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The Assisted Living Agreement: What Should Facilities Include?

Chris Murray
Posted on: July 24, 2019 by Chris Murray

Across the country, millions of seniors depend on the safe conditions and expert healthcare provided by assisted living facilities. These facilities have a duty to protect their residents, giving them the care they deserve. Most assisted living facilities require prospective residents to sign some form of admission agreement before entering the facility. As a part of risk management, including assisted living facility insurance, long-term care facilities use these agreements to spell out the terms and conditions of residence at the facility. Not all agreements are alike, and many facility managers may wonder at what comprises a good assisted living agreement. In this guide, we’ll explore some of the features of such agreements, helping the facility to protect its assets, its staff, and its residents while giving residents the details they need to make informed decisions about their needs.

The Assisted Living Agreement

Sometimes referred to as an assisted living facility contract, an admissions agreement, or a senior facility agreement, assisted living agreements provide prospective residents with a wealth of information about what the costs of care are, who is responsible for payment of fees, and terms of discharge, including many other aspects that can influence a person’s choice of care residence. In short, these agreements allow both facility and residents the ability to understand the types of care and services the facility will provide and at what costs; it also clearly indicates the terms and conditions that govern residence in the facility. In many cases, state laws governing the form and content of agreements must be adhered to. 

Agreements typically go into effect on the date of admission to the facility and remain in effect until they are amended or terminated by both parties. Some facilities offer annual agreements or contracts, with the option to renew after one year. It is critical that prospective residents review the terms and conditions of agreements before signing; it may be beneficial to have an attorney assist with the review. 

The Negotiated Risk Agreement

One area of confusion that crops up regarding assisted living facility agreements is that of a type of contract called a Negotiated Risk Agreement (NRA). It is important to understand that this is NOT an admissions agreement, but is sometimes used in conjunction with or as a replacement for an admissions agreement. Not all facilities use these agreements, but some 14 states in the U.S. have risk management provisions on the books, including NRAs.  

Negotiated risk agreements are initiated by the facility, and include provisions to manage the risks associated with providing residence and care to individuals. These agreements are enhanced by assisted living facility insurance as a comprehensive risk management strategy. It should be noted that NRAs are not viewed favorably by all parties. Opponents of these agreements believe they are used as a tool by facilities to avoid certain liabilities, especially when poor, negligent, or substandard care is provided to residents.  

Key Components of the Assisted Living Agreement

Assisted living agreements and admissions contracts differ by the facility, its services, and the state or municipal laws governing these risk-management tools. In general, however, an agreement should include several key components:

  • Services and service plans – the specific services or service tiers available to residents of a given facility and covered under the contract/agreement. This can include medical care, food, lodging accommodations, and many other aspects of the residence environment.
  • Information about the costs of covered services, including what is not covered. Some facilities offer tiered service plans with charges and costs for each of these tiers. Residents should be aware that lower tiers may not provide all the services they desire, and that costs for enhanced care will also increase.
  • Information about payment of all costs and fees, including who is responsible for payment and what happens if payment is late or discontinued. Many agreements include provisions for written notice and grace periods before initiating evictions; it is vital that residents and their family members understand these provisions before signing.
  • Specific rights, choices, and responsibilities of residents, including rules that must be followed to receive accommodations at the facility. Some of the factors covered in the agreement may have to do with privacy considerations, property safety, and living situations such as roommate assignments.
  • Details about filing complaints or grievances, including information about filing complaints with the state or municipal regulatory agencies responsible for overseeing assisted living facilities. 

Assisted living facility insurance is designed to protect the facility, its staff, and its residents from numerous liabilities and risks. As a risk management tool, this insurance is incredibly valuable. Assisted living agreements should be seen a tool to enhance protection — as a way to protect against a broad range of liabilities in addition to providing residents and facility staff with a clear understanding of the care, accommodations, and responsibilities of each party. 

About Caitlin Morgan

Caitlin Morgan specializes in insuring assisted living facilities and nursing homes and can assist you in providing insurance and risk management services for this niche market. Give us a call to learn more about our programs at 877.226.1027.

Posted in: Assisted Living Facility Insurance blog