Nursing Homes Aggressively Pursue Family Members and Friends When Residents’ Bills Go Unpaid, Often Violating the Law

October 31, 2024 — Press Release

Report Demonstrates Improper Facility & Collection Practices; Consumer Advocates Propose Laws and Policies to Address Problem

WASHINGTON – Even though federal law prohibits nursing homes from requiring a third party to guarantee payment of their loved one’s bill, nursing homes still frequently pursue payment from friends and family. Nursing homes have been suing residents’ children, siblings, spouses, and friends for alleged debts for decades, but advocates report increased levels of aggression in recent years. A new report looks at what happens when nursing homes pursue family members and friends to collect nursing home charges, which typically run more than $108,000 per year. 

“When nursing homes attempt to hold residents’ family members and friends personally financially liable for residents’ unpaid bills they may be violating federal and state law,” said Anna Anderson, staff attorney at the National Consumer Law Center (NCLC) and co-author of the report. “Nursing homes’ aggressive debt collection practices can lead to serious financial consequences for caregivers and residents. Federal and state officials and courts must act to enforce existing law and adopt new policies to address ongoing problems.”

Nursing Home Debt Collection Practices Put Residents’ Family and Friends At Risk analyzes a survey, conducted by NCLC and Justice in Aging, of advocates in the consumer and aging fields about debt collection practices they have seen employed by nursing homes. 

The survey found that aggressive and unlawful nursing home debt collection actions against third parties impose a significant financial and emotional strain on residents’ family members, caregivers, and friends.

Highlights of the survey results:

• Nearly three-quarters of respondents (72%) said they have seen admission agreements that contain clauses stating that a third party could be financially liable for nursing home debt.
• The majority (54%) of respondents indicated that they had seen nursing homes file collection lawsuits against third parties. 
• Residents’ children and spouses are particularly at risk for these collection actions. The majority (56%) of respondents who have seen lawsuits filed against third parties to collect nursing home debt reported seeing lawsuits filed against the residents’ children, and nearly half (49%) saw lawsuits against the residents’ spouses.

“People frequently enter nursing homes in times of crisis, often immediately after a hospitalization, when they cannot return home and are being pressured by the hospital to leave,” said Eric Carlson, director of Long-Term Services and Supports Advocacy at Justice in Aging, and co-author of the report. “Federal and state policy makers need to take steps to prevent nursing homes from preying upon vulnerable family and friends.” 

To protect residents and their families and friends from predatory and abusive collection practice, NCLC and Justice in Aging make the following recommendations:

• Congress should amend the Nursing Home Reform Act (NHRA) to explicitly prohibit nursing homes from using admission agreements to impose financial liability on nursing home residents’ families and friends. 
• State legislators should repeal the state doctrine of necessaries and filial support laws that may impose personal liability for a resident’s nursing home debt on their spouse or children.
• State courts should adopt enhanced pleading and evidence rules before allowing default judgments in nursing home debt collection actions and train judges and clerks to identify illegal nursing home debt collection actions. 
• Federal and state enforcement agencies, such as the Centers for Medicare and Medicaid Services (CMS), Consumer Financial Protection Bureau (CFPB), and state Attorney General offices should pursue enforcement actions against nursing homes, debt buyers, and debt collectors that engage in unlawful or abusive collection practices and nursing home admission practices. They should also educate consumers so that residents, family members, and friends are more aware of potential problems and how to address them.

Related Resources

• National Center on Law & Elder Rights Tip Sheet: Nursing Home Debt Collection: Issues and Defense, July 31, 2024
• FAQs: Can a Nursing Home Force a Resident’s Family and Friends to Pay the Bill?, Sept. 7, 2023

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Justice in Aging is a national organization that uses the power of law to fight senior poverty by securing access to affordable health care, economic security, and the courts for older adults with limited resources.