Signer Beware! The Pitfalls of Nursing Home Agreements

Every day, elderly Iowans enter nursing homes for the first time. For some, it's a temporary stay to recover from an injury or illness. For others, it is permanent. No matter what the situation, it can be emotionally difficult for the new resident and his or her family and friends.

Before a person enters a nursing home, they must typically wade through a hefty pile of papers. Among the pile, there will be an "Admission" agreement of some kind. This agreement will establish the basic terms for a resident's stay at the home. A family member or friend is often asked to sign this agreement on behalf of the resident. With the obvious distractions of the occasion, most people do not take the time to read and consider the specific terms of this agreement. This is a big mistake.

Family and friends should carefully read an Admission Agreement before signing. DO NOT agree to guarantee or be personally responsible for a resident's nursing home expenses. Many agreements refer to the person signing the agreement as the "Responsible Party". People who sign often assume this is merely a reference to a contact person. They don't realize that lurking somewhere in the middle of this often long document may be a potentially troublesome definition. If they looked, they might find that a "responsible party"is defined as someone who volunteers to be financially responsible for the nursing home debt.

If you have signed such an agreement in the past or are faced with such a situation in the future, you should know that "responsible party" and similar kinds of provisions are rarely enforceable. First, federal law says a nursing home cannot require a financial guarantee before they will admit a resident. Second, these kinds of provisions can often be challenged under state consumer protection laws. This is because many people who sign these kinds of agreements are not aware they could be financially liable. If so, the provisions could be considered deceptive and unenforceable. Last, the provisions may be unenforceable because the person signing receives no benefit under the agreement.

Another common problem in nursing home agreements involves future eligibility for Medicaid to pay expenses. Because of the high costs of care, residents who are not eligible for Medicaid when they enter often become eligible later. A single individual is usually eligible when they have less than $2,000 in resources. A married person can frequently be eligible with much more in resources if his or her spouse is not also in a nursing home. Some agreements try to get residents to waive their Medicaid rights or promise they will not apply for Medicaid. These kinds of provisions are illegal under federal law and cannot be enforced.

If you are helping a family member or friend enter a nursing home, read all documents carefully. Get copies of the admission papers well before the person enters. This way you will not feel pressured to hurry through or not read the documents. If you do sign, make sure it is clear you are not personally liable. If you are a power of attorney or guardian, make sure you sign only in that limited capacity. For example, after your signature, you should write "as power of attorney for ________" or "as guardian for ________."

If you have signed an agreement in the past containing improper or illegal language, or are faced with signing such an agreement in the future, you should demand that the nursing home delete or mark out the offending language. If they refuse, you should contact an experienced attorney, the office of the Long-Term Care Ombudsman at (800) 532-3213 or the Legal Hotline for Older Iowans. Iowans 60 and over may also contact the Legal Hotline for Older Iowans with other questions about nursing homes and payment options.

Iowa Legal Aid provides help to low-income Iowans. 

To apply for help from Iowa Legal Aid:

• Call 800-532-1275. 
• Iowans age 60 and over, call 800-992-8161.
• Apply online at iowalegalaid.org

If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer”   A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.

*As you read this information, remember this article is not a substitute for legal advice.