Cona Elder Law


Protecting Residents: Should Nursing Homes Bring Guardianship Proceedings?


July 29, 2015

By Jennifer B. Cona

A number of nursing home residents do not have family members or appointed agents under advance directives to provide basic assistance with personal needs and/or financial decisions.  Is it appropriate in those cases for the healthcare facility to bring a guardianship proceeding on behalf of the resident to ensure those needs are met?  Is it appropriate if payment to the healthcare facility is one of the financial needs to be addressed?  In this growing debate, vociferous opinions can be heard from the bench, the press and now the legislature as well. But what would happen if healthcare facilities declined to bring guardianship proceedings when warranted on behalf of a resident? 

Statutory Authority to Commence a Guardianship Proceeding

Since Article 81 of the Mental Hygiene Law (“MHL”) became effective in 1993, healthcare facilities have been authorized to commence guardianship proceedings concerning residents.[i] The statute was amended in 2004 to provide that “the chief executive officer, or the designee of the chief executive officer, of a facility in which the person alleged to be incapacitated is a patient or resident” may commence a guardianship proceeding by filing a Petition with the Court.[ii]   Further, the chief executive officer of any facility in which an Alleged Incapacitated Person (“AIP”) resides must not only be provided with notice of any guardianship proceeding commenced with respect to a resident, but must also be provided with copies of the Guardian’s initial and annual reports.[iii]    

In order to appoint a Guardian, the Court must find that the appointment is necessary to provide for the personal and/or property management needs of the AIP and that either the AIP consents to the appointment or the AIP is incapacitated.[iv]   A finding of incapacity is two-fold in that the AIP is likely to suffer harm because: (1) the person is unable to provide for personal needs and/or property management; and (2) the person cannot adequately understand and appreciate the nature and consequences of such inability.[v]  In determining whether an AIP is “incapacitated,” MHL Article 81 requires that the Court primarily consider the AIP’s functional level and functional limitations, including the AIP’s ability to perform activities of daily living, the AIP’s actual needs, and the AIP’s physical illnesses and mental disabilities.[vi] 

Guardianship Proceedings and Medicaid Benefits

It is often the case that a nursing home resident with no family or agent appointed under a Power of Attorney has neither a payment source nor the ability to tackle the arduous task of applying for Medicaid benefits.  Such residents are then subject to civil litigation for collection of the balance due or discharge from the healthcare facility for failure to pay.[vii]  Neither is a good solution for an elderly or disabled person who needs nursing home care, nor is it reasonable for health care facilities to provide care and services for which they are not paid. 

Since the Mental Hygiene Law became effective, guardianship proceedings have successfully been commenced by healthcare facilities for the purpose of securing medical insurance and government benefits such as Medicaid on behalf of patients and residents.  In one such case, a hospital commenced a guardianship proceeding to secure Medicaid benefits for an AIP who had accrued a large balance due.  The Court appointed a Guardian for the AIP and revoked the AIP’s Power of Attorney because the agent thereunder refused to cooperate with securing Medicaid benefits for the patient.[viii]  In another case, the Court appointed a Special Guardian to sell the AIP’s co-op apartment so that the AIP could become eligible for institutional Medicaid benefits and continue residing in the nursing home.   In appointing the Special Guardian, the Court recognized that it was necessary because the AIP would otherwise suffer harm as she would be unable to continue residing in the nursing home without the provision of Medicaid benefits.[ix]  Similarly, in a Bronx County case, the Court found that the AIP could not pay for the nursing home care he required without securing Medicaid benefits, and that the AIP was unable to complete his Medicaid application on his own, thereby necessitating the appointment of a Guardian.[x]  In addition, in an informal opinion, the Attorney General recognized that it is necessary for nursing homes to address the financial needs of often incapacitated residents and specifically pointed to MHL Article 81 as a means for a nursing home to address an incapacitated resident’s financial needs, including remitting income to the nursing home.[xi]

However, some Courts have begun to take issue with guardianship proceedings brought by healthcare facilities in general.  In those cases, because the healthcare facility was owed payment for care and services rendered to the resident, the guardianship petition was deemed “inappropriate”.  Two such decisions were reported wherein the Court, in dismissing the Petition, stated: “[t]he purpose for which this guardianship proceeding was brought, to wit, for the nursing home to be paid for its care of the person, was not the Legislature’s intended purpose when Article 81 of the Mental Hygiene Law was enacted in 1993.”[xii]  The Court further stated that “[t]o the extent that the nursing home is seeking to be paid for the care it has rendered to the person, the petitioner must seek a different avenue of redress for that relief as a guardianship application is inappropriate.”[xiii]

There is presently no statutory or case law precedent prohibiting a guardianship proceeding from being commenced to resolve an outstanding debt, including payment to a healthcare facility.  However, on March 25, 2015, legislation was introduced in the New York Assembly to preclude guardianship proceedings from being used solely for the purpose of collecting outstanding debts.  Specifically, Assembly Bill 6510 proposes an amendment to Mental Hygiene Law §81.06(7), adding that the Chief Executive Officer of a healthcare facility can commence a guardianship proceeding except where the petition is brought primarily for purposes of bill collection or resolving a bill collection dispute.  

