Nursing Home Admission Agreements: How Facilities Use Contracts to Shift Risk — Lessons from a Recent Iowa Case

Nursing homes are increasingly deploying carefully drafted written agreements to protect their financial and legal interests. These documents often go far beyond standard admission paperwork. Facilities include provisions designed to:

• Create or strengthen filial responsibility obligations, potentially making adult children personally liable for a parent’s unpaid care costs.
• Limit liability for care incidents, falls, neglect, or other adverse outcomes through arbitration clauses, damage caps, or waivers.
• Channel disputes away from courtrooms and into private arbitration, which is often more favorable to the facility.

A recent decision from the Iowa Supreme Court highlights both the power of these agreements and the growing uncertainty families face when challenging them.
In Cole v. Arbor Court Healthcare, LLC, a nursing home resident signed an arbitration agreement shortly before her death. Her husband sued the facility for negligence, gross negligence, wrongful death, and dependent adult abuse. The nursing home initially litigated the case aggressively for months, including participating in pre-trial discovery,  before attempting to compel arbitration.
Her husband opposed the motion, asserting that it was procedurally unconscionable and that the nursing home had waived its contractual right to arbitration. The district court granted the nursing home's motion for arbitration. The Iowa Supreme Court granted the husband's motion for an interlocutory appeal.
The Iowa Supreme Court ruled in favor of the husband on key points:

• The nursing home waived its contractual right to arbitrate by its conduct (continuing to litigate for seven months after the plaintiff refused arbitration).
• Iowa’s previous arbitration-specific waiver test (which required the opposing party to show prejudice) was preempted by the Federal Arbitration Act (FAA). The court followed the U.S. Supreme Court’s decision in Morgan v. Sundance, Inc. (2022), applying ordinary contract waiver principles instead of special rules that favored arbitration.

This case perfectly illustrates the preemption uncertainty now common in long-term care litigation. Iowa’s own state-law protections and procedural rules no longer apply in the same way when federal law (the FAA) governs. What families and their attorneys once relied upon under state law may be overridden, creating unpredictable outcomes depending on the specific facts, facility, and court.The Broader Trend: Facilities Protecting Themselves at Every Turn
Nursing homes routinely present families with multi-page admission packets containing:

• “Responsible party” or guarantor clauses that attempt to impose personal financial liability.
• Mandatory pre-dispute arbitration agreements.
• Releases or limitations on claims related to care quality.

While federal law (under the Nursing Home Reform Act) generally prohibits requiring third-party guarantees as a condition of admission, facilities continue to test the limits with cleverly worded language. When combined with arbitration clauses, these agreements can make it significantly harder for families to hold facilities accountable for substandard care.Bottom Line: Avoiding Institutional Care Is Still the Best Strategy
The increasing sophistication of nursing home admission agreements, coupled with federal preemption of state protections, creates real uncertainty for families. Even with favorable rulings like Cole, litigation is expensive, time-consuming, and unpredictable.
If it is medically and financially feasible, aging in place at home remains the safest and most controllable option.
Proactive elder law planning gives families far more protection and peace of mind than relying on nursing home contracts or hoping for a favorable court outcome after something goes wrong.Practical Steps for Families

• Never sign admission documents on the spot. Have them reviewed by an experienced attorney before signing.
• Explicitly cross out or reject any “responsible party” financial guarantee language and arbitration clauses when possible.
• Document all communications with the facility.
• Build a strong aging-in-place plan now: comprehensive advanced directives in trusts and powers of attorney, guardianship protections, home modifications when necessary, and family caregiving agreements.
• Consider long-term care insurance or hybrid policies as part of your overall strategy.
• Consider and re-evaluate Medicare choices to deploy, if possible, alternatives to institutional care.

We concentrate our practice on helping families avoid or minimize exposure to these institutional risks through thoughtful legal planning.
The regulatory and contractual reality of long-term care is increasingly complex and tilted toward the utilization and protection of institutional facilities. The best defense is preparation and planning to keep your loved one at home whenever possible.

Esther's Law Protects Ohio Seniors in Nursing and Rehabilitation Institutions by Permitting Cameras and Monitoring

Residents of Ohio’s nursing homes are permitted to place electronic monitoring devices in their rooms. “Esther’s Law” went into effect on March 23, 2022, after passing unanimously through the Ohio House and Senate and being signed by Governor Mike DeWine on December 22, 2021. This bipartisan legislation demonstrates that ridding Ohio is committed to reducing elder abuse generally, and particularly in institutions charged with caring for Ohio's vulnerable elderly residents. 

