They cannot require you to be financially responsible for your loved one’s care.
Approximately 48 million adults in the U.S. are caring for an adult with health or functional limitations, and nearly one in six is adults is caring for someone aged 50 or older through illness or disability. Nursing homes and residential care facilities play an important role in caring for these older Americans and for people with disabilities. Unfortunately, some nursing homes are employing an illegal strategy to ensure that a resident’s fees are paid: requiring a third party, such as a caregiver or family member, to personally guarantee payment to a facility as a condition of a resident’s admission. Nursing homes then rely on the third-party guarantee to sue these family and friends to collect on the unpaid debts of the resident. Both practices are prohibited by federal law.
The decision to place a loved one in a residential facility is often a difficult one, which can be further complicated by financial limitations or by difficulty locating a facility in a convenient location for family or caregivers. The scarcity of suitable, nearby nursing homes can be even more acute in rural areas. This can cause a caregiver undue stress during the admissions process.
Choosing to place a loved one in a residential facility is often a complex and difficult decision, which can be further complicated by financial limitations or by difficulty locating a facility in a convenient location for family or caregivers. The scarcity of suitable, nearby nursing homes can be even more acute in rural areas. The combination of the weight of such an important decision and the strain of locating the right facility, is often then exacerbated by an admissions process that involves voluminous, boilerplate agreements to review. While many nursing homes treat caregivers with compassion, these factors can create an environment where there is no meaningful opportunity to read, negotiate, or understand these important documents.
As a result, friends or family members may be signing contracts that contain language that attempts to hold them responsible for the resident’s financial obligation as a condition of admittance or continued residence. This can appear as a clause that holds both the resident and caregiver “personally liable” for payment, or a clause asserting that the caregiver, as a “responsible party,” is liable for payment if the resident’s Medicaid application fails. Such contract terms are a violation of federal law. Caregivers must also be wary of language indicating they are “voluntarily” taking on the financial liability for the resident’s costs. The National Center on Law and Elder Rights reports that these “voluntary” guarantees are unenforceable under the Nursing Home Reform Act because “a financial guarantee cannot be quid pro quo for a resident’s nursing facility stay.”
It’s important to note that not all third-party signatures required by a nursing home on admission documents violate federal law. A caregiver of a nursing home resident must often sign documents when they act as the resident’s agent under a Power of Attorney. Signing an agreement as an agent does not bind the resident’s agent to the agreement, it only obligates the resident.
Thankfully, important legislation has been passed to support and protect adults residing in nursing homes and their caregivers from the financial harm that might result from these tactics. The Nursing Home Reform Act and the regulation it enacts prohibits these types of contract terms. Other federal law, such as The Fair Debt Collection Practices Act, prohibits misleading a caregiver into thinking they are responsible for debt that is not theirs. The Fair Credit Reporting Act prohibits falsely ascribing nursing home debt to a caregiver and reporting that debt to a credit reporting agency. These laws apply to all nursing home residents, regardless of whether they are private pay or receive some or all their funding from Medicaid or Medicare.
Admitting a loved one to a residential facility can be stressful and overwhelming. Knowing your rights as a caregiver can bring some peace of mind and provide the confidence to inquire about admissions contracts that illegally obligate you for the resident’s debt. If you need guidance about a nursing facility’s admissions contract or a facing a collection action for the debt of a nursing home resident, the Elder Law Attorneys at Mandelbaum Barrett PC are available to answer any questions you may have.