When an individual moves into a nursing home for long-term care, there are an array of admissions documents that get signed. These include everything from personal preferences information to insurance and financial disclosures, medical releases, selection of physicians etc. One of these documents contains the contract for payment for the services being rendered.
Typically, the contract contains the daily rate and potential add-on charges, as well as information concerning the obligation to pursue potential Medicaid eligibility. The party signing the contract agrees to pay the bill and to file a Medicaid application in a timely way, and to pursue that Medicaid application process by providing necessary documentation to the board of social services. Who should sign the contract? Why do they tell you it’s “just a formality” to sign as the Responsible Party?
Nursing homes are regulated by the state and federal governments. The law prohibits a nursing home facility from requiring a third party guarantee of payment as a condition of admission to the facility http://www.ecfr.gov/cgi-bin/text-idx?rgn=div8&node=42:184.108.40.206.220.127.116.11 [41 CFR 483.12(d)(2)]. These are among many protections contained in the federal Nursing Home Reform Act, http://www.law.cornell.edu/uscode/text/42/1395i-3 [42 USC 1395i–3(c), and the NJ law is at NJSA 30:13-3]. Nevertheless, it is not uncommon for nursing facilities to request that a family member or friend also sign the Admission Agreement as a “responsible party.” There is typically an optional signature line for the “responsible party.” Be careful! If you willingly and knowingly choose to take on that responsibility, you may find that you’ve made a binding contract to personally pay the nursing home if the resident fails to pay or fails to become eligible for Medicaid.
The admission contract should be signed by the incoming resident. It can also be signed by the spouse, because — at least under NJ law — married people who reside together are legally responsible for each other’s “necessary” medical bills . This post, though, is really a caution to the non-spouse who is involved in the situation. If the resident is incapable of signing the contract themselves, the legal representative should sign on behalf of the resident, and should clearly indicate his/her role. The legal representative would be either the court-appointed Guardian or the person who is the Agent under Power of Attorney. Either way. the legal representative is the person who manages the funds and government benefits for the applicant, and basically “stands in the shoes” of the applicant. By signing the contract on behalf of the resident, they take on the obligation to make sure they pay the bill from the resident’s income or assets and to file a Medicaid application when that becomes necessary.
Although a nursing home is a health care facility, the admissions contracts can be complex. Legal advice is useful to make sure your interests are protected.
For advice on nursing home admissions, Medicaid and elder care, call 732-382-6070