Nursing Home Contracts

Can a Nursing Home Require a Resident to Privately Pay for a Certain Period of Time?:

A nursing home cannot require that a resident certifies that he or she is not eligible for Medicaid or Medicare nursing home benefits. Similarly, a nursing home cannot require a resident promise that he or she will not apply or become eligible for those benefits in the future.

Sometimes, a nursing home will request that a resident agrees to pay the private pay rate for a certain period of time. These “duration of stay” agreements are illegal for the reasons discussed in the preceding paragraph.

At the present time, nursing homes are allowed to ask a resident for information regarding his or her income and savings. Nonetheless, under certain circumstances, this practice could be challenged. This is because it could be classed as the nursing home’s submissive way of assuring that a resident will not become eligible for Medicaid in the future.

Can a Nursing Home Require a “Responsible Party” Or, in Other Words, Require a Family Member or Friend to Become Personally Liable for the Nursing Home Costs?:

The answer to this question is “no”. Federal law prohibits a nursing home from requiring a third party guarantee of payment as a condition of a resident’s admission. Therefore, a resident’s family member or friend cannot be required to guarantee the residents payments to a nursing home.

Many nursing homes, however, use admission agreements which evade the spirit and arguably, the letter of the federal law. These homes use admission agreements which correctly stated that a guarantor is not required, but then claims the party signing the contract is “voluntarily” agreeing to be responsible for the bill.

No person should agree to become a responsible party for a resident’s nursing home bills. Such an agreement cannot be required and legally can offer no benefit to the resident. Consequently, a family member must be aware of signature lines entitled “Responsible Party.” Often, these signature lines do not define the term “responsible party” but implicitly refer to the fine print of the document, which will contain language making the signing party responsible to pay for the nursing home bill.

Furthermore, a person who has signed as a financially responsible party should not assume that he or she is financially responsible for the resident’s nursing home bills. Such a voluntary promise to pay is unenforceable, because the nursing home promises nothing in return for the financial guarantee. In addition, any voluntary guarantee should be unenforceable because it is grossly unfair and unconscionable.

Can a Nursing Home Require a Deposit as a Condition for Admission?:

A nursing home cannot require a deposit from a resident if either the Medicaid or Medicare program makes payments for the resident’s stay. A nursing home, however, may require a deposit from a resident who pays for his or her stay without assistance from the Medicaid and Medicare programs.

The Nursing Home Won’t Admit My Mother Unless I Sign as a Responsible Party, What Should I Do?:

Don’t sign as a responsible party. Under federal law, the nursing home cannot require you to accept financial liability for your mother’s nursing home bill, and the Illinois Family Expense Act also does not impose such liability. By requiring you to sign as a “responsible party” the nursing home is breaking the law. Explain this to them. If the nursing home continues to insist that you sign as a “responsible party”, ask for this requirement to be in writing. Alternatively, prior to signing the document, insist that it be amended to include a statement that you are signing under duress, only to insure your mother’s admission to the home.

Can a Nursing Home Require a Resident’s Legal Representative to Apply the Resident’s Money to Nursing Home Charges?:

Yes. A nursing home may require a resident’s legal representative to apply the resident’s money to the nursing home charges, but may not require the legal representative to utilize his or her funds.

During the Admission Process, Can a Nursing Home Require That a Resident Consent to All Medical Treatment?:

No, admission agreements can solicit consent only for routine nursing or emergency care.

How Can a Resident and Family Members Recognize Problems in an Admission Agreement Before the Agreement Is to Be Signed?:

Prior to signing the document, the resident and family members should have the contract reviewed by an elder law attorney. The attorney can remove requisite provisions from the document which may pose liability and potential hardship to the resident or his/her family.They can also add provisions to protect both the resident and family members.

To summarize, keep in mind:

Family members should never sign as a “responsible party;”
Residents need not provide a deposit if they are receiving Medicaid or Medicare;
All contracts should be reviewed by an elder law attorney BEFORE they are signed to protect the family and the resident.