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Denial of Nursing Home Resident’s Medicaid Application Does Not Mean Son Breached Admission Contract

A New Jersey appeals court holds that a nursing home is not entitled to summary judgment in a breach-of-contract case against a resident’s son based solely on the fact that Medicaid denied the resident’s application due to excess resources. Meridian Nursing and Rehabilitation Inc. v. Skwara (N.J. Super. Ct., App. Div., No. A-5369-16T1, Jan. 18, 2019).

When Edward Skwara’s mother entered a nursing home, he signed the admission agreement as the “responsible party.” The agreement provided that Mr. Skwara would apply for Medicaid on his mother’s behalf and if she did not qualify, she would pay as a private-pay resident. Mr. Skwara applied for Medicaid on his mother’s behalf, but the state denied her application, finding that she had excess resources because she owned 75 percent of a limited liability company (LLC). Mr. Skwara did not appeal the decision.

After Mr. Skwara’s mother’s nursing home bill went unpaid, the nursing home sued Mr. Skwara for breach of contract. The trial court granted the nursing home summary judgment, holding that Mr. Skwara breached the contract by never appealing the Medicaid decision, filing another application, or paying for his mother’s care with her assets. Mr. Skwara argued that he couldn’t pay his mother’s bill with her assets because the LLC was insolvent.

The New Jersey Superior Court, Appellate Division, reverses, holding that summary judgment was not appropriate because more information is needed. The court rules that Mr. Skwara fulfilled his contractual obligation of applying for Medicaid on his mother’s behalf and he was “not liable for his mother’s cost of care based on the Medicaid determination alone.” The court determines that more information is needed about whether Mr. Skwara could have liquidated the LLC in order to pay for his mother’s care.

For the full text of this decision, go to: https://www.njcourts.gov/attorneys/assets/opinions/appellate/unpublished/a5369-16.pdf?c=P7O

To determine the best way for your family to provide care, consult with one of our elder law attorneys at Pearson Bollman Law.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at (515) 298-8850.

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