To collect debts, Nursing Home seizing control over patients!

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This story is shocking to me.  I’ve litigated nursing home cases for over ten years and never saw this type of action to collect debts.  New York Times is who investigated and reported on this horrible situation.  In New York City,  there is a nursing home who used drastic moves to get bills paid by patient Lilian Palermo.  She was in the nursing home because of dementia, falls and surgical complications.  She had been at this nursing home since 2010.  Her husband started  disputing nursing home bills that had suddenly doubled Mrs. Palermo’s copays, and complained about inexperienced employees who dropped his wife on the floor.  Subsequently, Mr. Palermo found a six-page legal document waiting on his wife’s bed.  It was a guardianship petition filed by the nursing home, Mary Manning Walsh, asking the court to give a stranger full legal power over Mrs. Palermo, now 90, and complete control of her money.

I will have to be honest.  I did not know that a nursing home can take such a step. According to the New York Times article, the Palermo case is not unique. Interviews with veterans of the system and a review of guardianship court data conducted by researchers at Hunter College at the request of The New York Times show the practice has become routine, underscoring the growing power nursing homes wield over residents and families amid changes in the financing of long-term care.

In a  sample of 700 guardianship cases filed in Manhattan over a decade, Hunter College researchers found more than 12 percent were brought by nursing homes. Lawyers and others versed in the guardianship process agree that nursing homes primarily use such petitions as a means of bill collection — a purpose never intended by the Legislature when it enacted the guardianship statute in 1993.  At least one judge has ruled that the tactic by nursing homes is an abuse of the law, but the petitions, even if they are ultimately unsuccessful, force families into costly legal ordeals.

Brett D. Nussbaum, a lawyer who represents Mary Manning Walsh and many other nursing homes, said Mr. Palermo’s devotion to his wife was irrelevant to the decision to seek a court-appointed guardian in July, when the billing dispute over his wife’s care reached a stalemate, with an outstanding balance approaching $68,000. “The Palermo case is no different than any other nursing home bill that they had difficulty collecting,” Mr. Nussbaum said, estimating that he had brought 5,000 guardianship cases himself in 21 years of practice. “When you have families that do not cooperate and an incapacitated person, guardianship is a legitimate means to get the nursing home paid.”

Guardianship transfers a person’s legal rights to make some or all decisions to someone appointed by the court — usually a lawyer paid with the ward’s money. It is aimed at protecting people unable to manage their affairs because of incapacity, and who lack effective help without court action. Legally, it can supplant a power of attorney and a health care proxy.  Although it is a drastic measure, nursing home lawyers argue that using guardianship to secure payment for care is better than suing an incapacitated resident who cannot respond.

Many judges go along with such petitions, according to lawyers and others involved in the process. One judge who has not is Alexander W. Hunter Jr., a longtime State Supreme Court justice in the Bronx and Manhattan. In guardianship cases in 2006 and 2007, Justice Hunter ordered the nursing homes to bear the legal costs, ruling they had brought the petitions solely for the purpose of being paid and stating that this was not the Legislature’s intent when it enacted the statute, known as Article 81 of the Mental Hygiene Law.  Last year Justice Hunter did appoint a guardian in response to a petition by Hebrew Home for the Aged at Riverdale, but in his scathing 11-page decision, he directed the guardian to investigate and to consider referring the case for criminal prosecution of financial exploitation.

Many cases in which judges grant nursing homes’ guardianship petitions never come to light. But one that challenges the legal propriety of such petitions for bill collection is now pending before the Appellate Division of the State Supreme Court. Without explanation, that record, too, is sealed from public scrutiny.  Throughout the country, data is lacking on the most basic facts about guardianships, even how many there are. In New York State, with different rules in 62 counties and no centralized database, it has taken a team of researchers more than two years to collect information from a fraction of case files in 14 counties, said Jean Callahan, the director of the Brookdale Center on Healthy Aging at Hunter College.  Preliminary findings of the center’s study are not expected until later this year, but at the request of The Times, the researchers undertook a breakdown of the petitioners in a sample of the 3,302 guardianship cases filed in Manhattan from 2002 to 2012. More frequent petitioners than nursing homes (12.4 percent) were hospitals (16.1 percent), friends and family (25.3 percent) and Adult Protective Services (40.1 percent).

New York’s guardianship statute was part of a national movement to limit guardianships to the least restrictive alternatives necessary to prevent harm. A petition is supposed to be brought only by someone with the person’s welfare at heart, and guardianship is to be tailored to individual needs, taking into account the person’s wishes.  Instead, Ms. Callahan said, “it has become a system that’s very focused on finances.”

The cases are arising as the country ages, with about 19 percent of Americans slated to be older than 65 by 2030, up from about 12 percent in 2000, according to the Administration on Aging. Nursing homes can cost more than $50,000 per year, with about one-third of residents paying the costs from their own assets, the AARP notes.

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