While some petitions for guardianship are brought solely for personal needs management, the majority of cases seeking the appointment of a guardian involve an AIP who needs assistance with both personal needs and financial management. This is especially true since the passage of the Family Health Care Decisions Act.[xiv]  Financial management needs often include payment of bills such as medical bills, including bills for services rendered at the nursing home.  Further, financial management for nursing home residents often includes applications for Medicaid benefits.  A resident with no family or agent under a Power of Attorney has little to no chance of completing a Medicaid Application with a five-year history of all bank records and financial statements, an accounting of all transfers from or between accounts, copies of all checks over $2,000, and the myriad of personal documents required, such as original birth certificates, marriage or death certificates for spouses, proof of Social Security and pension income, etc.  Most nursing home residents need 24/7 care and have no way of traveling bank to bank to gather this information. Is it the Court and Legislature’s intention that incapacitated residents who have no family and no advance directives are ineligible to have a guardian appointed to help with bill paying or applications for needed governmental benefits solely because those residents have an open balance due to the nursing home? Clearly, this is a preposterous result.

One solution is available under Article 81 of the Mental Hygiene Law which allows for a Special Guardian to be appointed for a limited purpose or specific transaction.  If a resident is found to be incapacitated, the Court “may authorize, direct, or ratify any transaction or series of transactions necessary to achieve any security, service, or care arrangement meeting the foreseeable needs of the incapacitated person ….”[xv]  This provision has been used for such limited issues and transactions as securing Medicaid benefits on behalf of a nursing home resident, after which the Special Guardian is discharged.  However, as a practical matter and although authorized by Article 81 of the Mental Hygiene Law, the Courts have lately disfavored such limited appointments because the Incapacitated Person (“IP”) with no family or appointed agents generally has needs greater than the single transaction. 

What alternatives does a healthcare facility have then, if it is “inappropriate” to have a guardian appointed to assist a resident?   The facility can bring a civil lawsuit to collect a balance due.  Of course, this does nothing to address the issue of health care costs going forward for a resident who continues to reside in the facility, nor does a civil lawsuit assist in securing medical insurance (i.e. Medicaid benefits) for the resident.  Further, in the event the resident lacks decision-making capacity, a Guardian ad Litem (“GAL”) will be appointed for the resident in the civil litigation.[xvi]    However, the GAL’s role is limited to protecting the defendant’s rights in that litigation only and a GAL is generally not empowered to consent to a proposed settlement.[xvii]  In fact, it is well-settled that only a Guardian appointed under MHL Article 81 may apply to the court for approval of a proposed settlement.[xviii]  Furthermore, case law indicates that in the event a defendant requires management of his or her personal and property needs, the Court in a civil lawsuit may refuse to appoint a GAL in lieu of a Guardian under Article 81 of the Mental Hygiene Law.[xix]

The only other alternative is for the healthcare facility to involuntarily discharge the resident.  A resident may be involuntarily discharged from a nursing home when “the resident has failed, after reasonable and appropriate notice, to pay for (or to have paid under Medicare, Medicaid or third-party insurance) a stay at the facility.”[xx] But where will that resident go? Presumably, the resident can’t go home due to the need for 24/7 institutional-level care.  But what other healthcare facility will accept such a resident for admission where that resident has no insurance or payment source?

Is this really more “appropriate”? Do we, as a society, prefer to start lawsuits against possibly incapacitated persons or worse, discharge nursing home residents, effectively cutting off their care, instead of appointing a Guardian under the Mental Hygiene Law because one of the needs to be addressed is payment for care?  We need to take a hard look at how we are assisting and caring for our elderly and incapacitated nursing home residents.

Jennifer B. Cona, Esq. is the managing partner of the Elder Law firm Cona Elder Law PLLC, where she heads up the firm’s Health Care Facility Reimbursement and Recovery department.  Ms. Cona wishes to thank Adam Kahn, Esq. for his assistance with this article.  Ms. Cona can be reached at 631.390.5000 or


[i] Mental Hygiene Law (“MHL”) §81.06(7).

[ii] MHL §81.06.

[iii] MHL §81.07(g)(1)(vi), 30(h), & 31(c).

[iv] MHL §81.02(a). 

[v] MHL §81.02(b).

[vi] MHL §81.02(c).

[vii] 10 N.Y.C.R.R. §415.3(h)(1)(i)(b).

[viii] In re Rochester Gen. Hosp., 158 Misc.2d 522 (Sup. Ct., Monroe Co. 1993).

[ix] In re Wingate, 169 Misc.2d 701 (Sup. Ct., Queens Co. 1996).

[x] Matter of J.T., 42 Misc.3d 1202(A) (Sup. Ct., Bronx Co. 2013).

[xi] Atty. Gen. Inf. Opn. 1038 (1997).

[xii] Matter of G. S., 17 Misc.3d 303 (Sup. Ct., N.Y. Co. 2007); Matter of S.K., 13 Misc.3d 1045 (Sup. Ct., Bronx Co. 2006).

[xiii] Matter of S.K., 13 Misc.3d 1045 (Sup. Ct., Bronx Co. 2006).

[xiv] New York Public Health Law Article 29-CC (2010).

[xv] MHL §81.16(b).

[xvi] CPLR §1201. 

[xvii] 1234 Broadway, LLC, v. Feng Chai Lin, 25 Misc.3d 476 (Civ. Ct., N.Y. Co. 2009).

[xviii] Matter of Sills, 32 A.D.3d 1157 (4th Dept. 2006).

[xix] Matter of Lainez, 11 Misc.3d 1092A (Sup. Ct., Kings Co. 2006).

[xx] 10 N.Y.C.R.R. §415.3(h)(1)(i)(b).

About the Author Cona Elder Law

Cona Elder Law is a full service law firm based in Melville, LI. Our firm concentrates in the areas of elder law, estate planning, estate administration and litigation, special needs planning and health care facility representation. We are proud to have been recognized for our innovative strategies, creative techniques and unparalleled negotiating skills unendingly driven toward our paramount objective - satisfying the needs of our clients.

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