Many nursing homes sue residents' families, friends for debt

"Pursuing unpaid bills, nursing homes across this industrial city have been routinely suing not only residents but their friends and family," Noam Levey reports for Kaiser Health News. "The practice has ensnared scores of children, grandchildren, neighbors, and others, many with nearly no financial ties to residents or legal responsibility for their debts "The lawsuits illuminate a dark corner of America’s larger medical debt crisis, which a KHN-NPR investigation found has touched more than half of all U.S. adults in the past five years."

According to a Kaiser Family Foundation poll conducted for this project, about one in seven adults with health-care debt said they've been threatened with lawsuit or arrest, and 5 percent said they've been sued for debt. "The nursing-home industry has quietly developed what consumer attorneys and patient advocates say is a pernicious strategy of pursuing family and friends of patients despite federal law that was enacted to protect them from debt collection," Levey reports. "Nursing homes have gone after some families for tens of thousands of dollars. In a few cases, debts surpassed $100,000."

Nursing homes often justify the lawsuits with the admissions paperwork that friends and family sometimes sign without realizing they could be pursued for debt. Many people settle rather than go through costly, time-consuming court battles. "In most cases reviewed by KHN, the people sued didn’t have an attorney, which can be expensive," Levey reports. "In nearly a third, the nursing homes won default judgments because the defendants never responded, a common phenomenon in debt cases. In many cases, lawsuits sought interest rates as high as 18% on top of the debt." Nursing homes and their attorneys say they have to go through the courts to get bills paid, and that it's unfair to other residents and county taxpayers to allow residents who have assets to not pay what they owe. 

By federal law, nursing homes are prohibited from "requiring a resident’s relatives or friends to financially guarantee the resident’s bills," Levey reports. "Facilities cannot even request such guarantees. But consumer advocates say nursing homes slip the admissions agreements into papers that family members sign when an older parent or sick friend is admitted. Sometimes people are told they must sign, a violation of federal law. Sometimes there is barely any discussion."