Nursing Home Admission Contracts in Maryland

The Maryland State Bar Association’s Elder Law Section and the Public Awareness Committee has prepared this information. It is intended to inform the public and not serve as legal advice.

Maryland law requires that a contract must be signed on or before the day an individual is admitted to a nursing home. Whether the paper you signed is called a contract or an agreement, it is considered a legally binding contract that may be enforced in court.

The Maryland Department of Health and Mental Hygiene has developed two model contracts for use by Maryland facilities (1) "Resident Admission Contract" for applicants who are independently capable of entering into a contract, and the other is (2) "Resident’s Agent Financial Agreement" for use by an applicant’s agent when the applicant for admission is either incapable of entering into the contract or has requested the agent to sign. Nursing homes are encouraged to use the model contract forms and, while they are not required to do so, a majority of nursing homes in Maryland use them. A nursing home admission contract that differs significantly may have illegal terms.

If you are planning to enter a nursing home, obtain a copy of the State’s model contract from the Department of Health or your local Long-Term Care Ombudsman. If the nursing home does not use the model contract, ask if they will use it at your request.

Questions about contracts should be discussed with your local Long-Term Care Ombudsman or a lawyer before you sign anything.

The Contract

The Department of Health’s model contract is printed in large type and written in plain English. It explains the terms and conditions that are required by State and Federal law regulating nursing homes. All nursing home contracts should contain the following terms, which are included in the model contract:

• The contract should be between only two parties, the nursing home and you.
• Unless you are incompetent to sign a contract, no one else should be asked to sign the contract. A nursing home may require a third party to sign the contract only when there is a court order appointing a guardian or when your doctor certifies that you are incapable of signing the contract. If a nursing home asks to have a third party sign the contract, the contract should clearly state what the person’s and liabilities will be. Unless a third party (such as a family member) agrees to be personally liable, the contract should state that you and the third party are only liable to the extent of funds you own, and not the third party’s personal funds.
• If the resident has been adjudicated incompetent or, in the opinion of the treating physician, is medically incompetent, his or her rights may be exercised by the next of kin, a guardian, a sponsoring agency or the representative’s payee.
• The nursing home’s "basic rate" should cover: room, board, social services, nursing care, such as dispensing medicine or treatments; skin care, cleaning or grooming, protection from accidents and infections and social and rehabilitative activities.
• A list of all services or items not covered by the basic rate should be included in the contract, as well as the procedures for increases in charges and fees.
• The contract should explain the different costs; what will be covered under your status as a "private pay" Medicare or Medicaid (medical assistance) resident; and how to apply for Medicare or Medicaid coverage if you have not already applied for these benefits.
• Costs may not be increased without 45 days written notice.
• Late fees or penalties may not be charged unless outstanding balances are unpaid for more than 45 days after a bill is mailed or more than 30 days after the end of the billing period, whichever comes later.
• If you are private pay resident who is hospitalized or on leave, you may arrange to have your bed held for you by paying the basic daily rate. The nursing home must hold the bed for a Medicaid resident up to 15 days per hospital visit for hospitalization and up to 18 days per year for a leave of absence.
• The nursing home must investigate your complaints. The contract should explain how to file a complaint with the Long-Term Care Ombudsman and the Department of Health.
• The right to keep personal property, the right to request and receive a reasonable amount of locked storage space and the nursing home’s duty to provide insurance for lost or damaged personal property should be explained. The terms "personal property" and "personal possessions" are included in the model contract, but may not be mentioned in contracts actually used by many nursing homes. Be sure to seek advice on these terms from an attorney or when proper from a representative with any of the organizations listed later under Available Resources.
• The right to handle your own funds, if you are able, and the conditions that someone else may handle your funds on your behalf, should be explained in the contract.
• The only legal grounds that you may be discharged from a nursing home are:

1. medical reason (you no longer need the care provided by the nursing home or you require more care than the nursing home is capable of providing, for example);
2. your welfare or the welfare of others;
3. non-payment of charges you are obligated to pay; and
4. the facility ceases to operate.

