If your loved one is entering a nursing home, you may worry whether you could be liable for their care. Under federal law, a facility cannot require a family member or friend to co-sign an admission agreement and take on personal liability. However, nursing homes around the country still try to do so, and often these matters end up in court.
What can you do to prevent this from happening to you? It starts with educating yourself on what is and is not allowed.
A law known as the Federal Nursing Home Reform Law prohibits a nursing home or facility from requiring or asking for a financial guarantee from a third party. Federal regulations regarding Medicare and Medicaid have similar restrictions.
These laws and regulations state that a home cannot have a resident's family member or friend co-sign an admission agreement to take on financial liability. However, a nursing facility may obtain the signature of the resident's agent, who has access to the resident's income or assets, agreeing to use these resources to pay for care. Still, this agreement may not impose personal financial liability on the agent.
Review Before You Sign
If you are assisting a loved one with entering a nursing home, you should carefully review all the admission paperwork before you sign it. Many facilities have unscrupulous practices of using admission agreements that violate federal law or regulations.
You do not have to sign or “volunteer” to sign a financial guarantee that makes you personally responsible. It is incorrect if a nursing home claims a guarantee is necessary because the federal law only applies to Medicaid-eligible individuals. Nursing homes are also not allowed to condition admitting or keeping a person on receipt of a third-party guarantee.
Today, the most common tactic used by nursing homes is an admission agreement that obligates the signor as an agent with supposed control over the resident's money. These agreements stipulate the agent will apply these resources to the nursing home expenses and apply for Medicaid on the resident's behalf. Often, the person signing this document doesn't know how to handle this situation, does not have this control, or makes mistakes in the resident's Medicaid application, causing coverage to be denied.
What follows may be a lawsuit by the nursing home, claiming the agent violated their duties in the agreement and must pay the care costs. Courts have gone both ways on whether these agreements are enforceable, and the agent's conduct often influences a court's decision. Egregious conduct can lead to courts ruling in favor of the nursing home. An example is where an agent used the resident's money for luxury items or other people's expenses rather than their loved one's care.
Plan Ahead As Much As Possible
The best action is to plan before nursing home care is necessary. This can put you or your loved ones in a position to be ready to apply for Medicaid should the need arise. At the same time, an aging individual can do proper asset protection planning and avoid look-back periods creditors could otherwise exploit against the resident or an agent.
However, this is not always possible for many older adults and their family members. Individuals who will take on the responsibility of being an agent should understand what this entails and seek the advice of your elder law attorney before starting the admission process.
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