CA’s Standard Admission Agreement Must Be Revised, But NSCLC’s Intervention Arguments Limit the Damage

A California trial court has ordered the Department of Health Services to revise the state’s standard nursing facility admission agreement.

Fortunately, the required revisions are relatively limited, although the delay caused by the lawsuit certainly has been and will be detrimental to nursing facility residents.  Parkside Special Care Ctr. v. Shewry, Writ of Mandate, Case No. GIC 860574 (San Diego Sup. Ct. March 21, 2007). Click here to read the Writ of Mandate

The overall delay has been substantial.  The legislation dates back to 1997.  The law required the Department of Health Services by January 1, 2000, to develop a standard admission agreement that would be mandatory for all nursing facilities in the state.  Due to extraordinary delays by the Department, the admission agreement was not finalized until mid-2005, for mandatory use starting on January 1, 2006.

In early 2006, the California Association of Health Facilities, along with three individual nursing facilities, filed suit against the state to invalidate the standard admission agreement.  Challenges were both broad and specific.  One broad challenge alleged that the standard admission agreement interfered with a claimed freedom of contract.  Also, the plaintiffs alleged violation of equal protection on the grounds that standard admission agreements had not been required of other types of businesses.

 The specific challenges focused on areas in which provisions of the standard admission agreement allegedly either conflicted with relevant law or were unworkable for some subset of nursing facilities.  For example, the plaintiff nursing facilities alleged that the arbitration-related provisions conflicted with the Federal Arbitration Act, and provisions related to resident records did not comply with provisions of the federal Health Insurance Portability and Accountability Act (HIPAA).  The admission agreement’s payment provisions were written with a daily rate, and allegedly were incompatible with some facilities’ use of monthly rates.

The court’s writ of mandate ruled in favor of the facilities on six issues.  The rewritten standard admission agreement must:

• comply with HIPAA,

• authorize room-to-room transfers without  a 30-day advance notice,

• acknowledge that a resident’s right to leave does not apply to residents under involuntary confinement or a “severe cognitive impairment”,

• state that status as a resident’s agent does not, in and of itself, make the agent liable for the resident’s nursing facility expenses,

• impose no posting requirements other than those otherwise required by law, and

• allow, when a resident becomes Medicaid-eligible after originally paying privately, the facility to refund private payment only after the facility has received Medicaid payment for the period in question.

 Notably, however, the court ruled against the plaintiff facilities on their big-ticket arguments.  The court, for example, ruled that the admission agreement was not required to include an arbitration provision.  The court also rejected the plaintiffs’ constitutional arguments.

 
A tentative writ of mandate had included very troubling provisions relating to third-party guarantees of payment and intra-facility transfers.  In response to the tentative writ, NSCLC and private firm Luce  Forward moved to intervene on behalf of California Advocates for Nursing Home Reform (CANHR) and nursing facility resident Vergean Capp.  The intervention motion was denied, but only after a lengthy discussion on the merits between the judge and NSCLC attorney Eric Carlson.  Subsequently NSCLC and Luce Forward filed an amicus brief in response to a last-minute brief filed by the plaintiffs.  Ultimately, the court deleted the troubling guarantee-related language, and added language to specify that intra-facility transfers were subject to federal requirements (including a resident’s right to veto Medicare-motivated intra-facility transfers).

 Questions should be directed to Eric Carlson in NSCLC’s Los Angeles office.