The genesis of Esther’s Law (Ohio Revised Code § 3721.60, et seq.), was a shocking video depicting the abuse of the bill’s namesake, Esther Piskor, at the hands of her nursing home care providers. Esther’s son Steve Piskor suspected his mother was the victim of abuse in an Ohio nursing home. In September 2011, Steve placed a hidden camera in his mother’s room which caught and documented six weeks of abuse. Nurses and aides threw Esther around the room, sprayed her in the face with unknown substances, and yelled at and neglected her. Mr. Piskor has since worked to ensure Elder Abuse will be driven out of Ohio’s nursing homes.

The law allows a nursing home resident, the resident’s guardian, or the resident's agent under a power of attorney, to authorize the installation of an electronic monitoring device in the resident's room under the following conditions: (1) the resident or the resident’s representative completes and submits a form to the facility, if the facility prescribes a form for the device and (2) the resident pays for the cost of the device and its upkeep. A resident may withdraw authorization at any time.

If the resident has a roommate, the consent of the other resident is required before any monitoring device may be installed. The roommate may consent based on certain conditions, such as agreed upon angling of the device, or limitations as to the use of the device. Devices must be installed and used in accordance with the consent of all residents residing in the room.

Nursing home operators and their staff should also be aware that the law requires reasonable attempts to accommodate residents to be made where a resident wishes to install an electronic monitoring device, but a roommate refuses to consent. Reasonable accommodation expressly includes moving the resident to another room where installation would be permitted if available.

The scope of Esther’s Law is currently limited to “long-term care” facilities defined as nursing homes and skilled nursing facilities and currently does not extend to assisted-living accommodations that do not meet the “long-term care facility” classification.  State legislators have indicated, however, that the scope of Esther’s Law may expand to other types of facilities in the near future.

Steve Piskor and the State Senators sponsoring Esther’s Law state that the goal of the law is to prevent abuse in the first instance, and not to be a reactive tool after abuse has occurred. This goal is made clear and is served by the law permitting long-term care facilities to place notices outside of the resident’s room to notify others that electronic monitoring is taking place.  In other words, the law is not intended to encourage secretive monitoring merely to encourage or facilitate litigation.

The law also prohibits any denial of admission, discharge, discrimination, or retaliation based on a resident’s decision to exercise the right to install an electronic monitoring device.  

Obviously, seniors and family members should seriously consider the use of such devices.  Keep in mind that even inexpensive and relatively unreliable devices will result in the placing of a notice that a device is electronic monitoring is taking place. Many home residents and merchants purchase signs advising that security systems and electronic surveillance exists, even where no such systems or devices are employed; deterrence is the first goal of any security or safety system or plan. 

Judge Can Not Impose an ‘Unusual’ Condition on a Reversal of a Default Judgment in a Nursing Home Breach of Contract Lawsuit

Nursing homes are proficient in protecting themselves from risk of loss where Medicaid is concerned.  Spouses and children of the Medicaid applicants often find themselves being sued to recover for delays in seeking and obtaining Medicaid.

Courts and the law are often sympathetic to the cause of the nursing home, particularly when admission agreements include provisions making family responsible.  In a recent case, the "sympathy" crossed a line towards activism on behalf of the institution.  Fortunately, on appeal, the ship of equity was righted.

George Brown entered a nursing home and signed an admission agreement, agreeing to apply for Medicaid benefits to pay for his care. Mr. Brown did not submit the necessary information to complete his Medicaid application, so his application was denied. The nursing home sued Mr. Brown and his wife, Gloria Brown, for breach of contract and her for lack of spousal support. Ms. Brown appeared at the initial hearing and argued that Mr. Brown had dementia and did not knowingly sign the agreement. In addition, she claimed he was mistreated at the nursing home.

The judge informed Ms. Brown that she needed to file an answer to the nursing home’s complaint. Ms. Brown never filed an answer, and the judge entered a default judgment against her. Six months later, Ms. Brown filed a request to remove the default judgment because she had been in the hospital and therefore unable to answer the Complaint. The judge granted her request to vacate the default judgment on the condition that she waive any claims against the nursing home to the extent the monetary recovery amount exceeded the amount Mr. Brown owed to the nursing home. The court, in effect, protected the nursing home from any risk of losing more than it was owed! Ms. Brown refused the condition and appealed.

The Massachusetts Appeals Court reversed, holding that the condition imposed by the judge was inappropriate.   Care One Management, LLC v. Brown (Mass. Ct. App., No. 19-P-1165, Oct. 7, 2020). Because the judge did not find that the nursing home suffered any prejudice from the default or the delays, there existed no authority for the court to , in essence, protect the nursing home. According to the court, although the judge made passing reference to Ms. Brown’s delay in fighting the default judgment, the judge “did not explain how or why such factors impacted [the nursing home’s] claim, and did not evaluate and explain whether and to what extent [the nursing home] suffered any prejudice, before imposing the unusual condition on the removal of the default judgment.”

The legal system worked to restore balance in this case.  The wife, though, has attendant cost and expense for which she will never be compensated.  This is just one unavoidable cost of institutional care, dutifully protected by the legal system.