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Nursing Homes Filing for Guardianship to Collect Debts

Few people are aware that a nursing home has the power to file for guardianship over its residents. Because guardianship cases are difficult to gain access to or track through the court system the rate at which this occurs is difficult to ascertain. However, research is emerging that shows that this practice is becoming routine for nursing home facilities that have issues with financing the care of their long-term residents.

Nursing Home Guardianship Research

Researchers at Hunter College completed a review of New York state guardianship court data and conducted interviews with seniors that have shown that nursing homes are commonly filing for guardianship over their patients when long-term care costs become an issue. This practice is underscoring the increased power that nursing home facilities have over their residents and their families in regards to the financing of long-term care.

In a random sample of 700 guardianship cases filed in Manhattan alone over the last decade, more than twelve percent were brought by nursing homes to take guardianship over their residents. While some of these cases may have had legitimate purposes such as family feuds, suspected embezzlement, or absence of help to obtain Medicaid coverage, those who know about the guardianship process agree that the majority of these cases were probably used as a means of bill collection.

Why Nursing Homes File for Guardianship

Nursing home facilities primarily use guardianship petitions as a way to collect on unpaid bills or to force the settlement of bill disputes with residents. It is universally agreed upon that this was not the intent of the state legislature when the guardianship statute was enacted in 1993, known as Article 81 of the Mental Hygiene Law, and at least one judge has ruled that the process is an abuse of the law because the nursing homes had brought the petitions solely for the purpose of being paid.

Even if the petition is ultimately unsuccessful, filing for guardianship can force the families of nursing home patients into costly court battles. It is meant as a strategic move to intimidate the families, and as a result most families agree to settle any bill disputes that they have with the facilities in exchange for dropping the guardianship lawsuit.

Purpose of Guardianship

The purpose of a guardianship proceeding is to transfer a person’s legal right to make decisions for themselves to another person appointed by the court. The guardianship act is aimed at helping people who are unable to manage their affairs on their own because of incapacity and need the court to intervene on their behalf. In legal terms, a guardian supplants both a power of attorney and a healthcare proxy.

Typically, the guardian is an attorney appointed by the court who is paid with the ward’s money. However, nursing homes have made the argument that a representative of their facility should act as guardian because using guardianship to secure payment for long-term care is better than suing their own incapacitated resident who cannot respond to the lawsuit.

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