Additional Discussion of Use of Guardianships as Nursing Home Collection Tool
On Monday, we linked to the front-page New York Times article by Nina Bernstein, “To Collect Debts, Nursing Homes Are Seizing Control Over Patients.” Suffice it to say, I’ve been hearing a lot about the topic, from many sources. In hearing from law professors and lawyers with different perspectives, it appears there are at least three important questions framed by the article. Each may take additional investigation to fully address, whether in New York or other states where similar concerns have been raised.
In one of the cases described by the NYT, a court opinion addresses what appears to be the nursing home’s narrow “collection” purpose in seeking a guardianship. The article summarizes:
“Last year Justice [Alexander W.] Hunter did appoint a guardian in response to a petition by Hebrew Home for the Aged at Riverdale, but in his scathing 11-page decision, he directed the guardian to investigate and to consider referring the case for criminal prosecution of financial exploitation.
The decision describes a 94-year-old resident with a bank balance of $240,000 who had been unable to go home after rehabilitative treatment because of a fire in her co-op apartment; her only regular visitors were real estate agents who wanted her to sell. After Hebrew Home’s own doctor evaluated her as incapable of making financial decisions, the decision says, the nursing home collected a $50,000 check from her; it sued her when she refused to continue writing checks, then filed for guardianship. ‘It would be an understatement to declare that this court is outraged by the behavior exhibited by the interested parties — parties who were supposed to protect the person, but who have all unabashedly demonstrated through their actions in connection with the person that they are only interested in getting paid,’ he wrote.
Jennifer Cona, a lawyer for the nursing home, called the decision ‘grossly unfair to Hebrew Home,’ but said she could not discuss details because the record was sealed.”
Here is a link to the full opinion in the case, publically available on Justia.com.
Two additional cases raise similar issues and are referenced in the New York Times. Both have opinions by Judge Hunter:
Matter of G. S., 17 Misc.3d 303; 841 N.Y.S. 2d 428 (Sup. Ct., New York County 2007), and
Matter of S.K., 13 Misc.3d 1045; 827 N.Y.S.2d 554 (Sup. Ct. Bronx Cty., 2006).
In both cases, Judge Hunter concluded the purpose for which the guardianship petitions were filed by the nursing home as petitioner was “not the legislature’s intended purpose when Article 81 of the Mental Health Law was enacted in 1993.” In each case, the judge assessed fees against the petitioner nursing home. In the 2007 case of G.S., the court observed, “To the extent that the nursing home is seeking to be paid for the care it has rendered to the person, the petitioner must seek a different avenue of redress for that relief as a guardianship application is inappropriate.”
Thus, these three cases, plus other cases alluded to in the New York Times article, frame the first important question for New York: Where an individual is incapacitated and the bills are not being paid, is there an appropriate forum or mechanism — or at least something more appropriate than guardianship proceedings — for the facility to seek to be paid, whether from private resources or public benefits? It is probably the rare nursing home, particularly in the leaner times since 2008, that will have adequate charitable reserves to underwrite such care.
It would appear that a second concern, beyond the question of proper forum for addressing a payment dispute, is the potential for a facility’s recommended guardian to be aligned with the interests of the nursing home, rather than the resident. For example, the individual could fail to investigate concerns about negligence or quality of care. The issue is the potential for conflict of interest. For comparison, in the case of Montanez v. Crockett, Franklin & Chasen P.A., 687 So.2d 943 (Fla. Ct. App. 1997), a court cited conflict of interest in setting aside a settlement of a personal injury claim between a nursing home and guardian, where the guardian was also serving as personal representative of the deceased resident’s estate.
A third concern is about the additional costs that may be attached to collection efforts through judicial proceedings, especially guardianships that may require expert witnesses on capacity and need for skilled care, with both the nursing home and the guardian seeking fees to be paid from the resident’s estate or resources. If a nursing home regularly works with a “friendly” individual or firm appointed as guardian, a “scratch my back and I’ll scratch yours” dynamic on fees could develop. In Arizona, for example, high-profile guardianship cases reported in the Arizona Republic between 2008 and 2011 triggered questions about unnecessary or excessive fees in court-supervised guardian and probate court proceedings, eventually leading to significant changes in the court system of oversight.