• The contract should explain the grounds for discharge from the nursing home and the process for filing an appeal and arranging for a hearing before a State Administrative Law Judge
• Notice requirements in the event of the termination of the contract
• For facilities participating in Medicare or Medicaid, the mandatory initial and periodic resident assessment must include the resident’s discharge potential. When discharge is being considered, the facility must prepare a discharge summary. This must include a post-discharge plan of care that is developed with the resident and will help them adjust to the new living environment. Under Maryland law, even if the facility does not participate in Medicaid or Medicare, the resident’s record must include a written discharge summary, including final diagnosis and prognosis.
• Your rights regarding relocation within the nursing home facility.
• A contract should state that you have the right to make your own medical decisions, either on your own or through a durable power of attorney; explain what a living will is and how it works; and list the conditions under which a family member may make medical decisions on your behalf when no one else has the power to make them. Documents that have been incorporated into the contract should also be explained within the body of the contract. Such documents include:

1. A detailed list of items covered by the daily rate and items that cost extra.
2. A statement of rights and responsibilities of your representative if you have appointed one.
3. Your rights pertaining to personal property and funds.
4. The "Nursing Home Residents’ Bill of Rights."
5. Your rights under Maryland law to make decisions and advance directives about your medical care.
6. An explanation of how to apply for and use Medicare and Medicaid benefits.
7. A list of doctors who practice at the nursing home and who will treat you if you do not have a private doctor.
8. A list of services that may be provided by sources other than the nursing home that will be billed to you separately.

Contract Checklist

The state’s model nursing home admission contract or those fashioned after it, may be the only nursing home contracts that comply with all the requirements of Federal and State law. In addition to the terms summarized from the state’s model contract, you should make sure that:

• There are no blank spaces in the contract when you sign it, all details, such as names, dates and amounts to be paid, should be filled in before you sign the contract. If the admissions officer says that a section "does not apply", mark the section "N/A." Both you and the admissions officer should initial and date any handwritten changes in the contract.
• You should get an exact copy (or photocopy) of the original contract after it has been filled in and signed by both you and the nursing home representative. Everyone who signs the contract and any accompanying papers should get complete copies of everything.
• There should be no condition that requires you to pay privately for a period of time before the nursing home will accept Medicaid.
• A deposit should not be required if you are being admitted from a hospital under Medicare coverage.
• If different parts of the contract seem to contradict each other, ask that they be changed. Better yet, ask the nursing home to use the state’s model contract.
• Broad waivers of liability stating the nursing home is not responsible for any injuries or losses of personal property are excessive. You should never agree to waive liability for injury, illness or loss of property that are the nursing home’s fault.
• The nursing home’s grievance complaint policy should be clear and state that you have the right to make complaints to anyone working at the nursing home, the Long-Term Care Ombudsman or the Department of Health. The nursing home and state agencies have a duty to investigate your complaints and attempt to solve them. It is illegal for anyone at the nursing home to retaliate against you for making a complaint.

Available Resources

This information has only highlighted some of the points you should be aware of before signing a nursing home admission contract. It is not intended as legal advice on individual situations, but points out matters that may require professional advice or assistance. Information and assistance with nursing home admission contracts are available through any of the resources listed below.

Long-Term Ombudsman – (410) 767-1100

Lawyers – call your local Agency on Aging or the Department of Social Services to find a lawyer if you do not have one or to obtain free legal advice if you cannot afford a lawyer.

Division of Licensing and Certification, Department of Health and Mental Hygiene – (410) 764-2770

Medical Assistance Application and Eligibility – (410) 767-1463

Nursing Home Admission Contracts in Maryland © 1986, MSBA, Inc. Revised 1998
All rights reserved. No part of this work may be reproduced in any form without written permission from the Maryland State Bar Association.