Under the Omnibus Reconciliation Budget Act of 1987 (OBRA ’87), it is a violation of federal law for a skilled nursing facility to require the guarantee payment by a third party of prospective resident’s nursing home expenses. See CFR § 483.12(d)(2).

Although third party guarantees are prohibited, it is perfectly fine for the facility to ask a third party to sign on behalf of the prospective resident if he or she is the prospective resident’s guardian, agent, or attorney in fact. NOTE: It is the responsibility of the individual acting under this authority to review the applicable documents for the authority to enter in contracts or arrange for medically necessary nursing care on behalf of the prospective resident. In some cases, more than one individual may need to sign on behalf of the prospective resident (i.e Agent and Healthcare Proxy) Issues will arise if one signs under a power he or she was not granted.

Skilled nursing facilities can require you to sign as an agent for the prospective residence because you are contracting only under your fiduciary capacity and not as a guarantor with personal liability. In essence, you are only promising the facility that you will act to the best of your ability to effectuate payment on behalf of the prospective residence.

How To Sign: Your name, followed by “as power of attorney or guardian for [principal’s name].

Ex: “John Doe, as Power of Attorney for Jane Doe”

Special circumstances for spouses: New Jersey case law finds that, a spouse can sign admission documents for skilled nursing facilities and will in fact take on personal financial liability since spouses are legally responsible for each other’s necessary medical bills. Further, the court found that it is appropriate for skilled care facilities to rely on this apparent authority. See Jersey Shore Medical Center-Fitkin Hospital v Estate of Baum, 84 N.J. 137, 417 A.2d 1003 (1980) Part of this reasoning is based on the Doctrine of Necessities which views marriage as a partnership making each spouse liable for the necessary expenses incurred during the course of the marriage. Therefore, a spouse should consult an elder law attorney for guidance on what the spouse’s rights are and to formulate a method of payments that protects these rights.

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