Starting Strong: Optimizing the Admission Agreement for Long-Term Care

Harris Beach PLLC
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Our series dedicated to maximizing collections on long-term care accounts now turns to the importance of the admission agreement. The admission agreement presents an opportunity for long-term care facilities and nursing homes to define the obligations of the resident and/or resident’s financial representative (as appropriate), invoking challenging but important scenarios such as a Medicaid penalty period.

Once an applicant has been vetted using the guidelines we discussed earlier, the admission agreement should clearly outline each parties’ responsibilities and obligations. Ideally, the agreement should be signed by both the resident and the financial representative. Personal guaranties by third parties is not permitted in the context of long-term care agreements. While nursing homes have no claim to recover payment against a power of attorney who does not sign the admission agreement as a financial representative, they may seek to compel an accounting of the resident’s income and assets. An optimal agreement will ensure that the financial representative:

  • Confirms he or she has access to the resident’s income, assets and resources
  • Agrees to draw from the resident’s income, assets and resources to pay for the cost of care, and further agrees to not use the resident’s assets for any other purpose
  • Agrees to timely apply for Medicaid or recertification on behalf of the resident, keeping the nursing home apprised of status, and seeking assistance from the nursing home should difficulties arise
  • Agrees, if a transfer creates a Medicaid penalty period, to take any and all steps necessary to return such income or assets to the resident’s use for payment to the nursing home
  • Agrees that he or she is liable for paying the facility’s attorneys’ fees and costs in the event he or she breaches the agreement

On December 16, 2019, Governor Andrew Cuomo, appreciating the importance of admission agreements and in an effort to promote transparency, signed into law Section 2803-y of the Public Health Law. The new law provides that as of April 14, 2020 long-term care facilities must: 1) provide prospective residents or their authorized agents with a copy of its admission agreement; and 2) post their admission agreement and private pay rates on their websites. Very few facilities currently post a complete copy of their admission agreement on their website, so this new law is a shift in the long-term care industry. However, the hope is that the posting will promote better informed applicants and financial representatives, and allow for a more enriched admissions process.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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