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⭒ CANHR Advocate Did You Know Articles

Third Party Guarantees

Is it illegal for a facility to require a third party guarantee of payment ?

Admission to a nursing facility can be a very stressful time for both the resident and the family. There are so many things to understand and address at the initial time of placement, that the process can be overwhelming.

Here are some tips to keep in mind before signing the admission agreement.

  • The Code of Federal Regulations (42 CFR § 483.12) prohibit a nursing home from requiring a third party to guarantee payment as a condition of a resident’s admission, expedited admission, or continued stay in the facility.
  • The facility may require an individual who has legal access to a resident’s available income or resources to sign a contract, without incurring personal financial liability, to provide facility payment from the resident’s income or resources.
  • Family and friends who sign as a “Responsible Party” or “Agent” under a Power of Attorney are not personally financially liable for debts incurred, but are responsible for administering the resident’s funds to the facility.
  • California Health and Safety Code §1599.69 (H & S §1599.69) states that the Admission contract shall state in bold capital letters of not less than 10-point type that no certified facility may require as a condition of admission, either in the contract of admission or by oral promise prior to signing the contract, that residents remain in private-pay status for a specified period of time.
  • According to H & S § 1599.66, every contract of admission must clearly and explicitly state whether the facility participates in the Medi-Cal Program.
  • These are just some examples of Admission Agreement protections. If you have any questions about your admission agreement, please call the CANHR office and ask to speak with one of our resident advocates.