- Many individuals and families are highly stressed and in crisis when a nursing home placement is necessary
- Nursing homes often demand that a family member guarantee payment of monthly charges in the admission agreement
- This article discusses Federal and New Jersey State law(s) that prohibit third party guarantees of nursing home bills
Many families are in crisis when it comes time to moving a family member into a nursing home. Often residents admitted to nursing facilities are experiencing decline in mental capacity resulting from Alzheimer’s disease or other forms of Dementia or other ailments which limits their ability to negotiate an Admissions Agreement. This is an extremely stressful time for both residents and their families who are often in crisis and will agree to almost anything to obtain needed healthcare services. The nursing home knows this and writes their Admissions Agreement in terms much more favorable to the facility then to the resident.
The Nursing Home Reform Law is a Federal law that offers expansive rights to residents and their families when it comes to relationships with nursing homes.
This blog will address one important topic, that being, the illegality of third party guaranty of payment.
Federal and NJ Law Prohibits Nursing Homes from Demanding Personal Guarantee of Payment
Under the law, facilities are prohibited from requiring a third party (i.e. child, spouse, sibling, friend etc.) to guaranty payment to the nursing home as a condition of admission or continued residence. Notwithstanding this prohibition many facilities often use terms like “responsible party” or other similar language which suggests that the person signing the Agreement is guaranteeing the payment. Sometimes in addition, the facilities will take the position that the signator, who is a Power of Attorney, relative or friend, takes on liability as a volunteering to guarantee payment in order to allow the loved one to gain admission.
Under Federal law, a nursing facility can neither require nor request a third party guaranty. One must, however, be very careful not to convert assets to his or her benefit which deprives an individual from eligibility under Medicaid. To do so will likely result in a breach of contract claim against the person who misappropriates these funds. There is case law which has held agents liable for breach of contract when they misappropriate funds and fail to achieve Medicaid eligibility.
If you have any questions concerning Admissions Agreements and/or your rights under the Federal Nursing Home Reform Act and New Jersey regulations, do not hesitate to contact the undersigned. We have considerable experience in our dealings with nursing homes in the State of New Jersey.
To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Medicaid Eligibility and Asset Protection Attorney