Why an Experienced Elder Law Attorney Can Make a Difference…

On November 14, 2014, the Ohio Court of Appeals affirmed a lower court’s decision in a deceptively simple contract dispute.  The question was whether a son, who was his mother’s agent under a power of attorney, could be held personally liable for $8,700 incurred by his mother in nursing home costs.  The ruling in Andover Village Retirement Community v. Cole confirmed the son’s contractual liability.

When I first read about the case, I thought I would find another example of the often confusing use of “responsible party” labels for agents in a nursing home admission agreement, a topic I’ve written about at length before.  However, the Ohio case was a new spin on that troublesome topic.  According to the opinion, Andover Village actually presented two separate documents to the son at the time of his mother’s admission.  One document was an admission agreement that the son signed, pledging:

“When Resident’s Responsible Person signs this Agreement on behalf of Resident, Resident’s Responsible Person is responsible for payment to [Andover] to the extent Resident’s Responsible Person has access and control of Resident’s income and/or resources. By signing this Agreement the Resident’s Responsible Person does not incur personal financial liability.”

The second document, titled “Voluntary Assumption of Personal Responsibility,” was also signed by the son, but this time it stated, “I, Richard Cole, voluntarily assume personal financial responsibility for the care of Resident in the preceding Agreement.”

The court viewed the second document as the son’s personal guarantee, and it was this document that triggered the court to find the son personally liable for his “voluntary” assumption of the obligation to pay costs not covered by Medicare or Medicaid.

The Ohio court leaves me with another question, not directly addressed in the decision.  Did the son really make a knowing and voluntary decision to assume personal liability for costs, especially costs that can break most individual’s piggy banks?  Or, did the son sign a stack of papers he was told were routine and necessary for his mother to be admitted?  Admissions to nursing homes are often made when everyone, the resident and the family members, is under stress.

At a minimum, I would like to think that a family’s consultation with an experienced elder law attorney at the time of admission would have made a difference. 

For facilities that are Medicare or Medicaid eligible — and that is most nursing homes — key federal laws, set forth at 42 U.S.C. §§ 1395i-3(c)(5)(A)(ii), 1396r(c)(5)(A)(ii) provide: “With respect to admissions practices, a skilled nursing facility must . . . not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility.” 

I expect that an experienced elder law attorney would be familiar with this restriction on “mandatory” guarantees and would help the son see that for the nursing home to be compliant with federal law, any guarantee must be truly voluntary.  Advice from an experienced elder law attorney would help to guard against the not-so-voluntary signing of a stack of papers that are presented as “necessary” to admit the resident.  Perhaps a facility would refuse to admit the mother unless the son signs the “voluntary” agreement, but if that happens, it would be clear that the facility is violating the intention of federal law to protect individuals — and families — from waiving certain rights as a condition of admission or continued residence.

With that experienced lawyer’s advice, a son could make a knowing and intentional decision to serve as his mother’s contractual guarantor, and thus would be alert in advance to the ways that even small gaps can occur that are not covered by Medicare, Medicaid or private insurance. (Those small gaps can add up!)  Alternatively, if the son is not willing or able to serve as his parent’s guarantor, another facility might be the better choice. 

In law school classes about elder law, we do teach Medicaid planning approaches, but frankly, that is usually a small part of any course.  The majority of our time is spent on the abundant ways that individuals and families can be helped by an attorney who understands the full panoply of rights and obligations that attend growing older in the U.S. and beyond. 

Hat tips to Pennsylvania attorney Jeffrey Marshall and Florida attorney Joseph Karp for alerts to the Ohio case.