Articles

REVIEWING CONTRACTS FOR LONG TERM CARE

Montgomery County Bar Association Elder and Disability Law Committee
February 14, 2000

Lois A. Nafziger, Esquire
High Swartz LLP
Norristown, PA

I. INTRODUCTION.

Entering a nursing home signals loss of independence and declining health. When the need for nursing care happens suddenly, an individual and the family members find themselves in unfamiliar territory. Federal laws and state statutes have been enacted to protect individuals but, due to the time pressures and emergency decision making that is often required, many times the elderly client is unable to take advantage of the laws that are there for his or her protection.

II. GENERAL GUIDELINES FOR REVIEWING AGREEMENTS FOR LONG TERM CARE.

1. 42 C.F.R. §483 gives requirements for long term care facilities that participate in the Medicare and Medicaid programs. It is worth reviewing this section as a background for reviewing agreements generally.
   
   
2. A care facility must fully disclose what types of services and the level of care it agrees to provide in exchange for the daily, weekly, or monthly fee to be paid by the resident.
   
   
3. The contract should clearly delineate the circumstances under which the resident's contract may be terminated. The contract should also specify whether the facility accepts governmental benefits if the resident is eligible.
   
   
4. Under what circumstances can the monthly fee be increased?
   
   
5. Does the contract address the issue of gifts from the resident's funds, before or after admission to the facility?
   
   
6. What is the facility's policy on holding a resident's bed while he or she is temporarily hospitalized? Medicaid will hold the nursing home bed if a Medicaid resident needs to go to a hospital for a period of time. A nursing home will usually hold the bed of a private pay resident as long as the bed is being paid for.
   
   
7. Nursing facilities may not discriminate against residents who are receiving benefits from Medicare or Medicaid. Facilities must establish and maintain identical policies and practices regarding transfer, discharge and covered services for all individuals regardless of source of payment. 42 U.S.C.S.§1395(i-3)(c)(4), 139r(c)(4); 42 C.F.R. §483.12(c)(1).
   
   
8. Third Party Guarantors 42 C.F.R. §483.12(d)(2). HCFA ("Health Care Financing Administration") Transmittal 274 and Podolsky v. First Healthcare Corp., 50 Cal. App. 4th 632; 58 Cal. Rept. 2d 89 (1996).
   
   
9. Reduction or Elimination of Care 42 U.S.C. §1395 1-3(b)(2); 42 C.F.R. §483.12(c)(4)

III. REVIEWING CONTRACTS FOR CCRCs.

Continuing care communities have become an important and necessary alternative for long term residential, social and health maintenance needs for elderly citizens. In 1984 Pennsylvania passed the Continuing Care Provider Registration and Disclosure Act 40 Pa. C.S. §3201 et seq. The Act requires Certificates of Authority, provides regulations for Disclosure Statements, advertising, financial reserves, escrows and regulates residence agreements. These communities are regulated by the Insurance Commissioner.

1. Resident Agreement:
   1. Each agreement must be written in non technical language and easily understood by a lay person. 40 Pa.C.S. §3214.
   2. Among other things the resident's agreement shall:
      1. Show the value of all subscriptions, fees or any other amounts paid or payable on behalf of the resident or residents.
      2. Specify all services which are to be provided to each resident and whether the items will be provided for a designated time period or life.
      3. Describe the health and financial conditions upon which the provider may have the resident relinquish his space.
      4. Describe the health and financial conditions required for a person to continue as a resident.
      5. Describe the circumstances under which the resident may be permitted to remain the facility in the event of financial difficulties.
      6. State the fees that will be charged if the resident marries and the terms concerning the entry of a spouse to the facility and the consequences if the spouse does not meet the requirements for entry.
      7. Provide that the agreement may be cancelled upon giving notice of cancellation of at least thirty days by the provider or the resident.
      8. Providing clear and understandable language the terms governing the refund of any portion of the entrance fee.
2. Contracts for Personal Care and Assisted Living. Personal Care Homes and Assisted Living Facilities provide residential settings for aged, blind and disabled and other dependent adults who require assistance beyond the basic necessities of food and shelter, but who do not need hospitalization or skilled or intermediate nursing care. Pennsylvania Licensing Guidelines are in place to assure that the care provided is safe, humane, comfortable and supportive. Personal care homes are required to comply with Title 55 Pa. Code, Chapter 2620 - Personal Care Home Licensing Regulation; Title 55 Pa. Code, Chapter 20, Licensure for Approval of Facilities and Agencies by the Department of Public Welfare and §1001 - 1087 of the Public Welfare Code. These guidelines are applicable to those personal care homes operated for profit or not for profit, whether freestanding or on the grounds of a long-term care nursing facility. Federal Statutory underpinning for quality of care for SSI recipients is limited in scope and can be found in the Keys amendment, 42 USC §1382e(e). At present, Pennsylvania does not extend medical assistance coverage for care in personal care or assisted living facilities. The trend nationwide, however, is in the direction of home and community based waivers under Section 1915(c) of the Social Security Act, 42 USC § 1396n(c).
   1. Resident Agreement. Prior to or within 24 hours after admission, the standard written admissions agreement between the resident and the facility shall be in place. The administrator is responsible for completing this written agreement with the resident and to review and explain its contents to the resident and the designated person. The minimum requirements for the written agreement are enumerated at 55 Pa. Code §2620.24(a) - (e). Some of these requirements are as follows:
      1. The actual amount of the periodic charge for food, shelter, services and additional charges and how, when and by whom payment is to be made.
      2. A list of personal care services to be provided to the resident.
      3. Charges to the resident for holding a bed during hospitalization or other extended absence from the home.
      4. The conditions under which refunds will be made including the refund of admission fees and refunds upon the resident's death.
      5. Financial arrangements if assistance with financial management is to be provided.
      6. The conditions under which the agreement may be terminated, including home closure.
      7. The written agreement shall specify that each resident shall retain a minimum of thirty dollars ($30) per month of the resident's own funds for personal expenditures and any agreement to the contrary is not valid.
      8. A copy of the signed admissions agreement shall be given to the resident and copy shall be filed in the resident's record.
   2. Issues in Counseling Clients in Personal Care Homes.
      1. If a client exhausts personal funds paying for assisted living or personal care and health declines as private funds run out, the client may be in the position of shopping for nursing care as "Medicaid eligible."
      2. There are crises that surround moving a person who is ill and requires a higher level of care. The assistance provided to residents in transition to another facility is limited at best. Review the terms of the contract carefully for these provisions. Also review applicable 55 Pa. Code Sections.
      3. Many facilities now have special dementia units which provide specialized care for the resident with Alzheimer's disease or other dementias. In fact, the trend is for facilities to provide care to persons who need greater physical or medical care than formerly was provided at this level of care.
      4. Involuntary or undesired transfers or discharge can be disputed by requiring the facility to justify its reasons for transfer or discharge. In addition, the family may choose to resort to litigation based on tenants' rights principals.