Sunday, July 16, 2017

How to Protect Yourself when Signing Nursing Home Admission Agreements

Placing a family member in a nursing home is a difficult and traumatic event. One of the obstacles to be overcome is reviewing and signing the facility’s admission paperwork. This typically involves many pages of complicated provisions and jargon. There is a temptation to just sign wherever directed without even trying to read and understand the terms.
It’s best to try to overcome the urge to get this onerous task over with as quickly as possible. This paperwork is important. And by signing the admissions paperwork you may be agreeing to be personally responsible for the costs of your family member’s care.
Of course it would be ideal to have a lawyer review the paperwork and explain it to you before you sign. But, that may be unrealistic given the demanding and stressful circumstances. You may be pretty much on your own.
The law does provide some protections for caregivers who find themselves confronted with nursing home admissions paperwork. The Nursing Home Reform Act prohibits certain types of conduct by skilled nursing facilities that participate in Medicare and/or Medicaid.
Unfortunately, the reality is that some nursing facilities include illegal provisions in their admission contracts. I recently encountered an otherwise respected nursing facility that was attempting to have a family member sign as a “co-signer guarantor” to personally guarantee the payment of all charges incurred by the resident. The guaranty read in part: “If the resident does not or cannot pay, I will pay the amount owed to [nursing facility] for residency charges, services, equipment, supplies, medication, and other charges.”
It didn’t matter that this type of third party guarantee provision has been prohibited since the Nursing Home Reform Act was implement more than 25 years ago. There it was – in this nursing home contract in 2017. When the family member questioned this provision he was told that signing it was required. It wasn’t until an elder law attorney (me) spoke with the facility’s chief financial officer that the facility backed off with an apology.
The prohibition of third party guarantee agreements is not a hidden or ambiguous part of the law. I’ve reproduced the relevant section of the regulation below.
The bottom line is – take care to review nursing home admission paperwork and know what you are signing. It is a legal agreement that could put you on the hook for tens of thousands of dollars.
Get the paperwork reviewed by your lawyer if you possibly can do so. If not, try to educate yourself as best you can ahead of time. Strike out and initial provisions to which you do not want to agree. Sign the paperwork as the representative of the resident only and try not to take on personal liability. For example, you can sign the line for the signature of the applicant/resident in a way that shows you are signing only in the capacity of being the agent of the resident: “John Resident by Family Member, his agent.” Try to avoid signing as “responsible party” or “guarantor.”
Be aware that if the resident has already been admitted to the facility and moved in, there are only a few reasons that can cause them to be discharged. (I’ve reproduced the regulation stating the 6 reasons for discharge below). A family member’s refusal to sign an agreement to become personally responsible for the cost of care is not one of those reasons.
The Regulations
The federal requirements for skilled nursing facilities can be found at 42 CFR Part 483, Subpart B. Section 483.15 of these regulations lays out the requirements regarding admission policies. I’ve highlighted subsection 3 which prohibits facilities from requesting or requiring a third party guarantee of payment.
(a)Admissions policy.
(1) The facility must establish and implement an admissions policy.
(2) The facility must -
(i) Not request or require residents or potential residents to waive their rights as set forth in this subpart and in applicable state, federal or local licensing or certification laws, including but not limited to their rights to Medicare or Medicaid; and
(ii) Not request or require oral or written assurance that residents or potential residents are not eligible for, or will not apply for, Medicare or Medicaid benefits.
(iii) Not request or require residents or potential residents to waive potential facility liability for losses of personal property
(3) The facility must not request or require a third party guarantee of payment to the facility as a condition of admission or expedited admission, or continued stay in the facility. However, the facility may request and require a resident representative who has legal access to a resident's income or resources available to pay for facility care to sign a contract, without incurring personal financial liability, to provide facility payment from the resident's income or resources. [emphasis added]
(4) In the case of a person eligible for Medicaid, a nursing facility must not charge, solicit, accept, or receive, in addition to any amount otherwise required to be paid under the State plan, any gift, money, donation, or other consideration as a precondition of admission, expedited admission or continued stay in the facility. However, -
(i) A nursing facility may charge a resident who is eligible for Medicaid for items and services the resident has requested and received, and that are not specified in the State plan as included in the term “nursing facility services” so long as the facility gives proper notice of the availability and cost of these services to residents and does not condition the resident's admission or continued stay on the request for and receipt of such additional services; and
(ii) A nursing facility may solicit, accept, or receive a charitable, religious, or philanthropic contribution from an organization or from a person unrelated to a Medicaid eligible resident or potential resident, but only to the extent that the contribution is not a condition of admission, expedited admission, or continued stay in the facility for a Medicaid eligible resident.
(5) States or political subdivisions may apply stricter admissions standards under State or local laws than are specified in this section, to prohibit discrimination against individuals entitled to Medicaid.
(6) A nursing facility must disclose and provide to a resident or potential resident prior to time of admission, notice of special characteristics or service limitations of the facility.
(7) A nursing facility that is a composite distinct part as defined in § 483.5 must disclose in its admission agreement its physical configuration, including the various locations that comprise the composite distinct part, and must specify the policies that apply to room changes between its different locations under paragraph (b)(10) of this section.
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The rules for discharging a resident are found at 42 CFR Part 483, Subpart B, Section 483.15(c):
(c)Transfer and discharge -
(1)Facility requirements - (i) The facility must permit each resident to remain in the facility, and nottransfer or discharge the resident from the facility unless -
(A) The transfer or discharge is necessary for the resident's welfare and the resident's needs cannot be met in the facility;
(B) The transfer or discharge is appropriate because the resident's health has improved sufficiently so the resident no longer needs the services provided by the facility;
(C) The safety of individuals in the facility is endangered due to the clinical or behavioral status of the resident;
(D) The health of individuals in the facility would otherwise be endangered;
(E) The resident has failed, after reasonable and appropriate notice, to pay for (or to have paid under Medicare or Medicaid) a stay at the facility. Non-payment applies if the resident does not submit the necessary paperwork for third party payment or after the third party, including Medicareor Medicaid, denies the claim and the resident refuses to pay for his or her stay. For a resident who becomes eligible for Medicaid after admission to a facility, the facility may charge a resident only allowable charges under Medicaid; or
(F) The facility ceases to operate.
Further Reading
An excellent online resource for learning about the rights of nursing home residents and their families is the website of the National Consumer Voice.

Be aware that in some states, including Pennsylvania, family members can become liable for a parent or child’s unpaid cost of care under what are known as filial support laws. See my article on this subject: Law can require children to pay support for aging parents. It’s a good idea to meet with an experienced elder law attorney as soon as possible if your parent or spouse r needs nursing home care.

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