Consumer Rights and Nursing Home Contracts Clarified

Consumer Rights

WHAT YOU SHOULD KNOW ABOUT NURSING HOME ADMISSION CONTRACTS

Informational Column by Attorney General Eliot Spitzer

When the responsibilities of maintaining a home become too great a burden for an elderly individual or couple, their family members will inevitably ask: "Is it time to consider a nursing facility?"

This is one of life’s most difficult questions. That’s because no one wants to leave their home. If, however, a decision is made to proceed, families then face a daunting process of finding the right facility and completing a confusing application process.

To help simplify and clarify this process, my office recently reached an agreement with nine prominent nursing homes across the state. The agreement addresses two specific sources of confusion and dismay for seniors and their families.

First, the agreement eliminates so‑called "third-party guarantees" that impose financial obligations on families as a condition of admission. Second, the agreement protects against improper involuntary discharges of residents.

Cynthia Rudder, Director of the Nursing Home Community Coalition of New York State, described the need for such action as follows: "Admission is a very stressful time for families and they often feel they have to sign anything the home gives them, even if they feel the agreement illegally forces them to accept financial responsibility or seems to allow the home to discharge the resident for reasons not allowed under state or federal law."

My office, working with the New York State Office for the Aging Ombudsman Program, surveyed nursing home admission contracts and found that many contained inaccurate, misleading and, in some cases, illegal language requiring third‑party guarantees. The contracts also stipulated arbitrary grounds for discharging residents.

State and federal laws, however, prohibit homes from requiring third-party guarantees as a condition of admission. Specifically, a nursing home cannot require friends or relatives to sign an admission agreement that makes them liable for payment for a prospective resident’s care as a pre-condition for admission to the home.

State and federal laws also limit the ability of nursing homes to discharge residents involuntarily. The homes can only discharge residents for narrowly‑defined reasons, including behavior that is deemed dangerous to other residents.

My office determined that certain admission contracts give nursing homes overly broad discretion in both areas. We did not, however, find clear evidence that the homes had improperly collected funds from third parties, or had improperly discharged any residents. We continue to review the matter, however.

Under the terms of the agreement, the nine nursing homes will revise their admission contracts to include language that complies with state and federal law, notify all residents of the changes, and have residents sign new contracts.

This agreement – which should be a model for the rest of the nursing home industry in New York – will help seniors and their families with the difficult process of arranging appropriate nursing home care.

If consumers have additional questions or concerns about nursing home care or other health care matters, they can call the Attorney General’s Health Care Bureau at 1-800-771-7755.