Issues at Time of Admission to a Nursing Facility
Q: What should you do before signing the admissions agreement?
A: Be sure to read the agreement carefully before you sign it. Ask questions if you don’t understand something. If you are not in an emergency situation, have an attorney or someone else read the contract before you sign it. There are parts of an admission agreement which you may want to politely refuse to sign or to cross out (and initial), such as a responsible party or third party guarantee of payment provision, an arbitration agreement, or a negotiated risk or indemnification provision (see below).
Q: Can a nursing home require a responsible party or third party guarantee of payment as a condition of admission?
A: No. Both federal and state laws prohibit a nursing home from requiring a third party guarantee of payment as a condition of admission, expedited admission, or continued stay in the facility. If a third party has legal access to the resident’s income and assets (for example, by serving as the resident’s agent through the resident’s power of attorney or if appointed by a court as her guardian or conservator), the nursing home can require the third party to sign a contract agreeing to pay the nursing home out of the resident’s income or resources. In that situation, the third party would not be personally liable for the bill (out of his or her own money), unless he or she misused the resident’s money by using it to pay the third party’s bills instead of the resident’s nursing home bill.
Q. What should I do if the admissions agreement contains a responsible party or third party guarantee provision?
A: Read any responsible party or third party guarantee provision very carefully. If the provision seems to make you (as the responsible party) personally liable for the resident’s bill out of your own pocket—over and above your duty to pay the facility out of the resident’s income or resources—you should consider either refusing to sign that provision or crossing out that provision and writing your initials next to the crossed out section. You should, politely but firmly, explain that you understand such a provision to be illegal and unenforceable. The nursing home staff may be embarrassed or surprised by your refusal, and may simply go ahead with the rest of the admissions packet and not object to your refusal to sign this provision. If you have already signed an admission agreement as the responsible party and the facility is now asking you for payment or if you are sued by the nursing home for payment, you should get advice from an attorney who knows about nursing home law.
Q: What is an arbitration agreement? How is arbitration different from going to court?
A: An arbitration agreement is an agreement that any future disputes between you and the nursing home, other than those specifically excepted, will be handled by a private judge called an arbitrator, rather than by going to court. Often arbitration agreements in nursing home admissions contracts require all claims of the resident to go to arbitration, but allow the facility’s claims to be heard in court. Most advocates believe that the arbitration process is generally not good for residents. Arbitration tends to be more expensive than a case in court because the arbitrator is paid an hourly fee by the parties. Most advocates also believe that courts are generally more sympathetic to the kinds of cases a resident or her family might bring against a nursing home than an arbitrator would be. It is best to make a decision about arbitration after a dispute has arisen and after talking with a lawyer, rather than agreeing to arbitration at the time of admission before any dispute has arisen.
Q. Should I sign an arbitration agreement which is part of the admissions agreement or contract with the nursing home?
A. Not if you can avoid it. If possible, you should avoid signing the arbitration agreement at the time of admission. Often, the facility will not object if you or your representative simply refuses to sign the arbitration agreement. You can say you’d prefer to make the decision about arbitration after a dispute has come up, but do not want to commit to arbitration now.
Whether or not you have signed the arbitration agreement, if the facility attempts to send your claim against the facility to arbitration, you should contact an attorney right away. The agreement may or may not be binding, depending on the circumstances surrounding the signing, the language or terms of the arbitration agreement, who signed it, etc. Before agreeing to have your claim sent to arbitration, check with an attorney to see if there is a way to challenge the arbitration agreement.
Q: What is a negotiated risk or indemnification provision (also called a “hold harmless” or “limitation of liability” provision)?
A: An indemnification or negotiated risk provision essentially says the facility does not provide one-on-one care 24 hours per day and that the facility will not be liable for any injuries to a resident which result from the resident’s decision not to obtain supplemental private duty nursing care.
Q: Should I sign a negotiated risk or indemnification provision if it is included in the admissions agreement?
A: Do not sign such a provision if you can avoid it. Nursing homes are obligated, by law, to have sufficient nursing staff to provide nursing and related services “to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.” The resident should not have to pay extra for private duty nurses, in addition to the monthly nursing home bill, in order to receive adequate care. No facility should be able to avoid liability for the negligence of its staff by, in effect, blaming the resident for failing to hire private duty nurses. If such a provision is in the admissions contract, consider crossing out that provision and initialing the crossed out provision to show your refusal to be bound by that section.
Q: Can a nursing home require an applicant to make a donation or gift, or promise to pay at the private pay rate for several months?
A: No. Because the facility receives a higher monthly payment rate for a private pay resident than for a Medicaid-eligible resident, a facility may prefer to admit a private pay resident instead of a Medicaid applicant. The facility may want some assurance that an applicant will be a private paying resident for some specified length of time. As to any Medicaid-eligible resident, a nursing home may not charge, request, accept, or receive any gift, donation or other consideration, other than what is allowed by the Medicaid state plan, as a precondition of admission, expedited admission or continued stay of the individual in the nursing home.
In addition, a facility cannot require a resident or potential resident to waive his or her right to Medicaid or Medicare, or require any promise that a resident or potential resident is not eligible for, or will not apply for Medicare or Medicaid. Under federal law, a facility cannot require an applicant to promise to pay the private pay rate for a period of time, because such a promise would prevent the resident from applying for Medicaid as soon as he becomes eligible.
Q: Can a nursing home treat Medicaid residents differently from private pay residents?
A: No. Federal law says that a nursing home “must establish and maintain identical policies and practices regarding transfer, discharge, and the provision of services required under the State [Medicaid] plan for all individuals regardless of source of payment.” Medicaid-eligible residents should receive the high-quality care required by federal law, without any discrimination based on payment source (or amount).