How to Review an Assisted Living Agreement
Moving yourself or a loved one into assisted living is not as easy as “I found a great facility and, starting next week, I’ll live there.”
The process starts with “Hey, I wouldn’t mind living in a community, surrounded by professionals who can tend to my needs,” and ends with reviewing offers and trying to decipher the industry jargon and legalese in agreements and other documents.
This is not part of a ploy to make this change even more difficult than it has to be. It’s just how all things are with major life decisions. Plus, if you’re prepared and know what to look for or what questions to ask, it’s a lot easier.
This is why, in today’s piece, we’ll highlight the most sensitive and important sections in any assisted living agreement. If you know how to handle these, the rest is easy.
Assisted Living Agreement Sections To Pay Attention To
Unless you are familiar with industry jargon and legal terms, you will need guidance from a lawyer with expertise in healthcare and life sciences, particularly one who understands state regulations governing assisted living facilities, resident rights, and long-term care compliance.
Book a meeting with a legal representative you trust and have them check the agreements for facilities that have caught your interest. It’s the best way to make sure you fully understand the conditions.
Now, back to our main topic — assisted living agreement sections to pay close attention to.
Level(s) of Care
The main advantage of assisted living is that residents receive care services while also living on the premises. This is why the agreement doesn’t read like a lease, but more like a complex service contract with a real estate component.
The real estate component is usually clear, as most facilities use a base rate for rent, but you have to pay close attention to fee escalators, which are often included as "Levels of Care." These Levels of Care are usually described as tiers of Activities of Daily Living (ADLs), such as bathing, dressing, and medication management.
Contracts often state that the facility has the sole discretion to determine when a resident moves to a higher (and more expensive) tier. And this is where most financial issues arise from. Look for a detailed "Point System" or "Tier Matrix" attached as an exhibit. If the contract says "fees are based on resident needs" without a price list, you’re basically signing a blank check.
Involuntary Discharge Clause
This is the most litigated section of these agreements. Facilities are businesses; if a resident becomes "too difficult" or requires more staffing than the facility prefers to provide, they may trigger a discharge.
Vague language like "if the resident’s needs exceed the facility’s ability to provide services" allows the facility to push out residents who have become high-maintenance but don't yet require nursing home care.
Look for specificity on notice periods (usually 30 days) and the right to appeal the assessment. Also, make sure there is a "bed hold" policy if the resident needs a temporary hospital stay.
Mandatory Arbitration Clauses
Hidden in the "Miscellaneous" or "Dispute Resolution" section, these clauses require that any legal claim (including personal injury or wrongful death) be handled via private arbitration rather than a public court.
While not wrong per se, arbitration is often more expensive for the resident and tends to favor the facility. The good news is that the law in most states allows you to opt out of this specific clause without being denied admission.
Third-Party Liability and The Responsible Party
Facilities often ask a family member to sign as a so-called "Responsible Party." This is a normal practice, as assisted living facilities want to have a third party who can make financial and medical decisions should the situation arise.
However, ambiguous wording can make the Responsible Party personally liable for the resident’s bills. Under the Federal Nursing Home Reform Act, facilities cannot require a third-party guarantee of payment, so it’s important to ensure this party will only be liable for using the resident’s funds to pay the bills, not their own personal assets.
In Summary
Assisted living facilities are usually not out to profit from their residents’ lack of legal and industry knowledge, but they are still businesses. This is why it’s paramount to have proper legal counsel when you decide to make this step (for yourself or on behalf of a loved one).