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  • Writer's pictureMichael Kornhauser

Seven Red Flags To Look For in a Nursing Home Admission Agreement

A nursing home admission agreement with a magnifying glass and a red flag

Placing a loved one in a nursing home is undeniably one of the most emotionally challenging processes a family can endure. Nevertheless, it’s crucial that families keep their guard up during the nursing home admissions process. Nursing homes are well aware that families may not fully comprehend what is permissible under the law. Therefore, nursing homes may insert provisions in admission agreements that are unfair or unlawful. In this blog, we reveal these red flag provisions so families can be armed with the knowledge they need before signing a nursing home admission agreement. [FN1]

1. Arbitration Clauses - 42 C.F.R. 483.70(n)

One of the most contentious provisions in nursing home contracts is the binding arbitration clause. A binding arbitration clause requires disputes (including abuse and neglect cases) to be resolved through private arbitration instead of through the public court system. Nursing homes prefer arbitration as a quick, cost-effective way to resolve allegations of abuse and/or neglect, without having a public record of such allegations and without being subjected to large jury verdicts. However, victims of abuse or neglect are often stripped of their right to present their case to a jury and their right to be fully compensated in the event of nursing home abuse or neglect. That said, a nursing home can ask a resident or his/her legal representative to sign an agreement with an arbitration clause under the following circumstances:

(a) A nursing home may not require that a resident or his/her representative sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the nursing facility. In fact, language to this effect must be included in the agreement. This ensures that no resident or his or her representative will have to choose between the resident obtaining the skilled nursing care he or she needs and signing an agreement for binding arbitration.

(b) A nursing home must ensure that the arbitration language is explained to the resident or his/her representative in a form and manner that he or she understands, including in a language that he or she understands, and that the resident or his or her representative acknowledges that he or she understands the agreement. These two requirements ensure that the arbitration agreement is transparent and the resident or his/her representative understand what he or she is signing.

(c) A nursing home must ensure that the agreement provides for the selection of a neutral arbitrator agreed upon by both parties and a venue that is convenient to both parties. These requirements helps to ensure that the arbitration process is fair to both parties, especially the residents.

(d) The binding arbitration agreement must explicitly grant the resident or his/her representative the right to rescind the agreement within thirty (30) calendar days.

(e) A nursing home must ensure that the agreement does not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including Federal or state surveyors, other federal or state health department employees, or representative of the Office of the State Long-Term Care Ombudsman. This protects the resident and his or her representative from any undue influence by the nursing home to not discuss the circumstances surrounding a concern, complaint, or grievance.

(f) A nursing home must retain copies of the signed agreement for binding arbitration and the arbitrator’s final decision for five (5) years after the resolution of any dispute resolved through arbitration with residents and make these documents available for inspection upon request by the Centers for Medicare of Medicaid (“CMS”) or its designee (i.e., the Agency for Health Care Administration). This ensures that CMS can obtain information on how nursing homes are using the arbitration process, and the outcomes for residents.

2. Financial Responsibility of Third Parties - 42 CFR 483.15(a)(3)

A common question we typically see is, “Am I financially responsible if I sign a nursing home admission agreement for someone else?” The answer is generally “No”. A nursing home that participates in the Medicare and/or Medicaid programs can neither request nor require a third-party to guarantee payment to the facility as a condition of admission, expedited admission, or continued stay in the facility. As an example, the nursing home admission agreement cannot require a son or daughter (or anyone else) to guarantee payment to the facility if Medicare, Medicaid, or any other payor source fails to cover some or all of his or her parent’s care, treatment, room, and/or board. Even if someone unknowingly signs this provision, it is unlawful and cannot be enforced. That said, be wary of a facility’s attempt to classify you, the third party, as a “responsible party” or “guarantor”. Third parties should only be signing the admission agreement in the following capacities:

(a) for [insert resident’s name],

(b) as agent of [insert resident’s name],

(c) on behalf of [insert resident’s name],

(d) as legal representative for [insert resident’s name],

(e) as power-of-attorney (POA) for [insert resident’s name], or

(f) as court-appointed guardian of [insert resident’s name].

That said, a nursing home may request and/or require that a resident’s legal representative with legal access to the resident’s income and resource use those funds to pay for care and treatment, where necessary, so long as the resident’s legal representative is not incurring any personal financial liability. What this means is that if a resident’s daughter is acting on behalf of her mom under a Durable Power of Attorney (and that documents grants the daughter the authority to handle her mom’s finances), then the nursing home can require the daughter to use her mom’s money to pay facility charges. However, the daughter cannot be required to use her own money to satisfy facility charges.

3. Waiver of Rights - 42 C.F.R. 483.15(a)(2)

A nursing facility may not require residents or potential residents to waive their rights, including their rights to Medicare or Medicaid. In other words, a facility cannot admit a resident on the condition that he or she not apply for Medicare or Medicaid benefits. Further, a nursing home cannot require residents or potential residents to waive facility liability for losses of personal property.

4. Additional Charges for Services Covered by Medicaid - 42 C.F.R. 483.15(a)(4); 42 C.F.R. 483.10(f)(11); and 42 C.F.R. 483.10(f)(17)-(18)

A nursing home may not charge, request, or even accept any amount on top of that which should be covered by Medicaid as a precondition of admission, expedited admission, or continued stay in the facility, unless such funds considered a charitable donation unconnected to a particular Medicaid-eligible resident. Therefore, if, for example, a nursing home required an additional sum on top of the daily Medicaid rate, that additional sum would be unlawful. That said, a nursing home may charge a Medicaid resident for services that are not covered by Medicaid, so long as the nursing home gives advanced notice of the availability and costs of such services and so long as use of such services are not deemed a condition for admission or continued admission in the nursing home.

5. Restrictive Visitation Policies - 42 C.F.R. 483.10(f)(4)

Generally, a nursing home cannot limit visitation or set visitation hours, unless there is a safety or clinical reason for doing so (e.g., COVID-19). In other words, a nursing home resident has the right to receive visitors at any time, so long as said visitation does not impose on the rights of any other resident. If a resident shares a room with another resident, off-hours visitation might interfere with another resident’s ability to sleep. Under these circumstances, visitation can occur in the facility’s common areas. Be wary of a nursing home attempting to limit visitation.

6. Liability Waivers

A nursing home cannot require residents (or their legal representatives) to sign liability waivers, to agree to a cap on damages in the event of a dispute, or to agree to waive punitive damages. Florida courts have found these provision to be unenforceable public policy violations that directly frustrate the remedies created by statute. Gessa v. Manor Care of Florida, Inc., 86 So. 3d 484, 493 (Fla. 2011).

7. Unilateral Modification of Terms

A nursing home should not be able to modify the terms of a nursing home agreement without written consent. Therefore, be wary of any language that allows the nursing facility to unilaterally modify the terms of the admission agreement, even if notice of such modification is provided.

By understanding the legal implications of certain nursing home admission agreement provisions, you can better protect yourself or your loved one.

FN1: Paragraphs 1-6 only apply to Medicare and/or Medicaid providers.


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