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Contracted Services- Don’t Take Their Risk!

By Heather Brown
October 02, 2014

Facilities and homes, assisted living, personal care, residential care, adult foster or adult family have certain legal responsibilities for the residents in your care. This includes overseeing contracted service providers or third party providers such as home health care agencies, physicians, physical therapists and any other contracted service providers.

Most Admission Agreements state that as care providers we have a “Duty of Care”. “Duty of Care”, means it is the duty of every person having charge of another to act in the best interest of the other in his or her care. This “Duty of Care” is implied and expressed in most Admission Agreements that also includes the terms, services and conditions that are to be provided the resident.

Breach of “Duty of Care” occurs when the care provider fails to act in the residents best interest. Most laws in general require that the care provider perform their duties with a reasonable degree of care, diligence, skill, and good judgment on behalf of the resident.

When you notify a physician, home health agency or other third party contracted service provider of an observed problem or complaint of a resident and they error in diagnosing or care, followed by further complications to the resident, you are at risk of becoming part of a lawsuit. To help protect the facility a written statement that the Contracted Service Provider or Third Party Provider are considered independent contractors and are considered a separate business from the facility should be placed in as many places as possible (Admission Agreement, Service Provider Agreement, Resident handbook, etc.). In addition, the facility should be named as additional insured on the contracted service providers liability insurance and a copy maintained in your files evidencing this. Finally the Contracted Service Provider should sign a contract with you.

Take care to never represent the services of the Contracted Service provider or the Third Party Providers as if they are your own. If your brochure, website or other marketing material state “we have Physical Therapy, Nursing Services, Beauty Parlor, etc.”, you are implying that they are services of your facility. A safer way to state this would be “Physical Therapy, Nursing Services and a Beauty Parlor are provided in the facility by Contracted Service Providers or Third Party Providers, who visit the facility.

In addition it is recommended that Rules & Policies for Contract Service Providers be created and signed by the Contract Service Provider to help protect the resident and the facility from a Contract Service Provider failing to provide good services and assure their compliance with facility policies. The rules make the Contracted Service Provider responsible for meeting the residents and facilities necessary needs

Always allow the resident to choose their Contract Service Provider, as these are independent of the facility.

A sample copy of the following forms are provide to member-insureds by logging into the Member-Insured on the home page & clicking on other resources:

  • Contract Service Provider Rules and Policies
  • Contract Service Provider Agreement
  • Contract Service Provider Resident Care Plan

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