The Indiana Court of Appeals recently ruled that a resident’s daughter was not required to use the resident’s money to pay amounts owed to a skilled nursing facility.
In Hutchinson v. Trilogy Health Services, LLC, 2 N.E.3d 802 (Ind.Ct.App.2014), a skilled nursing facility was awarded $2,610.87 plus court costs against a resident’s daughter who signed a move-in agreement at the facility as the responsible party for the resident. Within the agreement, the resident designated her daughter as the party responsible for her finances. The daughter signed the agreement to obligate her to pay the resident’s income and resources towards the amounts owed by the resident to the facility. The daughter failed to make the payments as promised. However, the Indiana Court of Appeals held that the move-in agreement was insufficient to obligate payment and that the facility must come forward with other evidence demonstrating the daughter’s authority over the resident’s finances, like a properly executed power of attorney. The Court’s decision underscores the importance of collecting legal documents, like a power of attorney, upon admission to a facility.
While federal law prohibits a facility certified as eligible for Medicare or Medicaid reimbursement from requiring guarantees as a condition of admission or extended care, a body of law is emerging to address the question of whether a third party may volunteer to personally guarantee payments to a qualified facility. The Hutchinson Court expressly declined to decide whether a volunteered guarantee will be recognized in Indiana.
Patient-designated responsible parties protect the financial soundness of Indiana’s institutions, and enable institutions to provide patient care where reimbursement rates may be insufficient to meet the need.
If you have any questions regarding this decision or matters affecting long term care facilities in Ohio, Indiana, or Kentucky, please contact one of our Long Term Care Practice Group Members.
