Show Me the Money!
Last week, I wrote about how many states allow “granny cams,” or cameras in long-term care facilities used to deter the abuse of residents. Facilities are feeling the pinch of a nationwide shortage of caregivers, so many are hiring employees that wouldn’t have made the cut prior to COVID.
Long-term care facilities also have a difficult time paying high quality employees when they aren’t getting paid themselves.
The Centers for Medicare & Medicaid Services (CMS) has long forbidden the use of third-party financial guarantees in nursing home admissions agreements. In other words, nursing homes could not obligate a resident’s family members or agent under a financial power of attorney to personally be on the hook for a nursing home bill if the resident doesn’t pay.
CMS is now looking to expand this prohibition. Under the new rules, which go into effect on March 24, any language that seeks to hold someone other than the resident personally responsible could be problematic. The admissions agreement does not need to contain the word “guarantee” to be problematic either. And facilities can’t skirt the issue by including the obligation in an addendum or other document signed when the resident is admitted.
“Language can be noncompliant even if it does not specifically reference a ‘guarantee’ by a third party,” the CMS wrote in its update. “Any language contained in an agreement that seeks to hold a third party personally responsible for paying the facility would violate this requirement.”
The guidance includes specific examples of noncompliance, including:
• Language that holds both the resident and the representative or other individual jointly responsible for any sums due to the facility;
• Language that holds the representative or other third-party personally liable for breach of any obligation in the agreement, such as failing to fully complete a Medicaid application on time;
• Language that implies the resident could be discharged if the representative does not voluntarily agree to personally pay to prevent the discharge; and
• Language that holds the representative personally liable for any amounts not paid to the facility in a timely manner because the representative or other individual did not provide accurate financial information or notify the facility of changes in the resident’s financial information.
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. However, the updated guidance explicitly prohibits the facility from making that request if an individual “does not actually have legal access to the resident’s funds.”
Nursing homes, obviously, oppose these new regulations. Because the cost of long-term care is so high, even if a resident misses only a month or two of payments, the facility can be out tens of thousands of dollars. Therefore, nursing homes are encouraged to enhance their initial resident screening processes to evaluate the ability of residents to pay and to help them apply for Medicaid upon becoming eligible. They should also implement billing practices and immediately begin collection practices when a patient falls behind.
Years ago, we had a client who had to go to a nursing home. Because he had incontinence issues, they gave him a phone number to dial if he ever had a problem. Whenever he called, however, the operator would ask if he could hold.
Reg P. Wydeven
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