Nursing Home Admission Agreement: Clauses to Read Before You Sign
What to look for in a nursing home contract: who signs, payment guarantees, arbitration clauses, fees, discharge terms and what federal law does not allow.
The nursing home admission agreement is a legal contract, and you are generally entitled to read it carefully before signing. The clauses that cause the most trouble are personal guarantees of payment, mandatory arbitration, vague fee terms and discharge conditions. Federal rules bar certified nursing homes from requiring a third party to guarantee payment and from making arbitration a condition of admission, but you still need to read the signature lines and wording closely to avoid agreeing to more than the law requires.
Who is signing and in what role
The first thing to check is the signature block. The resident, if able, should sign for themselves. A family member with legal authority, such as an agent under a power of attorney or a health care proxy, can sign as the resident's representative. Problems arise when a relative signs as the "responsible party" or "guarantor," which can be read as personal liability for the bill.
Look for wording such as:
- "I agree to pay from my own funds if the resident's funds are insufficient."
- "Responsible party" or "guarantor."
- "Jointly and severally liable."
Federal regulations prohibit a facility that participates in Medicare or Medicaid from requiring a third-party guarantee of payment as a condition of admission or continued stay. A facility can ask a representative who has legal access to the resident's money to use those funds to pay, but that is different from promising to pay with your own money. If a document says otherwise, cross out the language, write "signing as agent only," initial it and ask the facility to confirm in writing, or consult an elder law attorney.
Arbitration clauses
Many agreements include a clause that sends disputes, including claims of neglect or wrongful death, to private arbitration rather than a court. Under federal rules revised in 2019, a nursing home may include an arbitration agreement but cannot require it as a condition of admission or continued care, must explain it in plain language, and must allow the resident to rescind it within 30 days. Arbitration can limit your rights to a jury trial and to appeal, so many consumer advocates recommend declining if given the option. If the clause is in the main agreement, ask for a version without it or sign only a separate optional form after you decide.
The financial terms
| Clause | What to check |
|---|---|
| Daily or monthly rate | Exactly what is included; which tier your relative is in |
| Extra charges | Therapy, supplies, salon, laundry, transportation, private aides |
| Deposit or admission fee | Amount, refundability, and when it is returned |
| Rate increases | How often and how much notice; any caps |
| Payment due date and late fees | Interest, collection, and attorney fees |
| Bed-hold | Cost per day and how long the bed is held during hospital stays |
| Personal funds account | How the resident's money is managed and accounted for |
| Medicaid conversion | Whether the bed stays available after private funds run out |
Facilities that participate in Medicaid cannot charge Medicaid residents deposits or require a minimum private-pay period, and cannot ask families to pay extra for services covered by Medicaid. If anyone asks for a "donation" in connection with admission, ask for a written statement that it is voluntary, and call the ombudsman if you feel pressured.
Discharge and transfer terms
Federal rules limit the reasons a certified nursing home can discharge or transfer a resident without consent. They include:
- The resident's needs cannot be met at the facility.
- The resident's health has improved so that care is no longer needed.
- The safety of other residents or staff is endangered.
- The resident's health endangers others.
- Failure to pay after reasonable notice.
- The facility ceases operating.
In most cases the facility must give a written notice at least 30 days in advance, explain the reasons and the resident's right to appeal, and supply the contact for the ombudsman. Shorter notice is allowed for urgent safety or medical reasons. The facility must prepare and orient the resident for a safe transfer. If you receive a notice, call the ombudsman right away and file an appeal within the deadline.
Read the agreement's wording about discharge. Clauses that give the facility broad rights to discharge "at any time for any reason" or that claim the resident must leave if they use Medicaid are inconsistent with federal protections.
Other clauses worth reading
- Consent to treatment and photographs. Ask what you are agreeing to and whether you can limit it.
- Release of liability for lost items. Facilities often limit responsibility; photograph and list valuables and consider leaving them at home.
- Roommate changes. How the facility handles room changes and your right to be informed.
- Visitors. Residents have the right to receive visitors of their choosing; the agreement should not restrict this beyond reasonable policies.
- Advance directives. The facility must tell you about your right to accept or refuse treatment and must not condition care on having an advance directive.
- Resident funds. If the facility manages personal funds, residents have the right to a quarterly statement and to access their money.
A practical review process
- Ask for the agreement and all attachments to take home before admission, even if only for a few hours.
- Highlight anything about money, signatures, arbitration, and discharge.
- Write down questions and ask the admissions director to answer in writing.
- Cross out and initial any clause that conflicts with federal law, and ask the facility to confirm.
- Consider a one-time consultation with an elder law attorney, who may charge a flat fee for contract review.
- Keep a signed copy and all addenda in a safe place.
If you are under time pressure from a hospital discharge, remember that you can ask the facility to admit under a short interim document while you review the full contract, or you can ask the discharge planner for help finding another bed.
Frequently asked questions
Can I sign for my mother if I have power of attorney?
Yes, as her agent. Sign with a clear note such as "Jane Doe, as agent for Mary Doe" so it is plain you are not personally liable.
What if I already signed a personal guarantee?
Contact an elder law attorney or your state ombudsman. Federal rules prohibit requiring one as a condition of admission, so the clause may not be enforceable, but get advice about your situation.
Is arbitration always bad?
It is a trade-off. Arbitration can be faster and private, but it limits court remedies. Because you can decline it without losing admission, take time to decide.
Does the facility have to give me a copy?
Yes. You are entitled to a copy of what you sign, and facilities must provide resident rights information in writing.
Sources
- Centers for Medicare & Medicaid Services — nursing home requirements on admission, arbitration, discharge and resident rights
- National Long-Term Care Ombudsman Resource Center — help reviewing agreements and discharge notices
- National Academy of Elder Law Attorneys — find an elder law attorney
- Consumer Financial Protection Bureau — consumer information on debt collection and contracts
