Legal Issues in Nursing Home Admissions

Taylor E.A. , Draft Report: Unnamed Nursing Home Investigation (Seattle: Federal Trade Commission, 1981). Although the author of the report recommended additional regulation, the agency declined to adopt her recommendation and issued the 139-page report in draft form with disclaimers.

Id., at 47

Ambrogi D.M. and Leonard F. , Nursing Home Admission Agreements: State Studies, National Recommendations (San Francisco: California Law Center on Long Term Care [CALC], 1988); Ambrogi D.M. Doctor D. and Swan J.H. , The Admission Process in California Nursing Homes and Its Impact on Resident Autonomy (San Francisco: CALC, 1988); Subcommittee on Law and the Elderly, Maryland Nursing Home Contracts, A Manual for Residents and Advocates (Baltimore: Maryland State Bar Association, 1987); Schneider M.D. and Oliver L. , North Dakota Long Term Care Facilities Admission Contract Terms; Survey of North Dakota Nursing Homes (Bismarck: Legal Assistance of North Dakota, 1987); Ambrogi D.M. and Gerard L.E. , Autonomy of Nursing Home Residents: A Study of California Admission Agreements (San Francisco: CALC, 1986); Irion J.S. Jr. , A Study of Illegal and Questionable Terms in Louisiana Nursing Home Admission Contracts (Baton Rouge: Louisiana State Ombudsman Program, 1985); Wacker R.R. , Long-Term Care Admission Agreements in Colorado: A Review (Denver: Advocacy Assistance Program, 1985); Legal Services for the Elderly, Illegal and Questioned Terms in Nursing Home Resident Contracts: A Report to the Nursing Home Ombudsman (Augusta: Maine Committee on Aging, 1983).

Ambrogi and Gerard , supra.

Health California and Code Safety 1599.60-.84. This statute went into effect on January 1, 1988.

22 Maine Revised Statutes Annotated 1826–7 (1985). Maryland Health-Gen. Code Ann. 19–345 (1988). Minnesota Statutes 80D.04, 144.6501 (1989).

Omnibus Budget Reconciliation Act of 1987 (OBRA), Subtitle C, PL 100–203, 1819(c)(5) and 1919(c)(5) (1987). There will be a new section under Residents' Rights entitled “Admissions Policy”. As of October 1, 1990, facilities certified for participation in Medicaid and/or Medicare may no longer require applicants for admission to waive their rights to Medicaid or Medicare benefits; they may not require “oral or written assurances” that applicants for admission are not eligible, or will not apply, for Medicaid or Medicare; and they must provide oral and written information about applying for benefits and receiving refunds to all applicants for admission. Most importantly, after that date, they will no longer be able to require a third party guarantee of payment (i.e., a personally liable financial guarantor) for any applicant, whether private pay or on Medicaid or Medicare.

The relations and legal obligations between a patient and a health care provider were the setting for Tunkl v Regents of the University of California, 383 P.2d 441, 32 Cal. Rptr. 33 (1963). Tunkl, involving a dispute over an exculpatory provision in a hospital's patient admission agreement, represents the first important judicial statement on adhesion contracts.

Madden v. Kaiser Foundation Hospitals, 552 P.2d 1178, 131 Cal. Rptr. 882 (1976).

Uniform Commercial Code 2–302 (1962).

A&M Produce Co. v. FMC Corp., 135 Cal. App. 3d 473 (1982).

U.S. General Accounting Office, Medicaid and Nursing Home Care: Cost Increases and the Need for Services—Problems for the States and the Elderly (Washington, D.C.: GPO, 1983).

Id., at 53.

Id.

Institute of Medicine, Improving the Quality of Care in Nursing Homes (Washington, D.C.: National Academy Press, 1986).

Id. In recent testimony before the FTC, a representative of a national nursing home reform coalition confirmed that free market forces are still impaired by occupancy rates that exceed 90% in much of the country, guaranteeing a “seller's market.”

Id., p. 58.

Ambrogi, Doctor and Swan, supra note 3.

Harris S. , “Rethinking Admissions”, AHCA Journal, 12 (1986).

See, e.g., Cal. Health & Safety Code 1599.65(a). In 1986, Health Care Financing Administration advised the Maryland State Office of Licensing and Certification that it was illegal for facilities to have other persons sign an admission contract instead of the resident unless the resident had been found by a court to be incompetent or certified by doctors to be incompetent. Maryland Department of Health and Mental Hygiene memorandum on “Devolving of Patients' Rights”, September 4, 1986.

Ambrogi and Gerard , supra note 3. See also Buckingham S.C. , Admission Agreements of Maryland Nursing Homes Admission Contracts (Baltimore: Maryland Department of Health and Mental Hygiene, 1987).

Minors are legally incompetent to sign a contract, whether or not they actually lack this capacity. But in contrast to elders, young adults—once of age—are rarely questioned on contractual capacity, no matter how bad their judgment proves to be.

See, e.g., Ambrogi and Gerard, supra, at B-3.

For example, almost 80% of all 70-year old persons suffer from defective visual acuity (less than 20/40 vision); by age 80, this figure has risen to nearly 90%. (Harris, Fact Book on Aging: A Profile of America's Older Population, 100 (Washington: The National Council on the Aging, 1978)).

