Admitting a loved one into a nursing home can be an extraordinarily stressful experience, even when you know it is the best option for your loved one and for you. Yet it is precisely at this emotionally challenging time that you must wade through the nursing home’s admission paperwork and examine the fine print. To avoid costly mistakes, it is important that you go slowly and read carefully. There are two items to which you should pay particular attention: financially responsible party and mandatory arbitration.
# 1 -Financially Responsible Party
Federal law prohibits nursing homes from requiring a third party to guarantee a resident’s bills, even if the resident is currently receiving Medicaid benefits or applying for them. Notwithstanding, you may discover language in the nursing home agreement asking you to sign as the responsible party. If you do that, you could be vulnerable to legal and financial difficulties in the future.
If the resident cannot sign him/herself and you must sign – as is usually the case – you should make it clear that you are not signing as the personal guarantor. Do this by crossing out and initialing any language that refers to your being the financial guarantor. Then write the patient’s name, and next to it sign your name as the power of attorney or health surrogate.
If possible, wait to sign the paperwork until after your loved one has moved in, when you will have more leverage. However, this is not always possible.
Keep in mind that regardless of how you sign the paperwork, any assets you own jointly with the nursing home resident may cause your loved one to be denied Medicaid. This is something that should be discussed, as far in advance as possible, with a knowledgeable elder law attorney.
# 2 – Mandatory Arbitration Agreement
Another item to watch out for is the mandatory arbitration agreement. It can be hard to spot. It might appear somewhere in the main pages of the agreement, or in a separate attachment. Signing the mandatory arbitration clause means that if your loved one is ever harmed or neglected in the facility, you forfeit your right to sue the facility. Instead of going to court, you have agreed to resolve the matter through arbitration.
Just what is the problem with mandatory arbitration? After all, proponents say that the process keeps nursing home costs down for all. But there are several reasons to not agree to it. First, the nursing home gets to pick the arbitrator, which tends to favor the facility: A 2009 study by the American Health Care Association found that cases settled with arbitration resulted in awards 35% lower than cases in which the plaintiff sued in court. Second, an arbitration ruling typically cannot be appealed.
The Obama Administration sought to ban mandatory arbitration clauses from nursing home admission agreements. But after several legal challenges over the years, the clause has survived, albeit with new controls and regulations governing its usage, including:
- The nursing home must explain the clause to you.
- The nursing home must make it clear the signing is purely voluntary.
- If you do not sign, your loved one cannot be denied admission.
- If you do sign, you retain your right to take any future grievances to local, state or federal authorities.
- You have 30 days to rescind if you sign but then change your mind.