Families Are Illegally Getting Sued For Nursing Home Bills

https://www.marketwatch.com/story/the-hell-th ... 9?siteid=yhoof2

‘The hell that they put me through’: Nursing homes suing caregivers for debts they don’t owe, regulator says
Last Updated: Sept. 10, 2022 at 2:15 p.m. ETFirst Published: Sept. 9, 2022 at 10:01 a.m. ET
By
Eleanor Laise

Illegal contract provisions can lead to garnished wages, foreclosure for residents’ families

Nursing homes and debt collectors are billing and suing long-term-care residents’ family members and friends, demanding payments for debts these individuals don’t legally owe, consumer attorneys and federal regulators are claiming.
Some nursing-home admission agreements include provisions that attempt to make caregivers or other third parties personally liable for payments for the resident’s care, the Consumer Financial Protection Bureau said in a new report examining facilities’ debt collection practices. Under federal law, nursing homes participating in Medicare and Medicaid can’t make such provisions a condition of admission or continued stay in the facility. Yet some nursing homes hire debt collectors to collect residents’ unpaid bills–which can range into the hundreds of thousands of dollars–from third parties based on these invalid provisions, regulators said.
The family members and friends subjected to these actions are often unaware of the law and don’t have the resources to respond to litigation, resulting in judgments against them. Some caregivers targeted for payments for a loved one’s care have had their wages garnished and even lost their homes, the CFPB said.
When debt collectors attempt to collect invalid debts and give information on those debts to credit bureaus, they may violate federal debt-collection and credit-reporting laws, the CFPB and Centers for Medicare and Medicaid Services warned in a joint letter to nursing homes and debt collectors Thursday.
Medical debt “is a very big pain point across the board, and we are especially worried that medical debt on credit reports is often inaccurate,” CFPB director Rohit Chopra told MarketWatch in an interview Thursday. Speaking of the large numbers of nursing-home residents who died during the pandemic, he said, now their caregivers in some cases may be “subject to potentially illegal debt collection.”
After age 65, more than a quarter of adults will need nursing-home care at some point, according to federal estimates. The median annual cost of a private room in a nursing home was over $100,000 in 2021, according to Genworth Financial GNW, +1.74%, which provides long-term care insurance. Most adults don’t have long-term care insurance, and Medicare provides only limited coverage of nursing home care. For lower-income residents who exhaust their resources, Medicaid can pay for nursing home care, but the application process is often lengthy. Gaps in the various types of coverage can result in massive bills.
A person who has legal access to the resident’s income or resources, such as through a financial power of attorney, may be asked to sign an agreement to provide payments to the facility from those resident resources, said Toby Edelman, senior policy attorney at the nonprofit Center for Medicare Advocacy. But outside of such scenarios, she said, clauses purporting to hold third parties liable “are not enforceable provisions.”
Responding to the CFPB report, nursing home industry trade group American Health Care Association/National Center for Assisted Living said, “we haven’t heard of our members doing this and we do not believe it’s a widespread practice; however, we support efforts to stop inappropriate practices.” Scott Purcell, CEO of debt-collection industry group ACA International, said in a statement that the group’s members “have strong compliance management systems that take into account contractual and legal obligations when working with reputable creditors.” The group is unaware of a pattern of abuse in nursing home debt collection practices, he said.
Several individuals speaking at a virtual CFPB hearing on Thursday described being swept up in long, arduous legal battles over debts they didn’t owe. Chris Ferris said a nursing home had pursued him for his mother’s debt “even though I wasn’t involved and never had access to her money.” Breaking down in tears, he said, “the hell that they put me through, I will never see justice for.”
Most of the nursing-home lawsuits against third parties reviewed by the CFPB involved claims that the resident’s money had been intentionally misused, hidden or stolen–often using boilerplate language and without any details supporting the claims, the Bureau said in its report. That raises the possibility that the allegations may have no justification and may be “a technique of coercion,” the Bureau said.
"So much more thorough and easier to manipulate than the 'plan' created for me by my advisor. When something changes in my life or my thinking, bingo! I just change assumptions and make sure I still live longer than my money!" – Eric, 56
In some cases, nursing homes and debt collectors “fabricate claims of fraudulent conveyance,” or transferring money to avoid debt, New York attorney Emma Caterine said at a CFPB hearing Thursday. “The debt collection law firms and nursing homes we have witnessed have engaged in a widespread and systemic deceptive debt collection scheme to squeeze money out of hundreds of consumers who do not owe it.”
The CFPB report did not address another legal issue that can sometimes snare families in nursing-home debt: More than half of states have “filial responsibility” laws, which can be used to hold adult children liable for their parents’ unpaid medical bills. Typically, these laws don’t let a third party, such as a nursing home, sue for the unpaid debt — but an adult child providing care for a parent, for example, could sue siblings for contributions to the cost of care, said Katherine Pearson, law professor at Penn State Dickinson Law.
Pennsylvania, however, is one state that does allow care providers to bring filial-support cases against adult children or parents, Pearson said. And in 2019, the Pennsylvania Supreme Court ruled that the state’s filial-support law applied to a residential care facility’s claim against out-of-state parents for care provided in Pennsylvania to their adult son.

This is good to know, I will be sharing with family and friends. If you find any follow-up, please post as well. Thanks!

Sent this to my mom for reasons-thank you for this BigA

Don't co-sign contracts, unless you are willing and able to pay them off.  Full stop.

In most cases that would be true but that might not be possible in this situation, especially if the person has Alzheimer's or is mentally incapacitated for some reason.