California Health and Safety code 1599.64 requires use of 10-point type on plain white paper, and use of “clear, coherent and unambiguous language.” Illinois regulations require that nursing home admission contracts “shall be written in clear and unambiguous language and shall be printed in not less that 12 point type”. (Regulation 03.03.11.00.) Although there is no federal law governing type size and language in nursing home admission agreements, under a recent federal court order, Explanation of Medicare Benefits (EOMB) forms must be made in not less than 10-point type, in “the simplest English possible”, and in both upper and lower case printing. (The Gray Panthers et al. v. Heckler, Medicare and Medicaid Guide (CCH) 34,981, U.S. District Court, District of Columbia, Nov. 4, 1985).

Johnson , “Weighing in on the Flesch Scale”, 8 Student Lawyer 7–8 (Jan. 1980). Some states require insurance policies and other consumer documents to achieve a certain minimum score on the Flesch scale. For example, Mass Gen. Laws Ann., Ch. 1752B requires insurance policies to achieve a Flesch score of at least 50.

Ambrogi and Gerard , supra, B-5.

California Association of Health Facilities (CAHF), Model Admission Agreement, 13 (Sacramento: CAHF, 1986).

Perdue v. Crocker National Bank, 216 Cal. Rptr. 345, 702 P.2d 503, 38 Cal.3d 913 (1985).

See, e.g., Cal.Civ. code 1750 et seq.

Ambrogi & Gerard , supra, at C-1.

Glengariff v. Snook, 471 N.Y.S. 2d 973, Medicare and Medicaid Guide (CCH) 33,605 (N.Y.S. Ct., Nassau County, 1984).

See, e.g., 42 C.F.R. 405.1121 (k)(13). 22 Maine R.S.A. 1826(2)(D). Cal. Health and Safety Code 1289.3-.5 (1988); 22 Cal. Admin. Code 72529.

See Wadleigh , Personal Property of Nursing Home Residents: Remedies for Loss and Theft, 67–71 (San Francisco: CALC, 1984), for practical suggestions.

See, e.g., Cal. Health & Safety Code 1599.62. 22 M.R.S.A. 1826(2)(D). Minn. Statutes 80D.04.

Varney v. Ditmars, 217 N.Y. 223, 111 N.E. 822 (1916).

Medicaid recipients have the most to lose if the agreement inadequately or inaccurately describes covered services, because they have only a small monthly “personal needs allowance” ($30–50 in most states) with which to cover all expenses not covered by Medicaid. The 1987 OBRA reforms attempt to rectify this lack of clarity by requiring the federal Health Care Financing Administration (HCFA) to define those items and services to be included in the Medicare and Medicaid rates, and those which may be charged to the resident's personal funds. 42 U.S.C. 1395i-3(f)(7), 1395r(f)(7).

Office of Research and Demonstrations, Health Care Financing Administration, Short-Term Evaluation of Medicaid: Selected Issues 123, No. 84-9. (Washington, DC: U.S. Department of Health and Human Services, 1984).

42 C.F.R. 405.1121(k).

Glengariff v. Snook, supra. 42 U.S.C. 1396h(d). Cal. Welf. & Inst. 14110.8. See also Ambrogi and Gerard, supra, D-8.

U.S.C. 1395e-3(c)(5)(A)(i), 1395r(c)(5)(A)(ii) (one of the most significant provisions of the 1987 OBRA reforms).

42 U.S.C. 1395i-3(c)(5)(A)(i), 1395r(c)(5)(A)(i).

Sabatino C. , “Nursing Home Admission Contracts and Residents Rights”, in Personal and Estate Planning for the Elderly, 99 (Washington, D.C.: American Bar Association,1989).

42 U.S.C. 1320a-7b(d).

42 U.S.C. 1396r(c)(5)(B).

The OBRA legislation contains a somewhat revised statement of residents' rights, 42 U.S.C. 1395i-3(c), 1396r(c).

See, e.g., Cal. Health & Safety Code 1430.

National Citizens Coalition for Nursing Home Reform (NCCNHR), A Consumer Perspective on Quality Care: The Residents' Point of View, (Washington, DC: NCCNHR, 1985).

Id.

Ambrogi and Gerard , supra, E-6.

See, e.g., Cal. Health & Safety Code 1599.72.

See, e.g., Cobbs v. Grant, 104 Cal. Rptr. 505 (1972)

Most states have strict statutory procedures for surrogate health care decision-making.

42 C.F.R. 405.1121(k)(4), 442.311(c).

42 U.S.C. 1395i-3(c)(2)(A), 1396r(c)(2)(A).

OBRA requires 30-days notice in most cases with fairly stringent due process safeguards. 42 U.S.C. 1395i-3(c)(2) and (e)(3), 1396r(c)(2) and (e)(3).

See footnotes 5 and 6, supra.

See, e.g., Cal. Health & Safety Code 1599.61. Maryland Health-Gen. Annotated Code 19–308.3(b).

The recent OBRA nursing home law legislated many of the reforms directly, rather than through the contract itself. For example, states must develop written notices addressing the rights of Medicaid beneficiaries in the nursing home admission process (deposits, retroactivity, bed-holds, etc.) yet these protections are not required to be in the contract language itself. OBRA, 4211.

See, e.g., 22 Maine Revised Statutes Annotated 1826.2.A., C.,D.,E., and H.

Ambrogi and Leonard , supra.

See Horvath D. and Nemore P. , “Nursing Home Abuses as Unfair Trade Practices”, 20 Clearinghouse Review 801 (1985).

See Nursing Home Admissions Contracts in Maryland (Baltimore: Maryland State Bar Association, 1988) and Consumer Guide to Nursing Home Admission Agreements (San Francisco: California Law Center on Long Term Care, 1988) as examples of materials which could be made available to the public by state agencies.