This FAQ was produced in partnership with the National Consumer Law Center.
Can a nursing home force me to pay the bill for a family member or friend?
Usually not, although there are some exceptions. Many nursing homes try illegal strategies to frighten family members or friends into paying the bill. Don’t be intimidated. Read the question-and-answer discussion below, and consult with a local attorney.
Can a nursing home make me liable through the resident’s admission agreement?
Again, usually not. Federal law prohibits a nursing home from asking or requiring a third party to be a financial guarantor — in other words, a financially liable co-signer. If a resident is not mentally competent to sign an agreement, the nursing home can require the resident’s representative to sign the agreement on the resident’s behalf, but only to make the resident financially responsible. Find the relevant federal law at section 483.15(a)(3) of Title 42 of the Code of Federal Regulations.
Does it matter if the admission agreement says that the family member or friend has “volunteered” to become financially responsible?
No, using the word “volunteer” does not allow the nursing home to avoid federal law. Federal law prohibits a nursing home from requiring or requesting a financial guarantee.
Many nursing homes try illegal strategies to frighten family members or friends into paying the bill. Don’t be intimidated.
How do nursing homes try to get around the law?
Beware of terms like “responsible party” in nursing home admission agreements. The agreement might try to define a “responsible party” as someone who is financially responsible, instead of just someone who wants to be available to help the resident and (as necessary) make decisions for the resident.
Some of these agreements state that the person signing on behalf of the resident agrees to handle the resident’s money in a certain way, such as paying the nursing home bill first before any of the resident’s other bills are paid or to take certain actions regarding potential Medicaid applications. These types of agreements can be dangerous for representatives to sign because, if the resident owes money, nursing homes sometimes sue representatives personally for failing to comply with specific obligations in the agreement.
Can a nursing home win a lawsuit against me for breach of contract if I signed a responsible party clause?
As explained above, federal law prohibits a nursing home from holding a responsible party personally liable for a resident’s bill. Also, general legal principles say that a representative is not liable for the debts of the person being represented.
That being said, courts sometimes rule in nursing homes’ favor on types of claims based on (for example) the representative’s failure to use the resident’s money to pay the bill or apply for Medicaid, as promised in the agreement. Often this type of ruling for a nursing home happens in egregious situations where the representative used the resident’s money for the representative’s benefit, rather than paying the nursing home. Sometimes, however, courts order representatives to pay the nursing home personally for the resident’s bill even if they have done nothing wrong. It is key to have an attorney advise you of your rights if you are sued for someone else’s nursing home bills.
Federal law prohibits a nursing home from asking or requiring a third party to be a financial guarantor — in other words, a financially liable co-signer.
How can I avoid making myself financially liable through an admission agreement?
First, if a resident is capable of signing an admission agreement, the resident should sign. A representative is needed only if the resident is unable to sign.
If a representative is needed, remember that a nursing home can obtain the signature of a family member or friend only as the resident’s representative and only to make the resident financially responsible. So read an admission agreement carefully, and make sure that, if you sign, you are signing only as a representative and are not agreeing to make yourself financially liable.
You should also beware of the type of language that requires you as the resident’s representative to pursue Medicaid on the resident’s behalf or to handle the resident’s affairs in a certain way. The agreement can require the resident’s money to be paid for legitimate nursing home bills, but it shouldn’t require the resident’s representative to take any specific actions. Remember, the agreement is with the resident, not the representative, and the representative is just signing on the resident’s behalf.
If a resident has already moved into the nursing home, you are in a particularly strong position to edit the agreement to address the problems discussed above. Once a resident has already been admitted to the nursing home, the resident cannot be evicted for not signing an admission agreement or not having a representative sign an admission agreement.
If the resident has not yet moved into the nursing home, the nursing home may say that you can’t edit the agreement if you want to get the resident a room in the nursing home, but you should still try to make edits or delete any clauses you don’t agree with. You will most likely be dealing with a nursing home employee who wants to just process the admission and move on with his or her day, so you may be able to cross out parts of the agreement and still get the resident a place in the nursing home. You may also be able to sign the agreement solely as power of attorney or guardian on behalf of the resident, and make it clear that you are not personally responsible.
If you do not have any legal right to access the resident’s money or make financial decisions on the resident’s behalf (for example, because there is no power of attorney or guardianship), you should tell the nursing home that and not sign the agreement.
25 Common Nursing Home Problems, and How to Resolve Them (Justice in Aging 2023)
Know Your Rights: Caregivers and Nursing Home Debt (Consumer Financial Protection Bureau 2022)