Most people spend more time reviewing their contract for a car than understanding the contract for their loved one’s nursing home. The best approach for anyone contemplating an admission of a loved one to a facility is to understand the law AND the contract prior to signing.
A common question is whether a family member or friend can be held fiscally responsible for a resident’s care?
The immediate answer is no—not personally.
The Federal Nursing Home Reform law prohibits a nursing home or facility to require or even ask for a financial guarantee. Under this law a friend or family cannot be asked to take on any financial responsibility even if they co-sign an admission agreement. However, there are nursing homes that choose to ignore this law and still try to get a “responsible party” co-signer.
You need to read your contract or have an elder law attorney read it for you. The end result of the failure to understand could be an unwanted lawsuit. A family member might not have the wherewithal to fight and might just pay the nursing home when they are not obligated to do so.
I think the confusion lies where a person signs as their loved one’s AGENT with access to the resident’s income or assets to pay the bills. This person could be agent under a power of attorney) combined with a nursing home contract that may actually be illegal and in violation of the federal law. An agent under power of attorney should only be responsible to the extent of the resident’s assets. Sometimes the agreements will require agents to apply the resident’s resources to pay the nursing home expenses AND apply for Medicaid on the resident’s behalf. A Medicaid application if complex and is not for an inexperienced agent.
Some courts have decided that an agent violates their duties in the agreement and must pay care costs as claimed by the nursing home. There is a question of whether or not an agreement of the type placing conditions like applying for Medicaid is enforceable. The only clear thing is that if an agent uses a resident’s money for luxury items or other people’s expenses, they could be liable.
Given the complexity of the contracts to be signed, and the need to really understand the duties of being an Agent under Power of Attorney, the best advice is to contact an Elder Law Attorney BEFORE starting the admissions process.