CFPB report on debt collection in nursing homes

On September 8, the CFPB published a Spotlight on the problem on Recovering Debt from Retirement Homes, which focuses on the risk of financial harm that retirement homes and their debt collectors cause by attempting to collect invalid debts. The report, by the Bureau’s Office of Financial Protection for Older Americans, analyzes consumer complaints, retirement home admission contracts and debt collection lawsuits to assess risks to retirement home residents. and their caregivers. In particular, the report found that many facilities include clauses in admission contracts that require caregivers to be a “responsible party” for the resident’s care costs, or otherwise subject the caregiver to financial liability if the admitted resident incurs a debt. The report also revealed that nursing home residents stay for significant periods of time, with the average stay for nursing home residents being 1 year and 4 months, and that most elderly people are uninsured against the costs of nursing homes. long-term care.

On the same day, the CFPB issued Circular 2022-05, which asks: “Debt collection and consumer reporting practices relating to disabled care home debts under the Home Reform Act of care [(NHRA)] violates the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA)? The circular explained, although the Bureau does not enforce the NHRA, that the NHRA prohibits a nursing facility from making a resident’s admission or continued stay conditional on receipt of a guarantee of payment. from a third party, such as a relative or friend. The circular also highlighted certain practices related to the collection of disabled nursing home debts under the NHRA and its regulations that also violate the FDCPA and FCRA. The Bureau also issued a joint letter with the Centers for Medicare & Medicaid Services to nursing care facilities and debt collectors reminding them of their responsibilities under the NHRA, FDCPA and FCRA.