Preventing Exploitation and Fraud Amongst Long-Term Care Providers and Medicaid Advisors

Important consumer protection legislation for seniors and others who need-long term care has been introduced by New Jersey State Senators Joseph F. Vitale and Robert W. Singer. This bill, S3606, addresses a variety of problems that advocates have been fighting against for years but have recently come into the public spotlight due to some great reporting on exploitation of residents. Most nursing home operators work with residents and their families to ensure timely payment and seek appointment of a guardian through the courts if there is no one who can legally act for incapacitated residents. Unfortunately,  some operators take matters into their own hands and will force vulnerable residents to sign Powers of Attorney (POAs) or authorize the facility to have direct access to their assets, often when the residents are incapable of understanding that is happening. Recent reports have uncovered instances of residents having their homes sold and other assets liquidated without their knowledge or consent. The new bill would prohibit staff or owners of long-term care facilities from serving as power of attorney for any resident.    

The proposed legislation goes even further to address abuses in the long-term care industry. It proposes that a standard admission agreement be developed by the state for use in all long-term care facilities in New Jersey. Admission to such a facility is often an incredibly difficult and emotional time. Families are overwhelmed as they face a large stack of admission documents they may not have fully read or understood. Residents and family members then find they have agreed to terms that restrict their rights or impose liability on adult children. This would all be eliminated through the development of a standard agreement. Under the proposed law, facilities would also be required to inform residents they are not required to sign an arbitration agreement, although such agreements have become common in many assisted living contracts. 

The bill also addresses the issue of non-attorney Medicaid advisors, which I discussed in my previous blog “The Importance of Choosing the Right Medicaid Advisor.” Facilities would be required to advise residents in writing of the risks of using a non-attorney Medicaid advisor and that they have the right to hire an attorney. In recent years, some facilities have sought to prevent or discourage residents from hiring attorneys. Many facilities direct residents to these non-attorney services despite the fact that widespread abuse and consumer fraud has been reported. In addition, these entities often have a financial relationship with the facilities, resulting in a significant conflict of interest. The new bill will prohibit any non-attorneys from charging a fee for assisting with filing a Medicaid application.

This new legislation would represent a watershed moment for protecting long-term care residents. Seniors and their families should reach out to their state senators to support this legislation.