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Protecting Yourself When a Loved One Enters a Nursing Home

We are taught from an early age to “act responsibly.” A responsible person generally takes care of their personal and financial affairs in a mature way and honors their obligations.

When a person is considered to be irresponsible, we see them as immature, selfish, unconcerned with the consequences of their actions, and untrustworthy. If you need something important done you would never ask an irresponsible person to undertake the task. We especially want to act responsibly when it comes to the care of our loved ones.

So it may come as a surprise that there is a time when you need to be ready to turn down the invitation to declare yourself a “responsible party.”  That time is when they are entering a nursing home or other rehabilitation care facility.

Helping a loved one make the transition to a long term care nursing or rehabilitation facility, especially when there is little or no expectation of a return home, is a time fraught with emotional difficulty and stress for all involved. There are many pressures and those involved may not be thinking as clearly as they might in other circumstances, and all may be in an emotionally fragile and vulnerable condition. A son or daughter who is trying to help their parent transition to a nursing facility may be willing to sign nearly anything asked of them without asking many (if any) questions about what they are signing, and therein lies an underappreciated danger.

Admission to a nursing facility is a complicated matter.   Many forms and documents need to be signed. They are of varying importance.   One package I looked at recently had well over 30 pages and at least 11 places for the soon to be resident to sign, not including initialing the bottom of many more pages. As in mortgage closings, the sheer number of documents may have the effect of numbing those involved to what the documents say.   

What should you do if you are asked to sign documents as a “responsible party,” perhaps because you hold a power of attorney given to you by a parent or other loved one, or because you are the spouse of the person to be admitted? 

Well, increasingly lawyers who speak at seminars on this topic are saying that you should be very careful when asked to sign documents related to the admission of a loved one to a nursing facility, and if possible not do so.

This advice is given because the obligations of a responsible party as described in some nursing facility’s documents are open-ended, vague, ill-defined, and hard to perform even with diligence. And if the nursing facility is not paid for its services, as the “responsible party” you may be on the unpleasant end of a lawsuit for a large sum of money.  

Now, it is perfectly reasonable for a nursing facility to want to know that it is going to be paid for its services.  The person being admitted is the one who should sign all admission documents, and be responsible for and direct payment for services. 

But if the person being admitted lacks capacity to direct payment or to sign the admission documents, this is when loved ones can, unwittingly, expose themselves to liability for the costs of care.  

Some have come to me, after signing admission agreements as the responsible party for a loved one, and said “well, I was told I was not a guarantor, and it says so right here in the documents, so how can they be saying I’m liable for Mom’s cost of care?”   

Let’s consider the difference between a “guarantor” and a “responsible party.” A guarantor is one who affirmatively agrees to be personally responsible for the debts or obligations of another person. (The working definition of “guarantor” in legal circles is “an idiot with a pen.”)

Under federal law, nursing facilities cannot require a person “guaranty” the cost of care in the facility.   But, for those sued as responsible parties, it can feel as if they are being treated as a guarantor.   

What it means to be a responsible party will vary from one facility to another, depending upon the language of the admission agreement. This is a contract between the facility and whoever might agree to sign as a responsible party.

Nursing homes are allowed to require “an individual who has access to a resident’s income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident’s income or resources for such care.” For more information on this requirement, see 42 USC 1396r(c)(5)(B)(ii).

This sounds reasonable. However, the obligations of the responsible party under the language of many admission agreements can go far beyond this. 

How, you might ask, does that happen? Well, the lawsuits that are brought against the responsible parties by nursing facilities are based not on any guaranty. Instead, they are based on claims of breach of contract for alleged failure of the responsible party to perform the obligations they agreed to when declaring themselves the responsible party for the loved one.

The duties that a responsible party might fail to perform typically include failing to act promptly and expeditiously to establish and maintain eligibility for Medicaid assistance, including but not limited to taking any and all necessary action to ensure that the resident’s assets are appropriately reduced to remain within allowable limits for Medicaid. Responsible parties have been sued by nursing facilities where, for one reason or another, Medicaid benefits have not been obtained and the nursing facility suffers a loss.

It is quite a process to qualify a person for Medicaid benefits and some persons are not eligible for benefits for reasons that are sometimes unknown at the time of admission.  One can act in good faith and act diligently to pursue Medicaid benefits, but fail to obtain them, and if you have agreed to serve as a responsible party and the nursing home goes unpaid, you should expect to be sued personally, even if you carefully signed all the documents as “POA” (power of attorney) and not as the “responsible party”. 

I am not suggesting that it is always foolish to agree to serve as a responsible party.  And nursing homes need to know how they are going to be paid.    

I am suggesting that if you are ever asked to be a responsible party you should thoroughly and carefully read the document you are being asked to sign before signing it, and become fully informed as to all of your obligations and legal exposure. You should review the situation with an attorney who is experienced in matters of this nature before you sign the documents.   Perhaps the nursing home concerned would agree to some revisions to the documents that recite your duties as a responsible party, although I think that is not common.    

If someone tells you the documents “have to be signed” or “must be signed,” ask them why, since sometimes such a statement is simply untrue.  Find out what the consequences will be if you refuse to sign as responsible party, and make a record of what you are told and by whom. And see an attorney to get advice on what to do, and what your exposure is for signing the documents concerned.

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