Agreements With Facilities – What You Need To Know
Years ago a man came to me with a document asking me to review it before he signed. It was a Release and I congratulated him for having it examined before it was signed. Too often I am consulted after damage has been done. His common sense answer stayed with me. “It is a legal document. I figured a lawyer should see it before I signed.”
I think of that simple explanation sometimes when told by adult children of aging parents or by spouses whose husband or wife needs care that they “only” need to complete an Application for Assisted Living or for Admission to a Continuing Care Retirement Community or Skilled Nursing Facility or to complete a benefits application and they figure that they can do it on their own.
There are specific questions that the trained eye looks for that are not generally apparent to the person completing the form. While everything might be fine, there are legal consequences to agreements and it is essential to know what is being agreed.
Applications for admission to a facility are a case in point. Families often first go through a round of document signing when admitting their loved one to the hospital. With discharge around the corner, they look for a facility where their family member can rehab under Medicare or they depend on a hospital discharge planner for a placement.
With all this paper overload, people may or may not be reading what they sign. They just want services to begin. Here are some legal issues to consider.
Are You a Guarantor, Indemnitor, Responsible Party, Power of Attorney or Just a Family Member? It is important to know what legal responsibility, if any, the person who signs her parent or spouse into a facility has, especially regarding payment.
Whether the family member begins his stay in a skilled nursing facility under Medicare and his private health insurer and stays beyond this point or begins in private pay status in a nursing home, assisted living or rehabilitation facility, all agreements will say that he is responsible for payment from his own assets and rightly so.
If the resident cannot sign, his Power of Attorney or Responsible Party or family member will often sign. This is where things can get tricky. Is a Power of Attorney, Responsible Party or family member also responsible to pay for a parent’s care, for example, from her own assets? It depends.
First, as to skilled nursing facilities that take Medicaid, under federal law, the facility cannot demand payment from an adult child or Power of Attorney from their own funds. However, this status has been made less clear in the past few years by a Pennsylvania law regarding what is referred to as “filial responsibility.”
An Assisted Living facility, since it does not take Medicaid, could ask the person who is signing his parent in to also act as a “Guarantor” or “Indemnitor.” Generally, this means that the adult child is agreeing to pay from his own assets if his parent’s assets are insufficient or unavailable. If that is not the intent, he should not sign using these terms.
An adult child who is Power of Attorney will typically sign that he will spend his parent’s assets to pay for his parent’s care but not his own. However, a Power of Attorney is obligated to act responsibly.
The term “Responsible Party,” often seen in agreements, is ambiguous. It should mean only that this person is the contact point and not a Guarantor or Indemnitor. However, considering the stakes, it is best that a person who signs as “Responsible Party” or “Power of Attorney” state the word “Only” after either of these designations.
Are Health Insurance, Prescription Drug Coverage, Arbitration and other provisions understood? Some facilities disfavor certain health insurance coverages and one form in the stack could be a request to a health insurer to discontinue that coverage in favor of basic Medicare. A facility can and often does have its own prescription drug provider. If the family wants other arrangements, this should be discussed. A request from the family to bring in outside additional services, if desired, should also be decided up front.
A family might be asked to sign away rights to bring legal action except under arbitration. Certain minimum advance payments may be required even if the resident leaves after a brief stay.
All of these legal issues should be understood, discussed, and resolved in advance so that families know the terms of their agreement
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.