Beware Of Illegal Debt Collection Practices

Many families will face the reality that at some point an aging loved one must go to a nursing home, also called “rehab”. These homes provide things assisted living homes are not licensed to give; namely skilled care. For example, an aging parent has surgery and needs therapy during the recovery period. They are sent from the hospital to a nursing home where therapy is offered. Or a loved one has a stroke and after the hospitalization they go to a nursing home for physical, occupational and speech therapy. Sometimes they cannot go home afterwards. Here at AgingParents.com we see this issue on a recurring basis. No one planned that Mom or Dad would have to end up long term in a nursing home and they can’t afford the cost after Medicare payments run out.

When care is complicated and the aging parent is not able to regain enough independence to manage at home, the nursing home may become their residence. And an expensive residence it is indeed. Who pays the bills when Medicare, always with a maximum limit of days allowed, runs out? The elders themselves or their families do.

The cost of a long term nursing home stay, beyond the allowable maximum under Medicare of 100 days, is shocking to most. According to the Consumer Financial Protection Bureau (CFPB), citing the annual Genworth cost of care study, and adjusting for inflation, in 2021, the annual median cost of a single room in a nursing home was $108,405.

The CFPB analyzed the risks to family caregivers and friends who enter into contracts for a loved one’s admission to a nursing home. Although it is illegal, some nursing homes continue the practice of making admission of the aging loved one dependent on the caregiver or other signing a contract making the caregiver the “responsible party”. There the family or caregiver is, with the immediate need of placing the loved one into the home, and they feel forced to sign whatever it takes to get them admitted for care.

Illegal Debt Collection Tactics

The worst of this is that based on these illegally gotten signatures on admission contracts, the nursing home then goes after the signer to collect the debt for payment after the elder’s Medicare runs out or the elder’s own funds are depleted. Some residents have run of out funds and have applied for Medicaid but processing those applications can take months in some states. Meanwhile, the debt mounts for essential care. Some particularly egregious nursing homes send the bills to collection agencies, report the unpaid debts to credit reporting agencies and even file lawsuits against the unwitting signatories on those coerced admission contracts. For the unsuspecting caregivers, families and friends, there is often no indication that the nursing home’s initial contract they signed, as well as their debt collection practices are completely illegal under Federal law.

Takeaways:

1. If your loved one must go to a nursing home or “rehab facility”, never sign anything that indicates you are the legal representative or responsible party. Do not submit to pressure tactics if someone wants to force you to sign such a contract.
2. If you encounter trouble with admission of an aging parent or other loved one into a nursing home, when someone wants you to sign as a “responsible party” say that you know such tactics are illegal under the Federal Nursing Home Reform Act. You can download and print the CPFB’s joint letter, in which the Centers for Medicare and Medicaid Services participated, letting them know in writing that their practices are illegal in such a contract. Hand them a copy.
3. Do your research before your loved one must go to such a home for any reason. You may not have much notice, but ask to see their admission contract ahead of time. If you see these bad clauses in it about a signatory’s requirement to be responsible for the resident’s bills, look elsewhere for a facility. If you are under time pressure because the hospital is releasing your aging parent fast, get help from any family member or friend you can to do the search. Medicare’s Nursing Home Compare is a start, but definitely not a totally reliable source of information. The data in it is self-reported by the nursing home.
4. Finally, seek the advice of an elder law attorney for any nursing home or other care contract you do not totally understand. As described here, these contracts can be full of pitfalls and the unsuspecting can be caught up in an illegally created trap. A competent lawyer can help you through the decision-making process.