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Signing an Admissions Agreement on Behalf of Another (Part 2)

Signing an Admissions Agreement on Behalf of Another (Part 2)

In my blog post last week, I talked about the importance of knowing what is in a long term care facility admissions agreement before you sign it. Because the resident being admitted is usually unable to handle his or her affairs, it is more often the case that someone else is signing on behalf of that person. The admissions agreement, however, is a contract. It contains various rights and responsibilities of the parties to that contract. If you sign it, even on behalf of another, you need to know what it obligates you to do.

Most admissions agreements use the terms “resident”, “responsible party” and “guarantor”. We all understand who the resident is – the person who will be residing in the facility and who will pay a fee for the services provided by the facility. Responsible party and guarantor, however, are terms that are not so clearly defined.

As the term suggests, the responsible party is responsible – but for what exactly? Most admissions agreements will state that the responsible party agrees to pay the resident’s bill. Usually, the person signing as responsible party is a family member and/or an agent under power of attorney who has access to the resident’s financial accounts. He or she is responsible to make sure payment is made from those accounts.

But what if the resident doesn’t have sufficient funds to pay for care? Is the responsible party obligated to pay for the resident’s care using the responsible party’s own personal assets? That sounds more like a personal guarantor – one who guarantees the facility bill will be paid no matter what. And what about if the resident needs to apply for Medicaid to help cover the cost of care. With the Medicaid application process becoming increasingly complicated, and a greater risk that there will be periods of time for which Medicaid won’t cover the cost of care, is the responsible party responsible to cover that as well or is this the obligation of the personal guarantor? The answers depend in part on the language of the agreement and in part on certain laws on the books that may limit what terms can and can’t be placed in the agreement. We’’ll attempt to answer those questions next week.