Feds try to stop unlawful nursing home debt collection

Family, friends being held liable for loved ones’ stays at facilities.

WASHINGTON — Nursing homes and debt collectors are flouting a law that prohibits them from requiring friends and family of care home residents to shoulder the costs of the facilities, according to a federal report issued Thursday.

The Consu mer F inancial Protection Bureau said friends and family members have had to declare bankruptcy, had their wages garnished and their homes repossessed after signing unenforceable contracts called “admission agreements” with nursing facili- ties, resulting in them being held liable as third parties for their loved ones’ nurs- ing home stays.

The report described one woman who was sent to col- lections 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. The report did not identify the individuals by name.

An increase in complaints prompted the CFPB and the Department of Health and

Human Services’ Centers for Medicare and Medicaid Services to send a joint let- ter to nursing homes and their debt collectors Thurs- day reminding them to follow the law.

The consumer bureau said in a statement that “collectionof 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 Centers for Disease Control and Prevention reports 1.3 million people live in nursing homes.

As more Americans age, the cost of nursing home care is growing along with demand.

The price has exploded in the last 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 rose by more than 60%.

Most older adults are not insured against the costs of long-term care. Medicare, which covers adults once they reach 65, offers 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 stringent.

An Obama-era regulation under the Nursing Home Reform Act prevents facilities “from requiring a person other than the resident toassume personal responsibility for any cost of the resident’s care.”

Rohit Chopra, director of the CFPB, held a virtual public hearing Thursday with lawmakers, advocates, nursing homes and others on unlawful debt collection practices.

Deborah Royster, assistant director of the Office of Older Americans, said “the financial consequences of illegal debt collections can be devastating for consumers” and that federal officials are trying to raise awareness.

She said the debt issue is pervasive at both nonprofit and for-profit nursing facilities.