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NURSING HOME ADMISSION AGREEMENTS

Anthony T. Ballato, Esq

Monday, July 09, 2012

NURSING HOME ADMISSION AGREEMENTS

WARNING:  CONSULT WITH YOUR LAWYER BEFORE SIGNING

In the event of entering any agreement on your behalf or on behalf of anyone else, it is important to do at least the following before signing the agreement:

  1. Read the agreement in its entirety and be sure that it provides all of the material terms and understandings of the parties and be sure you understand it.  Do not hesitate to ask for clarification or changes.
  1. Be sure that the agreement does not provide any uncertain or objectionable terms or omit any terms that are part of the understanding.  In other words, do not rely upon sales staff or other persons on the other side of the transaction of representations to the contrary or missing from the written agreement.
  1. Be sure that all parties to the agreement duly sign same and initial all pages of the agreement and where required that same is also witnessed and / or signed by a Notary Public.  All too often parties or even their attorneys are too careless in failing to have all pages and all changes initialed, which can lead to expensive and protracted litigation, especially where there were different drafts of the agreement.
  1. Reduce any important agreements to writing to avoid future misunderstandings and to improve your chances of enforcement of the contract or to seek remedies or damages in the event of a breach of the contract.

    This also applies to friends and relatives who all too often fail to put important or long duration transactions into written agreements which may lead to unenforceable rights under the Statute of Frauds writing requirements that pertain to certain agreements, which generally are those between spouses and pre or post nuptial agreements, involving the sale of goods in excess of $1,000.00, those agreements which by their terms cannot be completed within one (1) year, any conveyances of real estate, any leases in excess of one (1) year and other transactions or agreements which by statute are required to be in writing and signed by the parties to be enforceable.

There is reason to be concerned when the other side tells you not to worry about the contract or to excuse the formalities of a written agreement.  The proper response may be that to do so is not a question of trust, but rather helpful to memorialize the understanding between the parties least memories fade and so as to avoid any future disputes.  Frankly, trust and integrity maybe a concern where the other party opposes any written agreement.

In the case of nursing homes and hospitals, quite often a relative or friend is rushed into admission under emergency circumstances while perhaps incapacitated, unconscious or suffering from dementia and the healthcare provider seeks to have someone other than the resident or patient sign the admission papers “on their behalf” while stating that there is no personal liability for doing so.  That is most untrue!  Buried in those admission papers are the imposition of certain obligations of the signor, agent or “personal representative” of the resident or patient of the nursing home or hospital to perform a number of duties, including, among others, to gather and submit important papers necessary for the processing of insurance, Medicaid or Medicare applications, transferring available resources, income or assets of the resident or patient to the provider as well as may serve as the basis for other claims of unjust enrichment, fraudulent conveyances of assets, breach of contract or other causes of action against the person(s) who signed the admission papers or agreement, notwithstanding no wrong doing on behalf of the good Samaritan, friend or relative of the resident or patient and then sued for the entire unpaid balance of services, medications, etc. that can run into the substantial sums. 

This unnecessary liability, especially those other than those of a parent of an infant patient or spouse of a patient where there may be common law and / or statutory duty of support or to pay for necessaries could be completely avoided by just not signing the admission papers or being extra careful to ensure there is absolutely no personal liability.  This has become a hot topic of controversy between collection attorneys representing the providers and consumer advocates representing those persons being sued on behalf of another person’s (third-party) care or treatment.

There are numerous instances of nursing home residents being accepted “pending Medicaid approval” while the facility undertakes to file the Medicaid application, but then either fails to do so or fails to complete the requirements of the Department of Social Services resulting in the failure to gain approval of Medicaid and payment of the facility’s charges and then later the resident and anyone signing on her / his behalf as the patient’s representative or agent under a power of attorney wind up being sued for substantial charges, notwithstanding that third party guarantees of payment are prohibited by Federal and New York State Statutes under 42 U.S.C. §1396 r (c)(5)(a)(ii) and 10 N.Y.C.R.R. §415.3 (b)(i). The legal fees, costs and disbursements of the defending these types of actions can run into the tens of thousands of dollars and cases drag on for years in the courts while causing undue economic and emotional harm to the good Samaritan that signed on behalf of the patient or resident. 

The following defenses, where applicable, may be raised in the Answer of the Defendant to such an action seeking to recover for hospital or nursing home charges:

  1. For breach of contract claims, the Defendant can raise the defenses of:
    1. lack of consideration
    2. duress
    3. being void as against public policy
    4. illegality
    5. unconscionability
    6. standing
    7. breach of contract
    8. statute of frauds
    9. failure to state a cause of action
    10. other defenses to be considered

In claims of violation of the debtor – creditor law / fraudulent conveyance, the Defendant may raise the defenses summarized above as well as the purported conveyance by the patient to the co-defendant did not occur, and / or that same did not render patient / resident insolvent, there was no intent to defraud, there was fair consideration for the transfer and no unjust enrichment as well as the failure to state a cause of action by the Plaintiff.

In addition to raising the foregoing and other applicable defenses in an Answer to a complaint seeking to recover hospital or nursing home service, the Defendant may also where appropriate interpose certain counter claims for abusive, vexatious or frivolous litigation not warranted by the law and facts of the case, breach of contract by the Plaintiff, possible fraudulent overcharges, neglect of the patient or causing personal injuries to the patient while in the care of the Plaintiff and other matters.

This blog is by no means an exhaustive discussion of the claims and defenses of the parties to the foregoing types of actions or proceedings, but rather an introductory guideline and warning to anyone from signing any agreement before consulting with independent counsel and to understand the rights and obligations of all parties to the transaction.