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Federal Agency Tries to Curb Unlawful Nursing Home Debt Collection Practices
The United States nursing home industry has long been under well-deserved scrutiny for providing substandard and neglectful care to its vulnerable population. (See for example: Greed, Understaffing, Lies, and the Nursing Home Industry) Now, the industry is being called out for more unscrupulous business tactics intended to further pad their bottom line.
According to news outlets, a new federal report has revealed that nursing homes and debt collectors are blatantly disregarding a law that prohibits them from burdening the friends and family members of nursing home residents with the cost of the facilities.
The Consumer Protection Bureau’s federal report, released in September 2022, describes the nursing home admissions process where “some nursing homes ask or require a person helping the resident gain admission to sign the admission contract as a ‘Responsible Party’ or ‘Representative.’ Based on these Responsible Party contract clauses, nursing homes request unpaid balances from third parties. The sums that nursing homes seek to collect range from a few thousand dollars to hundreds of thousands of dollars.”
The federal report described multiple victims of these “unenforceable contracts”, including one woman who was sent to collections for $80,000 two days after her mother’s death. Another woman received a letter from a law firm stating that she owed the nursing home $17,000 after her friend’s death.
AP News’s Fatima Hussein reports that the Consumer Protection Bureau has experienced an increase in complaints by family and friends of nursing home residents who have fallen victim to what it describes as “unlawful debt collection practices”. In response, the bureau sent a notice to nursing homes with a reminder to follow the law.
Hussein’s article reports that numerous friends and relatives of nursing home residents have been forced into bankruptcy, lost their wages, and lost their homes after signing unenforceable “Nursing Home Admission” contracts which held them liable for their loved ones’ nursing home expenses.
According to the article, consumer protection lawyer Anna Anderson has seen hundreds of collections lawsuits against the relatives of nursing home residents. She described the collections as a “routine, … deeply troubling practice” that “puts families in a position of having to choose between protecting their family members at nursing facilities or putting themselves in a position of financial ruin.”
The federal report described multiple victims, including one woman who was sent to collections for $80,000 two days after her mother’s death. Another woman received a letter from a law firm stating that she owed the nursing home $17,000 after her friend’s death.
According to the article, the director of the Consumer Protection Bureau held a virtual public hearing with affected individuals, during which one man pleaded through tears for bureau officials on the call to do something to stop creditors from hounding him and others for money that should not be legally owed. The Bureau stated that “collection of debts from those contracts may violate the consumer financial protection laws, including the Fair Debt Collection Practices Act” and its prohibition on false, deceptive, or misleading representations connected to debt collection.
The article states that according to the Nursing Home Reform Act, facilities are prohibited “from requiring a person other than the resident to assume personal responsibility for any cost of the resident’s care.”
Despite this statute, the article continues, unlawful debt collections by nursing homes continue to happen in part because of lax government enforcement, as “agencies in charge of oversight rarely cite and fine companies that require third parties to sign admission agreements.”
Nursing facilities pursuing unlawful debt collections in the face of the law is another example of the nursing home industry’s greed and lack of accountability. As demand for nursing home care continues to rise along with the growth of America’s elderly population, it is imperative that nursing homes are held accountable for not only the care they administer to patients, but also the financial burdens that they impose on patients’ families.
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