early last year, her mother, 73, was hospitalized after falling during a walk and breaking her leg. After her mother was released, her dementia worsened, making it difficult to care for her at home. 

Despite looking for a facility much closer to home, the woman signed a contract with the nursing facility.

She thought that the man was an employee of a company affiliated with the hospital, but he was actually working for an agency that received a referral fee of 1.1 million yen ($7,200) from the nursing home for successfully referring her mother.

“I did not know that my mother was being traded for money,” said the woman, who is in her 50s, when she was informed of the fee by an Asahi Shimbun reporter late last year.

Placement agencies usually receive higher fees by referring residents who require higher levels of nursing care services. This is because care facilities are able to receive higher benefits under the long-term care insurance system.

At the request of the welfare ministry, a federation of three elderly care facility associations conducted a survey covering 520 agencies between November and December. It received responses from 213 businesses.

The average referral fee was 215,000 yen per resident. Thirty percent of respondents said the maximum amount was 1 million yen or more.

About half of respondents, 102, said they decide fees by taking into account levels of nursing and medical care services required for residents.

The Asahi Shimbun obtained contracts that several elderly care facilities concluded with agencies.

The contract of a nursing home in the Kansai region says it pays 30,000 yen for a resident requiring “long-term care 1” under the long-term care insurance system and 500,000 yen for one who requires “long-term care 5,” the highest level of nursing care services.

If residents receive home-visit care three times a day, the fee rises to 70,000 yen for a “long-term care 1” resident and 1 million yen for a “long-term care 5” resident.

Residents and their families are often not aware that elderly care facilities pay fees to placement agencies.

As agencies prioritize the potential amount of fees they can charge, many elderly people cannot move into facilities of their choice. 

The welfare ministry deems it inappropriate for elderly care facilities to determine referral fees based on required levels of nursing care services.

In a notification issued in December, the ministry instructed local governments to give guidance to facilities regarding fees.

However, the guidance does not cover placement agencies.

The welfare ministry is concerned that elderly care facilities may appropriate part of nursing care benefits they receive under the long-term care insurance system for referral fees.

The notification said the practice of referral fees could lead to wasteful use of social security expenses.

A few months after her mother was admitted to the nursing home, the woman in Osaka Prefecture received a call from the man.

He said a room had opened up at a facility near her home. She decided to relocate her mother even though she had to pay cleaning and moving costs. 

An official at the first nursing home said the area has many facilities and there is never an instance where a specific one is fully occupied and cannot accommodate a new resident.

“I suspect the agency tried to obtain a fee again from the second facility,” the official said.

The woman said, “Looking back, it was a mistake to believe that someone (the agency) would work for you for free. I was stupid.”

(This article was written by Shinya Sawa, a senior staff writer, Yosuke Takashima and Ai Asanuma.)

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