Resident’s Representative Cooperated in Medicaid Eligibility Process Even Though Application Was Denied

An Ohio appeals court holds that a woman who signed a nursing home admission agreement as representative did not breach the admission agreement, even though the resident's Medicaid application was initially denied, because she fully cooperated in applying for Medicaid on the resident’s behalf. HCF of Findlay, Inc. v. Bishop (Ohio Ct. App., 3rdDist., No. 5-18-20, Feb. 4, 2019).

Nancy Bishop signed a nursing home admission contract as Anna Weber's "representative." The contract stated that if the representative failed to "cooperate" in the Medicaid eligibility process, she would be personally responsible for any unpaid charges. Ms. Bishop applied for Medicaid on behalf of Ms. Weber, but the application was denied. After the initial denial, Ms. Bishop established a qualified income trust (QIT) for Ms. Weber in order to reduce her income so she could qualify for Medicaid.

After Ms. Weber died with unpaid charges, the nursing home sued Ms. Bishop for breach of contract. The nursing home argued that she did not cooperate with the Medicaid application process because she did not establish a QIT until after Ms. Weber's Medicaid application had been denied. The trial court granted summary judgment to Ms. Bishop, and the nursing home appealed.

The Ohio Court of Appeals affirms, holding that Ms. Bishop did not breach the contract. The court finds that Ms. Bishop fully cooperated in the Medicaid eligibility process by filing the application and establishing the QIT. The court notes that the contract does not define "'cooperate' as ensuring that the initial application be approved in the Medicaid eligibility process." The court cautions the nursing home's "zealous pursuit of damages in breach-of-contract actions where it has broadly drafted its contract by including such terms as 'cooperating,' while minimizing a relatively narrow window-of-time concerning government-benefit determinations."

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