Families May Soon See Relief from Nursing Home Debt Collection

Advocate Andy

Consumer Bureau takes action to protect families of nursing home residents from illegal collection activity

The Consumer Financial Protection Bureau (CFPB) has joined forces with the Center for Medicare and Medicaid Services (CMS) to protect families of nursing home residents from illegal debt collection practices.

Specifically, the two regulatory bodies issued a letter clarifying that a nursing care facility may not require that a third-party caregiver personally guarantee payment of a nursing home resident’s bills as a condition of the resident’s admission to the facility.

In a statement, the CFPB said debt collectors acting on behalf of nursing homes have a responsibility to ensure they are complying with relevant consumer protection laws.

“Nursing homes that participate in Medicare and Medicaid are prohibited from forcing a resident’s family or friends to assume responsibility for the cost of care as a condition of admission or continued stay in the facility,” said CFPB Director Rohit Chopra. “Debt collectors must take steps to ensure they are not violating the law by collecting on invalid nursing home debts.”

The notice from CFPB and CMS referenced the protections provided in the Nursing Home Reform Act, including a clear prohibition against requiring third-parties to personally guarantee payment to a facility as a condition of a resident’s admission or continued stay in the facility. The two bodies noted that such contract terms are unenforceable. Debt collectors collecting on debts created as a result of these types of contracts may violate the Fair Debt Collection Practices Act (FDCPA). As such, these actions would follow under the enforcement authority of CFPB.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN
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