Laws Allow Claims Against Fiduciaries for Nursing Home Care

To follow-up on my post on November 14, 2003, regarding the responsibility of others to pay for nursing home costs, and similar posts on this blog regarding Medicaid planning, two states have recently enacted laws that allow nursing homes to sue fiduciaries and recipients of transfers if such transfers lead to Medicaid disqualification.

On July 2, 2013, the New Hampshire legislature enacted what appears to be the first law that gives nursing homes the power to sue anyone who received a transfer from a nursing home resident, and also makes the resident’s fiduciaries liable for the cost of care under certain circumstances.

N.H. Rev. Stat. Ann. §151-E:19 provides that if a nursing home resident transfers assets and that transfer leads to a Medicaid disqualification, the nursing home can sue the person who received the transfer for the nursing home resident’s cost of care (up to the amount transferred). The transferee will be liable at the Medicaid-pay rate, not the private pay rate.  The person sued under this provision can challenge whether the transfer should have been disqualified in the first place.

In addition, N.H. Rev. Stat. Ann. §151-E:19 allows the nursing home to sue anyone who has control of the resident’s assets, has the authority to file a Medicaid application on behalf of the resident, and is negligent in filing the application.  This provision applies to the resident’s fiduciaries, which could be someone acting as the resident’s legal guardian, trustee, representative payee, and/or attorney-in-fact under a Durable Power of Attorney.  The fiduciary would be responsible for the resident’s cost of care for the period the resident was not covered by Medicaid.  A resident’s fiduciary may also be liable if he or she refuses to pay the resident’s liability amount.

Similarly, on October 1, 2013, Connecticut enacted Public Act 13-234.  This new law gives skilled nursing facilities a cause of action to recover debts for services rendered during the Medicaid penalty period and authorizes them to sue recipients of asset transfers if the gift made a resident ineligible for Medicaid benefits.  The new law also provides nursing facilities with the right to bring suit when a resident is receiving Medicaid benefits but the resident’s income co-payment is not being remitted to the facility.  Additionally, if the action against the recipient is successful, the transferee may also be liable for court costs and the nursing facility’s attorney’s fees.

These new laws in New Hampshire and Connecticut may be part of a trend to make perceived “wrongdoers” (i.e. recipients of gifts from nursing home residents) liable for unpaid nursing home costs.  These laws could represent an evolution beyond traditional state filial liability laws that make spouses and/or children liable for unpaid nursing home costs even if the children were not “wrongdoer” recipients of any asset transfers.  To date, this trend has not spread to Massachusetts; however, we will keep you updated if it appears that the Commonwealth is contemplating such a move.  Duck

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About Jason Port

Jason is an associate in the firm's Trusts and Estates Group, Family Law Group and Land Use Group. He focuses his practice on estate planning, estate administration, guardianships, conservatorships, probate litigation, elder law matters, family law controversies and residential real estate transactions.
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