Are You The Responsible Party?

By: Sanford R. Altman, Esq., retired

Question:
My father recently was admitted to a nursing home. They asked me to sign the admissions agreement as “responsible party.” Despite their assurances, some of the language got me nervous and I declined. Eventually, they accepted my father’s signature. Was I being unnecessarily cautious?

Answer:
Actually, your instincts were right on the money (no pun intended). Money is exactly what you would be responsible for. Every nursing home admissions agreement that I have ever seen first states that the responsible party is only responsible for making sure that the nursing home gets paid from the resident’s own funds. But then it goes on to say that if he does not have sufficient funds, you will help apply for Medicaid and, if Medicaid does not pay, you, the responsible party, may be called to pay from your own funds. In short, you may have dodged the proverbial bullet.

This point was vividly illustrated when a young woman came into our office who was being sued for $18,000 by the nursing home where her father resided. She reported that, at the insistence of the nursing home, she had submitted a Medicaid application on behalf of her father. Apparently, her father was not yet eligible for Medicaid since they decided that he must pay the first $18,000 before they began to pick up the tab. Since the daughter had signed the admission agreement as

responsible party, the nursing home had the legal right to look to her for payment of this amount. When she did not pay their bill, they sought to enforce this right by naming her in a lawsuit. Their case was very strong because what she had signed was a binding contract promising to pay.

While we were able to negotiate a somewhat reduced payment for this client, the fact is that it was all easily avoidable. There are two important lessons that we can take from this. First, if you are going to consult an elder law attorney, do so earlier rather than later. We have emphasized the importance of advanced planning in earlier columns. Here, even if she waited until she knew that her father needed nursing home care – usually considered to be “the last minute” – she could have been helped. For example, we might have advised her to purchase a burial trust or to spend the excess amount on allowable “spend downs.” Even such last minute planning could have avoided the entire $18,000 bill.

Second, as you probably have guessed, we would have reviewed the admissions agreement in detail and advised her not to sign as responsible party. The nursing home might have pressed her to sign and even insisted that a responsible party is necessary. It is easy to see that this could not possibly be true, because there are undoubtedly many residents who simply do not have anyone who can sign for them. Also, once the facility knows that you have an attorney, they will back off from their position of urgency. In one case, I had a brief discussion with a nursing home administrator about the provisions of the agreement that we found objectionable and she never asked our client for it again. That was rare, but it does show how little the agreement might actually mean to the facility.

What are your options? First, it is always best if everything is signed by the resident directly. Once he or she signs, there is no legal need for anyone else’s signature. If the resident has difficulty signing, you may help him sign.

If you do not have the Power of Attorney, then you may sign, “John Jones by Mary Jones.” The nursing home will probably accept this as well. Any of the above methods of signing on the line marked “resident’s signature” shows that you are not signing for yourself at all, but only on behalf of the resident. This is good practice not only for the nursing home admissions agreement, but all other documents where you might be looked on to cover your family member’s liabilities. This includes hospital admissions forms, nursing home applications, Medicaid applications, etc. Remembering this simple procedure beforehand can save you immense amounts of problems down the road.