WASHINGTON– Nursing homes and debt collectors are flouting a law that prohibits them from requiring friends and family of nursing home residents to pay for facility costs, according to a federal report released Thursday.
The Consumer Financial Protection Bureau says friends and family had to file for bankruptcy, have their wages garnished and their homes repossessed after signing unenforceable contracts called “admission agreements” with nursing care facilities . As a result, they are held responsible as a third party for the stays in nursing homes of their relatives.
Distraught relatives, in sometimes moving testimony, and family attorneys told regulators on Thursday that collectors were looking for tens of thousands of dollars — if not hundreds of thousands — in unpaid nursing home fees.
An increase in complaints led the agency and the Department of Health and Human Services’ Centers for Medicare and Medicaid Services to send a letter to nursing homes and their collectors reminding them to obey the law.
Consumer Affairs Director Rohit Chopra held a virtual public hearing with attorneys, nursing home administrators and people affected by what they say are illegal debt collection practices.
Anna Anderson, a consumer protection lawyer in New York, said she had seen hundreds of lawsuits filed against friends and family of care home residents seeking reimbursement for facility costs.
“It’s not just routine,” she says. “It is a deeply disturbing practice.”
She said it “puts families in a position where they have to choose between protecting their family members in nursing care facilities or putting themselves in financial ruin.”
Chris Ferris has opened up about how he received a recovery letter for thousands of dollars for his mother’s nursing home stay. Through tears, he pleaded with office officials on the call to do something to stop creditors from hounding him and others for money that shouldn’t be legally owed.
“I implore you to do something to stop them,” he said. “It’s wrong.”
The report describes a woman who was sent to collections for $80,000 two days after her mother died. Another woman received a letter from a law firm saying she owed the nursing home $17,000 after her friend died. The report did not identify the individuals by name.
The Consumer Affairs Office said in a statement that “the collection of debts from these contracts may violate consumer financial protection laws, including the Fair Debt Collection Practices Act” and its prohibition on misrepresentations, misleading or misleading related to debt collection.
The Centers for Disease Control and Prevention reports that 1.3 million people live in nursing homes.
As more people age in the United States, the cost of nursing home care increases with demand. The price has skyrocketed over the past 20 years. In 2021, the annual median cost of a single room in a nursing home was $108,405. Between 2004 and 2020, the cost has increased by more than 60%.
Most seniors are not insured against the costs of long-term care. Medicare, which covers adults once they turn 65, provides limited benefits based on need and only pays for nursing home care for up to 100 days. Medicaid helps low-income people pay for nursing home care, but eligibility rules can be strict.
The Nursing Home Reform Act prevents facilities “from requiring a person other than the resident to bear personal responsibility for any cost of the resident’s care.”
But why it seems to happen so often is partly due to lax government enforcement, said Eric Carlson, a lawyer at Justice in Aging. Carlson told the hearing that oversight agencies rarely cite and fine companies that force third parties to sign admittance agreements.
David Bifulco, a Pennsylvania attorney who represents debtors sued for hundreds of thousands of dollars, said the bureau and other agencies should inform federal and local courts about the prevalence of the problem, before a default judgment not be returned.
“It would go a long way,” he said.