Do you have to sign as the responsible party at a nursing home?
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Key takeaways
- A Medicare- or Medicaid-certified nursing home must not ask for or require a third party, such as a family member, to guarantee payment as a condition of admission, faster admission or continued stay.
- A home may ask someone who has legal access to the resident's income or savings to sign a contract to pay the home from the resident's money, without that person becoming personally liable.
- CMS says contract wording can break the rule even if it never uses the word "guarantee", and lists examples such as making a family member jointly responsible for the bill.
- The rule applies to every resident of a certified home, whatever pays for the stay.
No. A nursing home certified for Medicare or Medicaid must not ask for or require a third party, such as an adult child, to guarantee payment as a condition of admission, faster admission or continued stay. If you have legal access to the resident's income or savings, the home may ask you to sign an agreement to pay the home from the resident's money, but without you becoming personally liable.
Before you sign: a quick check
- Look for wording that makes you pay from your own money. CMS says this violates the rule even if the contract never uses the word "guarantee".
- Look in every document signed at admission, not only the main agreement. CMS says the rule covers all of them, and later agreements about staying too.
- You can refuse to sign wording that makes you personally liable. The Consumer Financial Protection Bureau tells caregivers they can refuse to sign an admissions contract that tries to hold them personally responsible for the resident's bills, and a certified home cannot make your guarantee a condition of admission.
- You do not have to sign an arbitration agreement to be admitted. See nursing home arbitration agreements.
What does federal law say?
The rule is in the Medicare law for skilled nursing facilities and the Medicaid law for nursing facilities (42 U.S.C. §§ 1395i-3(c)(5) and 1396r(c)(5)), and in the federal regulation at 42 CFR § 483.15(a). Under the regulation, the home:
- may not request or require a third-party guarantee of payment as a condition of admission, expedited admission or continued stay (§ 483.15(a)(3));
- may not ask residents to waive their rights to Medicare or Medicaid, or ask for a promise that they are not eligible for or will not apply for them (§ 483.15(a)(2));
- for a person eligible for Medicaid, may not charge, ask for or accept any gift, money or donation beyond what the state plan requires as a condition of admission or continued stay (§ 483.15(a)(4); this one is in the Medicaid law only).
What the home may do: ask a resident representative who has legal access to the resident's income or resources to sign a contract, without incurring personal financial liability, to pay the home from the resident's income or resources.
Which contract wording does CMS treat as a violation?
CMS's guidance to state inspectors (State Operations Manual, Appendix PP, tag F620) says a home must not require a third party to accept personal responsibility for paying the bill from their own funds, and that the home may not ask or require a person who does not have legal access to the resident's funds to pay the home. It gives these examples of noncompliant language:
- making the resident and the representative or another person jointly responsible for amounts owed (language making the resident alone responsible is allowed);
- making the representative personally liable for failing to apply for Medicaid on time and completely;
- implying the resident could be discharged unless the representative agrees to pay personally;
- making the representative personally liable for unpaid amounts because they did not give accurate financial information or did not report changes.
CMS also says the ban applies to every resident of a certified home, whatever pays for the stay, and that a third-party guarantee is different from a third-party payer such as an insurance company. The home may still ask about Medicare, Medicaid and private insurance.
For Medicaid-eligible residents, CMS adds that the home may not require extra payment as a condition of admission or continued stay, including deposits or a promise to pay private rates for a period of time. CMS also says a home may charge a deposit to someone whose stay is not covered by Medicaid, and may charge for services, including a deposit before admission, while Medicaid eligibility is pending.
Who is a "resident representative"?
Federal rules define a resident representative to include a person the resident chooses, a person authorized by law such as an agent under a power of attorney or a representative payee, and a court-appointed guardian or conservator.
What if you already signed?
The federal rule says what a certified home may require; it does not by itself settle what a court would do with a contract already signed. In September 2022 the then heads of CMS and the Consumer Financial Protection Bureau sent nursing facilities and debt collectors a joint letter restating that facilities may not request or require any third party, including a family member or caregiver, to personally guarantee payment. The long-term care ombudsman program handles complaints made by or on behalf of residents, and you can report the home to the state agency that inspects nursing homes. Whether you owe anything under state law is a question for a lawyer in your state.
State inspectors are told to ask residents or their representatives whether a third-party guarantee of payment was a condition of admission. See how to file a complaint and residents' rights.