The aphorism “no good deed goes unpunished” may be best exemplified by the individual who agrees to sign a nursing home admission agreement on behalf of another person. Such contracts may not condition admittance upon a guarantee by the third party. However, they may contain a provision allowing breach of contract suits against the third party for failure to use the resident’s funds to pay for the resident’s care. There may be further liability under the Debtor Creditor Law if the third party transferred resources of the resident that results in the rejection of a Medicaid application. If the prospective resident is not capable of signing the agreement, a third party may be asked to sign a contract that contains language such as:

In consideration of the fact that the Responsible Party wishes to facilitate the Patient/Resident’s admission to the facility, the Responsible Party personally and independently guarantees continuity of payment to the Facility from the Patient/Resident’s funds for the cost of the Patient/Resident’s care. Unless the Responsible Party is otherwise obligated by law to pay for the Patient/Resident’s care, as the Patient/Resident’s spouse may be, the Responsible Party is not required to use his/her personal resources to pay for such care.

The terminology in such contracts is often confusing because the third party may be identified as “responsible party,” “designated representative” or “sponsor.” The capacity in which the third party is signing is also likely to be obscure. There is often doubt as to whether the third party is a personal guarantor of the nursing home charges or an agent of the resident.

Nursing Home Reform Act

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