A soon-to-expand prohibition on nursing homes’ use of third-party financial guarantees could lead to more operators using lawsuits to collect as residents’ unpaid debt becomes a bigger financial concern.
That warning comes as regulators move to target admission and billing policies that mimic financial guarantees — even if they don’t technically require third-parties to “guarantee” they’ll pay for a friend, family member or other associate’s stay.
Facilities can continue to “request and require a resident representative who has legal access to a resident’s income” to sign a contract saying they will use that resource to pay for care, without incurring personal financial liability.
But the updated guidance also explicitly prohibits the facility from making that request if an individual “does not actually have legal access to the resident’s funds.”
“The distinction makes sense because it’s not fair to expect someone to cosign. How much are they potentially liable for? We’re talking about nursing home expenses,” Eric Carlson, director of long-term services and supports advocacy at Justice in Aging, said during a Wednesday webinar on the new guidance.
“If you cosign for a car, you know what you’re responsible for: whatever the price of the car is. But if you cosign on a nursing facility admission agreement, what’s the bill going to be? $10,000, $50,000? You see bills of this size, and a third party shouldn’t be stuck with financial obligations like that,” he added.
