Nursing Homes File Guardianship Petitions to Collect from Residents

Guardianship_contentOne day last summer, after he disputed nursing home bills that had suddenly doubled Mrs. Palermo's copays, and complained about inexperienced employees who dropped his wife on the floor, Mr. Palermo was shocked to find a six-page legal document waiting on her bed. 

Mr. and Mrs. Palermo had planned ahead for the worst possibilities of aging. Mrs. Palermo had given power of attorney and health care proxy to her husband, Dino. But when Mr. Palermo and the nursing home caring for his wife got into a dispute, the nursing home filed a guardianship petition asking the court to give a stranger full legal power over Mrs. Palermo and complete control of her money. Few people are aware that a nursing home can do this, according a recent New York Times article titled "To Collect Debts, Nursing Homes Are Seizing Control Over Patients." Sadly, the article states that the home can do this, and the Palermo case is not uncommon.

More than 12 percent of guardianship cases are brought by nursing homes. Many of these may have been brought as a means of bill collection, which was never intended when the New York legislature enacted the guardianship statute. Some courts have ruled that this legal tactic by nursing homes is an abuse of the law, but these petitions—even if unsuccessful—make families spend time and money in costly legal ordeals.

Guardianship transfers a person's legal rights to make some or all decisions to someone appointed by the court, usually an attorney. Guardianship is designed to protect people who cannot manage their affairs because of incapacity, and who lack effective help without court action. In effect, it can legally trump a power of attorney and a health care proxy. Although it can be a drastic measure, nursing home lawyers say that using guardianship to secure payment for care is better than suing an incapacitated resident who is unable to respond.

A court evaluator said that Mr. Palermo was the appropriate guardian and wanted to know why the petition had been filed. Mr. Palermo agreed to pay any arrears once Medicaid completed a recalculation of the bill, but his expenses in fighting the issue were more than $10,000. Medicaid's recalculation eventually put his wife's monthly copay at $4,500, about $600 less than the nursing home claimed, but more than the $2,600 that Mr. Palermo had been paying under an earlier Medicaid calculation.

The nursing home cashed Mr. Palermo's check for the outstanding balance and withdrew the guardianship petition. The New York Times pointed out that a petition is supposed to be brought only by someone with the person's welfare at heart, and tailored to individual needs, taking into account the person's wishes.

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Reference: New York Times (January 25, 2015) "To Collect Debts, Nursing Homes Are Seizing Control Over Patients"