I'm an RN case manager for an independent review organization. If you are ever denied anything, be it through Medicare, Medicaid, or your insurance company, appeal it. And keep appealing it until every single appeal is exhausted. This is especially true if you are in the hospital as an in-patient for more than 3 midnights, are discharged to a nursing home, and then (sometimes 6 months later) receive a letter telling you that your case had been reviewed, you were incorrectly classified as an in-patient while in the hospital, and your stay at the nursing home is not going to be covered. Appeal, appeal, appeal. It costs you absolutely nothing to appeal, and while it may take time, and it may appear that you are going to lose, you may find that you win your appeal at the very end. In fact, if you are in the hospital, ask to speak to the case manager for the floor and ask "Does my hospitalization qualify under InterQual or Milliman as inpaient status?" You can be in the hospital but NOT be classified as an inpatient, and it can cost you big time if you get sent to a nursing home or rehab facility. Make sure you read at EVERY PIECE OF PAPER YOU SIGN. Hospitals are required to notify you if you are being admitted under OBSERVATION STATUS--this is IMPORTANT when it comes to your finances and what you are responsible for.

Thank you for your helpful suggestions on avoiding illegitimate hospital and caregiver charges. The appeal process can be slow and burdened with intimidating obstacles, but perseverance can help overcome these and produce favorable outcomes. I know because I fought mine through the California DOI and won my appeal (after 6 months). You can also submit a complaint on-line at CMS.gov if you are a Medicare victim of dishonest charges.

heavy sigh .... The CFPB report does not discuss co-signers since their obligations to a contract are usually obvious. The Bureau's concern is entrapment of caring proxies who are badly needed by patients unable to manage their own paperwork.

I will confirm from personal experience the overdue need for regulator claws to sink into some skilled nursing facility (SNF) administrators' ankles. I also go further than the Bureau's report to declare that the primary mission of the modern hedge fund empire SNF is to attach a fire hose to any government benefits, bank accounts, bonds, property, or other assets not already spoken for by the hospital bills and credit cards. If you want to test my theory, just comb their contracts like I did, slowly.

Some come right out and spend pages making you list available assets, functioning as a pre-emptive debtor's exam. It's ugly and sickening, but more honest. You'll be liquidating the house and jewels anyway, they figure. Saves a lot of work for the Accounts Receivable lady's attorney later. (For some reason AR is always a woman. There isn't a man to be found on staff except maybe the owner's suite and/or the occasionally used doctor's office.) I've also slogged through self-contradictory language as the report mentioned, making me as attorney-in-fact both personally liable for and also untethered to incurred debt, maybe at the same time, maybe according to mood.

After a week of nagging from one place post-admission, I sat some ninety minutes with some sub-executive and refused to sign their contract until the way they read several clauses was explained to me and markup was done to cement our understanding. This was another one with murky and misleading "Responsible Party" provisions. It also went on a half page about compliance with a US Code title which was long defunct. It took short educated guessing which Title was meant, which the lady tried to shrug off, missing my point that I'm being asked on paper to agree to nonsense. Meanwhile the actual intended law may go unenforced.

In her defense, Office Lady said only that she was executing the agreement "the way she was trained". The prints we had suffered generation loss and goopy artifacts from copies of copies. I may have suggested that I'm the first person in a decade to have actually read the stupid thing front to back.

Thus far I've only pledged what's fair as the report notes, that the SNF will be paid from the patient's assets and that I will do my best to satisfy whatever balance. The wrinkle of flimsy proxy "malfeasance" claims was unknown to me, but I should have guessed such would arise and gain popularity. The SNF owners should not need the CFPB and CMS to explain the rules. I expect they know there is no stated wiggle room for collecting from the unobligated. The next logical recourse is to borrow tactics from the phantom payday loan creeps: Crank up the shame and fearmongering with the help of vaporous criminal charges. On thy knees, elder abuser!

If the industry lobby and ACAI don't see a problem here, I submit that it's because the average exploited family and friends of impoverished SNF residents were too wrung out and bewildered to complain properly. That and because ACAI lawyers would deny the Sun sets in the west if that supported their briefs. That dirty dodge of threatening an unsafe discharge evidently works well, distracting caring people from learning and defending their rights. Hmm, there's another familiar junk debt tactic mirrored. Guuuuuh, bad thing happen when you no pay what not your bill, HURRRGH!

We don't have the extra hour it will take me to critique the industry and describe how the human kennels posing as rehab housing have not actually earned their twelve grand a month. I just find it curious how lopsided their contracts are, really adhesion contracts which don't hold the SNF to any standard of humane care to justify their voracious funding demands. Their patrons are prisoners to circumstance, soft targets who can't easily quit and change providers. Who then is the likely elder abuser, the system gamer?

Now that I think of it Res, what you just said sounds A LOT like what my apt was going to do (the asset deal).

You lost me there. Someone wanted you to disclose where to find your riches?

pretty much! the apt has renter's assist or whatever it's called

If I'm not mistaken, that would be a power-of-attorney situation, that doesn't obligate the signer to any *personal* responsibility for the debt.

Co-signing is a different situation, and a loved-one *might not realize* that they are signing a (unenforceable, according to the article) contract obligating them to pay for service, rather than the debt-holder going after the estate of the deceased.

I use co-signing in a generic sense.

When you use words in the "generic sense" you don't convey the message you want to convey.  In this case you meant POA and instead used co-signers which is completely different.