A Missouri court of appeals holds that a nursing home resident's guardian is not personally liable for the resident's unpaid bill, even though the guardian delayed in securing Medicaid coverage for the ward. Five Star Quality Care-MO, L.L.C. v. Lawson (Mo. Ct. App., W. Dist., No. WD 69712, April 7, 2009).
Bonnie Sue Lawson, a public administrator, was appointed guardian of Eloise Selby, a nursing home resident. Ms. Lawson signed an admission agreement with the nursing home that stated that Ms. Lawson would not be personally liable as long as she used due care. It also provided that if Ms. Selby's third-party eligibility coverage was denied "for any reason," Ms. Lawson would pay any unpaid charges "from the resident's assets."
Ms. Lawson applied for Medicaid benefits for Ms. Selby. The application was denied in November 2004 due to the cash value of some insurance policies Ms. Selby owned. Another application was denied in February 2005. In June 2005, Ms. Lawson applied for conservatorship of Ms. Selby, redeemed the policies, and reapplied for Medicaid. Medicaid benefits were approved.
The nursing home sued Ms. Lawson for the unpaid nursing home charges it incurred before Ms. Lawson was appointed conservator. The trial court ruled Ms. Lawson was liable because she failed to exercise due care by not acting on Ms. Selby's disqualification for benefits for several months. Ms. Lawson appealed.
The Missouri Court of Appeals, Western District, reverses, holding that Ms. Lawson is not personally liable. According to the court, the terms of the admission agreement limit recovery to Ms. Selby's assets if her Medicaid applications were denied "for any reason, including the presence of two life insurance policies that had not been redeemed due to Ms. Lawson's failure to promptly obtain a conservatorship."