There are a number of pitfalls and traps embedded in the contracts that Skilled Nursing Facilities and Assisted Living Facilities give to residents or their representatives to sign. These facilities rightfully want to protect the resident and the facility from financial exploitation, which is epidemic. The contract is often one-sided, however, demanding that the resident give up their rights under law and surrender all assets to the facility. The drafters of these contracts may use the Nursing Home Care Act to try to abbreviate the statutory rights, such as limiting the defenses for an Involuntary Discharge, so it is important for the representative/ POA for Property and Health care to obtain legal counsel to cross out these provisions and provide an addendum that states why the provisions do not follow the law and cannot be agreed to. This is intensive work on the part of the attorney, who must use federal and state administrative code and public policy to advocate for the resident, so that their rights are not waived in the application process and that their assets are not stripped by assignment to the facility. The representative is often ordered to sign a Guarantor provision taking on personal liability for debt not paid to the facility, as it determines. This is contrary to state law and needs to be removed. The language often goes to great lengths to state that the representative is not personally liable, so long as that representative pays out all of the resident’s assets to the facility for any bills the facility decides it is owed. This has to be stricken because the facility may very well decide it wants to be paid in full during the time the Medicaid application is pending, running counter to the rights under the law. The facility may also make mistakes in it billing or commit deliberate fraud. The Security Deposit is another land mine in the contract that needs to be handled properly.
Assisted Living Facilities typically do not take Medicaid, unless they are Supportive Living Facilities. Whenever Medicaid payment is not accepted, the elder’s rights are diminished under law and the law governing Assisted Living Facilities is much weaker than the Skilled Nursing Facilities. After reviewing a contract and removing illegal provisions, an Assisted Living facility will often tell the applicant to “take it or leave it, as is.” Nevertheless, the resident and their representative will be signing the contract with eyes wide open, knowing the unfair provisions in the contract, but it is a cold comfort. With the Supportive Living Facilities, the Medicaid rules under the Administrative Code do protect the resident and representative, if they are asserted in the contract review and not waived by signing the contract, as is.
The object of obtaining the contract review is to protect the resident and their representative from illegal provisions in the contract, but also to keep the matter out of court. Unless these provisions are excised, there is the possibility of a contract breach accusation being leveled against the resident.