Caregivers can’t be pursued over friends or family members’ debts from nursing home facilities.
A report by Consumer Financial Protection Bureau gives examples of how this illegal debt collection affects consumers:
The nursing home sent my name to the collection agency as if this was a debt accumulated by me. Now the debt collector is jeopardizing my credit with my mother's bill which was suppose[d] to be taken care of by Medicaid and Medicare. The statement from the debt collection company is in my name, with my address.
My client had a power of attorney for her friend, a low-income senior with no close relatives. My client met with the nursing home staff and they told her they would be receiving her friend's Social Security benefits directly to cover what Medicaid didn’t. They never sent her a bill. Six months after her friend died, my client received a letter from a local law firm, stating that she owed the nursing home $17,000. My client ignored the letter thinking it was a scam.
The law firm served my client with a lawsuit for over $21,000, alleging she breached the responsible party clause of the admission agreement by not paying her friend’s bills. They also alleged that my client fraudulently conveyed her friend’s assets to herself [even though] her friend didn’t have any assets to convey.
My client missed her deadline to respond to the lawsuit because she couldn’t afford an attorney to help her and almost ended up with a default judgment against her for $21,000. As a legal aid attorney, I was able to step in quickly and file a motion to dismiss, resulting in the entire case being thrown out.
“Nursing homes that participate in Medicare and Medicaid are prohibited from forcing a resident’s family or friends to assume responsibility for the cost of care as a condition of admission or continued stay in the facility,” said Rohit Chopra, director of the bureau. “Debt collectors must take steps to ensure they are not violating the law by collecting on invalid nursing home debts.”
Based on the findings in the report, the bureau and the Centers for Medicare & Medicaid Services have issued a joint letter to remind nursing care facilities that they can’t require a third-party caregiver personally guarantee payment of a nursing home resident’s bills as a condition of the resident’s admission to the facility.
Such actions violate the Nursing Home Reform Act and attempts to collect debts from caregivers may violate the Fair Debt Collection Practices Act and Fair Credit Reporting Act.