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Court Holds Responsible Party Provisions are Consistent with Nursing Home Reform Act

In the recent case of Eades v. Kennedy, PC Law Offices, the United States Court of Appeals for the Second Circuit found that provisions of an admission agreement that imposed certain financial obligations on the husband of a nursing home resident did not violate the Nursing Home Reform Act (NHRA), and that the NHRA does not preempt Pennsylvania's indigent support statute. In that case, the daughter and husband of a deceased nursing home resident filed suit against the law firm hired by the nursing home to collect resident's unpaid bill. As part of their claim, the plaintiffs claimed that the responsible party provisions of the admission agreement were unlawful under the NHRA. They further argued that the NHRA preempted Pennsylvania's indigent support statute.

The NHRA prohibits a nursing facility that participates in Medicare or Medicaid from requiring a third party guarantee of payment to the facility as a condition of admission, expedited admission, or continued stay in a facility. However, the NHRA allows a facility to require an individual who has legal access to a resident's income and resources to sign a contract to pay for the resident's care from the resident's income or resources. Because the nursing facility's agreement obligated the plaintiff to use the resident's resources to pay for her care, the Court found that the admission agreement was consistent with the NHRA.

The Court also concluded there is no actual conflict between the NHRA and Pennsylvania's indigent support statute, explaining that the purpose of the NHRA is to protect residents from expulsion or denial of admission to nursing care facilities, not to shield family members from responsibility for the residents' care. The Pennsylvania indigent support statute holds an indigent person's spouse or child liable for maintenance or financial support unless the spouse or child is financially unable to do so or meets other statutory exceptions. As long as the nursing home refrains from conditioning a resident's admission or continued stay based on a third party guarantee of payment, it is permitted to petition the court for payment from an indigent person's spouse or children under the appropriate circumstances.

If you have any questions regarding collections, guardianships, or Medical Assistance eligibility, please do not hesitate to contact Steven M. Montresor

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