Signing an Admissions Agreement on Behalf of Another (Part 4)
In last week’s post I distinguished the terms “personal guarantor” and “responsible party” which are found in most long term care facility contracts. This week I’ll explain why they are so important, in light of the increasing difficulty in obtaining Medicaid benefits under the government programs that cover long term care when an applicant has no funds to pay for it. As I have written about previously in this blog, the State has placed more scrutiny on each application and the 5 years of records for all of an applicant’s assets that is required. This has resulted in a greater chance that an application will be denied for failure to produce requested documents or approved but with a Medicaid penalty or waiting period for benefits. As a result, gaps in Medicaid coverage become a problem for nursing homes and assisted living facilities when a resident has run out of funds. If a family member signs a personal guarantee, that means that if the resident has no more funds but Medicaid still won’t cover the cost, then the personal guarantor is obligated to pay out of his or her own funds. As I wrote last week, New Jersey prohibits a nursing home from making personal guarantees a
Signing an Admissions Agreement on Behalf of Another (Part 3)
In my blog post last week, I was discussing the terms “responsible party” and “personal guarantor” which are found in most nursing home and assisted living facility admissions agreements. They do not mean the same thing and we must always look to the definitions set out in the specific agreement being analyzed. In general, however, a responsible party is responsible to make payments to the facility out of the resident’s funds and may include other obligations as may be detailed in the agreement. To be a personal guarantor is to agree to make payments out of the guarantor’s own personal assets if the resident does not have sufficient funds. New Jersey law prohibits nursing homes from requiring that a family member or friend personally guarantee payment. That law, however, does not apply to assisted living facilities. If a family member or friend agrees to be a responsible party, one might ask why there is even the need for a personal guarantor, especially if, as is typical in the case of most assisted living facilities, a prospective resident must show proof of funds to cover 2 to 3 years of the cost of care. Additionally, almost all nursing homes and assisted living facilities now require from applicants
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
Signing an Admissions Agreement on Behalf of Another (Part 1)
As I have written about often recently, the State has raised the bar significantly in terms of what an applicant needs to produce and explain in order to qualify for Medicaid. The level of increased scrutiny leads to many more failed applications and reapplications than even a few years ago. If you aren't prepared for the intensity of the process, it can lead to lost benefits. In many of those cases, especially when the applicant is single, there aren't any assets to pay the facility if Medicaid won't cover the time period you expected it would. I tell clients that there is a real risk for long term care facilities with respect to taking in residents where Medicaid is anticipated at some point. I have seen scenarios over the years in which 5 and 6 figure long term care bills are unpaid because there is no source of private payment and Medicaid could not be approved. Which is why paying close attention to what is in the facility admissions agreement before you sign it is so important. Since more often than not this agreement will be signed by someone other than the resident him/herself - usually by
Nursing Home or Assisted Living (Part 2)
In my blog post last week I began to highlight the differences between nursing homes and assisted living facilities. Understanding the differences is especially important when one has limited assets and Medicaid benefits will be needed to pay for care at some point. The private pay rate for care for both types of facilities is much higher than what they are permitted to bill for their Medicaid residents. For that reason, many facilities have private pay minimums. In the case of assisted living facilities, it is pretty standard. With limited exceptions, the private pay requirement is 2 years. This means one must pay the facility at the private pay rate for 2 years before it will make a Medicaid slot available. Most ALFs make 10% of their beds available for Medicaid so getting approved by the State must be coupled with an available slot. One without the other won’t get you Medicaid benefits. Nursing home private pay rates are more varied. Some have no minimum while others have anywhere from a few months to a year or more. People tend to focus on the lower rate for ALFs vs. nursing homes, however, if one factors the longer 2 year private pay time
Nursing Home or Assisted Living (Part 1)
I’ve written a number of blog posts over the years about the failure to recognize the the differences between nursing homes and assisted living facilities. A number of recent cases in our office highlight the point and the mistakes that can be made, specifically with regard to the impact on Medicaid. When a client has a limited amount of money and Medicaid is going to be needed, families need to understand how choosing a nursing home vs. an assisted living facility for their loved one could impact the ability. First of all, many people don’t understand that while many assisted living facilities do have memory care units that focus on caring for advanced dementia and other residents who need nursing home level care, they are licensed as assisting living facilities and not nursing homes. That means that while choosing such a facility may be the solution, it is also possible that care needs may exceed what the assisted living facility can provide. Nursing home care might then be necessary. In other words, there is a “higher” level of care option. With limited funds available the private pay requirements of the facility before Medicaid eligibility are important to understand as well. We’ll discuss