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Caring For Generations

Can Responsible Party be Held Rosponsible for the Bill?

On Behalf of | Jun 21, 2016 | Uncategorized

If a son or daughter signs a nursing home admission form for a parent as “Responsible Party”, does that mean the adult child is responsible for paying the bill if the patient runs out of money? An interesting 2014 ruling in the Indiana Court of Appeals provides a partial answer to that question.

When a certain woman was being admitted to a Trilogy Health Services nursing home back in 2012, her daughter signed the papers as a “Responsible Party”. After Mom died later that year, it was discovered her estate lacked sufficient funds to pay her bills for bed hold charges and respiratory equipment she had used. Trilogy sued the daughter for repayment.  While the trial court initially ruled that the daughter was responsible to pay the nursing home from her own funds, the Court of Appeals overturned that judgment, noting that:

  • Both federal law and state regulation prohibit a nursing facility from requiring someone other than the resident to be guarantor of payment.
  • A nursing facility can require that a person with legal access to a resident’s income or assets (as power of attorney or trustee) sign a contract to provide payment from the resident’s funds.
  • The Appellate Court noted that a relative who volunteers to be a guarantor, can later be held liable.

As elder law attorneys, we always caution adult children about signing on behalf of a parent who is being admitted to a nursing home. Exactly how you sign can make a tremendous difference in liability later on.

You may mean to be signing for Mom or Dad (meaning as his or her agent under a power of attorney), but it’s crucial to avoid signing as “guarantor” of payment (meaning pledging to use one’s own assets for repayment should the parent run out of funds).

The typical nursing home admission agreement contains different signature blocks:

  1. Legal representative – this is a third party, such as an attorney-in-fact under a valid power of attorney, the resident’s conservator or guardian, or a representative payee.
  2. Responsible party – a third party who has access to and agrees to use the resident’s income and assets to pay for the resident’s care.
  3. Guarantor – a third party who agrees to be personally liable for the resident’s liabilities.

“Reviewing and understanding a nursing home admission agreement before it’s signed can prevent unpleasant surprises down the road if the resident runs out of money to pay the nursing home bill,” says Susan T. Peterson of Bench & Bar of Minnesota. 

At Geyer & Associates, we assist families with the review of admission agreements to ensure costly mistakes are not made.

– by  Rebecca W. Geyer