Is Power of Attorney Responsible for Nursing Home Expenses?

If you have been granted power of attorney for an elderly family member residing in a nursing home, you might wonder if you can be held accountable for their nursing home expenses. The answer is no, but it’s possible for nursing homes to still pursue you for payment. In this article, we will delve into the legal aspects of power of attorney grants and the responsibility for nursing home bills.

Who Bears the Responsibility for Nursing Home Expenses?

Placing an elderly loved one in a nursing home can be emotionally taxing, and the cost of living in such a facility can be exorbitant. The average annual cost of a nursing home in the United States is $105,850, making it natural to question whether you may be held liable for these bills.

Federal regulations govern nursing home contracts, stating that only the “resident” of the nursing home can be directly liable for the bills. Furthermore, facilities are prohibited from requiring family members or other third parties to assume personal liability for nursing home expenses as a condition of admission.

Consequently, adult children of nursing home residents are typically not responsible for the costs. However, there are a few exceptions to this rule.

Liability as the “Responsible Party”

Some nursing home contracts may require children or family members to sign as the “responsible party” for the elderly resident. While the responsible party is not directly liable for the bills, they have certain fiduciary obligations. These obligations include making reasonable efforts to ensure that the elderly resident pays their bills.

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For instance, if the resident runs out of funds, the responsible party may be obligated to apply for Medicaid on their behalf. Failure to do so could result in the nursing home suing for breach of contract to recover unpaid bills.

A notable case illustrating this situation is Jewish Home Lifecare v. Ast (NY Sup. Ct. 2015). In this case, a son signed a nursing home contract as the responsible party for his mother. The nursing home sued him for unpaid bills, claiming that he fraudulently misused his mother’s money and neglected to apply for Medicaid on her behalf.

The court determined that the son could be held liable for breach of contract as the responsible party. However, such cases are relatively rare due to the expenses associated with pursuing civil lawsuits, and the responsible party may lack the financial means to pay.

A similar situation arose in another case, County of Warren on Behalf of Westmonunt Health Facility v. Jeffrey Garry, 188 N.Y.S.3d 914 (May 22, 2023), in which a son had initially signed a responsible party agreement for his father upon admission to a nursing home. However, when the father was readmitted after being hospitalized, the son refused to sign the agreement again. The case examined the son’s liability for all uncovered costs based on his agreement to the initial responsible party agreement.

Filial Responsibility Laws

Around half of the U.S. states have filial responsibility laws that mandate adult children to provide certain necessities, such as medical care, food, and housing, for their elderly parents. These obligations only come into effect when the elderly parent does not qualify for Medicaid.

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However, filial responsibility laws are rarely enforced. This is because most elderly parents who lack the means to pay for their care ultimately qualify for Medicaid.

Understanding this concept is crucial, as we don’t want loved ones refusing power of attorney due to concerns about being personally liable for medical expenses.

Average Nursing Home Costs

The Estate’s Responsibility for Nursing Home Expenses

While power of attorney does not make the attorney-in-fact liable for nursing home bills, the estate of the deceased is responsible for these expenses, treating the nursing home as any other creditor.

What Is a Power of Attorney?

A power of attorney (POA) refers to a legal document in which one person grants another person or persons the authority to act on their behalf. The authorized individual(s) is known as the “attorney-in-fact” and assumes a fiduciary obligation to act in the best interests of the principal. There are various types of POAs, ranging from limited authorization to more comprehensive authority.

If you possess power of attorney for an elderly parent or friend, most likely, it is a general power of attorney granting you the authority to act on their behalf in legal and financial matters, such as signing contracts or opening bank accounts.

Power of Attorney and Nursing Home Expenses

It is crucial to understand that power of attorney does not make the attorney-in-fact personally liable for the principal’s debts and obligations. This holds true even for contracts signed by the attorney-in-fact on behalf of the principal. Therefore, if you sign a contract with a nursing home as the attorney-in-fact for your mother, your mother bears the legal obligation under that contract, not you.

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As the attorney-in-fact for an elderly resident, a nursing home may request that you settle bills using the resident’s funds that you have control over. In your role as power of attorney, you are likely obligated to pay those bills from the resident’s funds. However, the nursing home cannot demand or force you to assume personal responsibility for the bills and pay them from your own pocket.

Specific federal regulations prohibit nursing homes from holding third parties personally liable for bills. If you have power of attorney for an elderly resident, the nursing home’s only recourse is to request that you use the resident’s funds to settle the bills:

“The facility must not request or require a third-party guarantee of payment to the facility as a condition of admission or expedited admission, or continued stay in the facility. However, the facility may request and require a resident representative who has legal access to a resident’s income or resources available to pay for facility care to sign a contract, without incurring personal financial liability, to provide facility payment from the resident’s income or resources.” (42 CFR ยง 483(a)(3))

Contact Our Nursing Home Abuse Lawyers

Nursing home abuse and neglect extend beyond aggressive billing practices. If your loved one has suffered harm due to negligent or abusive care at a nursing home, reach out to our nursing home abuse lawyers at Garrity Traina. You can contact us at 800-553-8082 or schedule a free online consultation for assistance.

Remember, having power of attorney for an elderly nursing home resident does not make you personally responsible for their financial obligations, including nursing home expenses.