The federal government has continued its efforts toward intensive scrutiny into the skilled nursing sector with a push against illegal nursing home debt collection practices.
The Consumer Financial Protection Bureau (CFPB) and the Centers for Medicare & Medicaid Services (CMS) issued a joint letter to operators and debt collectors, as a reminder that a nursing home can’t require families and loved ones to personally guarantee bill payments as a condition of admission.
If this does happen, the agencies said, the facility operator is in violation of the Nursing Home Reform Act.
“Some [admission] agreements purport to hold both residents and their caregivers personally liable for payment,” the entities said in the joint letter. “Others may assert that the caregiver, as a ‘responsible party,’ is personally liable for the resident’s unpaid bills if the resident’s Medicaid application is deemed inaccurate, untimely, or incomplete.”
This spotlight on debt collection practices in the sector is the latest in a continuation toward comprehensive nursing home reform, with the Biden administration’s initiatives unveiled in February.
The American Health Care Association (AHCA) supports efforts to stop inappropriate practices, but the organization told Skilled Nursing News that it hasn’t heard of any of its members doing this. AHCA doesn’t believe it’s a widespread practice, according to an emailed statement on the matter.
LeadingAge President and CEO Katie Smith Sloan agreed that there are no excuses for bad actors who resort to illegal methods to guarantee payment for care in nursing homes.
“As the Biden Administration continues its efforts to improve the safety and quality of care in our nation’s nursing homes, we support them shining a spotlight on inappropriate practices when they occur—and encourage them to look at the larger systemic problems that hurt all long-term care consumers,” Smith Sloan said in an emailed statement.
The admissions process is often “lengthy,” and while many nursing homes treat prospective residents and their loved ones with compassion and respect, there’s sometimes no real opportunity to review documents, according to the letter.
If debt collection conditions are in such documents, it’s unlikely to be caught just due to the sheer amount of paperwork upon intake, and how overwhelmed a resident or their loved ones may be.
That’s coupled with a limited choice in facilities, especially felt for those in rural areas of the country.
CFPB also released an “Issue Spotlight” on the matter, with feedback from caregivers that have been contacted from collection agencies regarding friends’ or family members’ alleged nursing home debts.
In one consumer complaint received by CFPB, a son had to sign for his father – who had dementia – in order for his father to be admitted to a nursing home. The complainant was sued for his dad’s nursing home bill, even with multiple insurances to cover costs; a settlement agreement was signed under duress, he said, because he was experiencing a threat of garnishment for the entire amount.
Another consumer said their mother’s nursing home sent their name to a collection agency as if the debt was accumulated by them.
In 2021, the annual median cost of a single room in a nursing home was $108,405, the report found. Between 2004 and 2020, that cost rose more than 60%.
As part of updated guidance published by CMS in June, the agency also prohibits nursing homes from requiring residents sign binding arbitration agreements as a condition of admission to a facility, or as a condition to continue to receive care.
Meanwhile, Congress is carving its own path toward SNF reform, most recently with a call for nursing home ownership disclosures.
Congresswoman Jan Schakowsky of Illinois and Congressman Mark Takano of California introduced the Linking Investors and Nursing Home Quality (LINHQ) Act in late July. The legislation would require nursing homes and parties with ownership interests to disclose ownership and financial information each year — down to the 5% ownership level.
Schakowsky told Skilled Nursing News the LINHQ Act is a “really good start” toward realizing Biden’s goal of digging into the SNF business model, and the role of private equity and real estate investment trusts (REITs) within that model.
Given that taxpayers are bearing the main costs of nursing home care, it is “absolutely appropriate” to look carefully into who is making money, who is investing in these facilities and how that relates to cost and care, Schakowsky said.
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