At Chayet & Danzo, LLC, our elder law practice includes legal counsel for people across Colorado about long-term care. Placement counseling includes review of facility admission agreements to advise clients about the ramifications of signing them as written or to help in the negotiation of modifications before signing.
Admission contracts are long and detailed. They may include legal terms that are confusing, making their impact unclear to the signer.
Unfortunately, residents, guardians, people with powers of attorney and family members often feel at the mercy of large corporations that own assisted living facilities, nursing homes and similar long-term care facilities. At a time when an elder’s health is declining or acutely serious, the person faced with signing the contract at admission, who may be upset and stressed, may feel pressure to sign.
It is important, however, to see a lawyer about the contract before signing. The admission agreement imposes a major financial obligation and concerns the personal and medical care of a vulnerable person. An elder law attorney will understand the need for an escalated meeting under the circumstances, given the need for admission and the fear that the placement may be lost if there is delay.
Provisions of concern
The current issue of Consumer Reports has an article about these contracts in the context of assisted living facilities. The author advises legal oversight and advice about four features:
- Costs, fees and payments: The provisions about fees and rent may be confusing and extremely expensive. Be sure that an attorney explains the enormity of what is being agreed to financially. Consider negotiation if there are items that do not apply to your situation or that are unreasonable.
- Liability for financial commitment: Legal counsel should carefully consider who is going to be on the hook for paying the bills. Will it be the patient alone? What assets may be at risk? What about the impact on a spouse? If the person signing is a family member, guardian, conservator, attorney-in-fact (pursuant to a power of attorney) or other agent for the elder, could the contract be construed to assign financial responsibility to them personally? If the facility accepts Medical Assistance (Health First Colorado), the lawyer must consider complex rules about assets and money that could potentially affect the elder, his or her spouse or other family members.
- Discharge provisions: The Consumer Reports article cites the directing attorney of a senior citizen advocacy organization for his opinion that if the contract language describing when and on what basis the resident can be discharged “is not specific, the management can make decisions on an ad hoc basis.” In negotiation, the facility may agree to more concrete terms about potential eviction.
- Arbitration clauses: Admission agreements commonly contain mandatory arbitration provisions that require resolution of future disputes between the parties in binding private arbitration, instead of in a court of law. This is controversial because it deprives the elder of his or her constitutional right to resolve disputes in court before a jury. Instead, a private arbitrator will decide disputes and the decisions will not be appealable. This is likely not a favorable arrangement for a patient and his or her family.
More on arbitration clauses
The law and policy surrounding these arbitration clauses are extremely complex and should be carefully discussed with an elder law attorney. Earlier this year, the U.S. Supreme Court in Kindred Healthcare, Inc., v. Clark upheld the validity of such a clause under federal and Kentucky law when the agreement was signed by an attorney-in-fact, except as it concerned a wrongful death claim.
The validity of every arbitration clause should be individually evaluated by an attorney under the terms of the agreement, in light of the applicable federal and state law and considering the legal powers of the person signing. The lawyer should also explain the pros and cons of signing and discuss whether the provision should be negotiated or declined. Ultimately, whether to sign an agreement with such a provision if the facility will not negotiate or take it out is a major decision to make with careful legal and practical consideration under the guidance of an attorney.