Signing parent's nursing home admission agreement as a "responsible party" could be a costly mistake

Facing growing financial pressure and withering funding sources, in the future nursing homes will be more likely to pursue a resident's children for unpaid bills. With the average cost of a Florida long-term care nursing facility now nudging upwards of $9,000 per month, few adult children can afford to shoulder that financial burden.

Whether you are on the hook for your parents' nursing home bills not covered by Medicaid, Medicare or other insurance can largely depend on how you sign your parents' admission forms. Take the recent case of Andover Retirement Village vs. Richard Cole: When Richard Cole admitted his mother into an Ohio  nursing home, he was presented with two sets of papers: The first form, the admission agreement, he signed clearly as his mother's power of attorney, indicating he would pay the nursing home out of his mother's funds. But he signed the second form, a financial responsibility contract, as the "responsible party." After his mother died, the nursing home sued him for the unpaid bills. The court found him liable, and the ruling was upheld on appeal. You can read the case here. 

In another case, a nursing home in Pennsylvania used that state's seldom-used filial responsibility statute as the basis for suing a child. In  Health Care Retirement Corporation vs. Pittas, the Pennsylvania courts found John Pittas responsible for his mother's $93,000 nursing home bill -- even though he had signed nothing. (His mother had applied for Medicaid but had left the country before the application was finalized.) Many states have a filial responsibility law on the books although historically, those laws have been ignored. Now however, the demographic tsunami that is the Baby Boomer generation, along with diminishing sources of revenue for nursing homes, could well find such laws  revived in states where they are on the books, or instituted in states like Florida that don't currently have them.  

How to ensure that you are not responsible for your parent's bills? Right now, the best way to protect yourself is to be vigilant if you sign your parent's nursing home admissions forms. If your case is typical, your parent will not be capable of signing for himself/herself. The admission will likely be a tough decision for you and the family, and you may be overwrought and exhausted. Even so, read the fine print, and pay attention to what you are signing. If you are your parent's attorney-in-fact under his/her power of attorney, sign in that capacity, specifically indicating that you are signing ONLY in that capacity, and not as the financially responsible party or a guarantor.  If you do not have a power of attorney that authorizes to act on behalf of your parent, sign nothing, letting the nursing home know that you do not have the authority to act.