(Photo Illustration - MetroCreativeConnection - Legal-Ease - Gerald W. Townsend)

In days gone by, it was not unusual, when a family member needed extended nursing home care, for the nursing home, as part of the admission process, to require that some other family member guarantee payment of the nursing home resident’s account. Then, if the nursing home bill did not get paid, the nursing home could sue the family member who had guaranteed the payment.

That practice pretty well stopped when federal law prohibited nursing homes that participate in Medicaid or Medicare (nearly all) from requiring a third-party such as a family member or caregiver to personally guarantee payment of the cost of a resident’s stay as a condition of being admitted to or allowed to stay in a nursing home.

Recently the practice raised its ugly head again in the case of Saint Elizabeth Home vs. Graham, where a family member was held liable for a nursing home bill because, although the nursing home had not required him to guarantee payment, the family member voluntarily did so. A survey

of nursing home practices following this lawsuit revealed that many nursing homes still demand that a family member guarantee payments of monthly nursing home charges in the nursing home’s admission agreement.

Some family members have been subjected to wage garnishment and have even lost their homes after being pursued by nursing homes for debts associated with a family member’s or friend’s cost of care.

Occasionally the government really does try to help citizens, In response to these circumstances, the federal agency in charge of Medicaid and Medicare, the Center for Medicaid/Medicare Services (CMS), issued a letter confirming that a nursing home cannot require that a third-party caregiver personally guarantee payment of a nursing home resident’s bills as a condition of the resident’s being admitted to or staying in the facility.

Such actions violate the federal Nursing Home Reform Act of 1987. The CMS also warned debt collectors that acts to collect from such third-party guarantors might violate the federal Fair Debt Collections Practices Act and the Fair Credit Reporting Act. CMS confirmed that debt collectors

can violate the Fair Debt Collection Practices Act and Fair Credit Reporting Act when they attempt to collect a nursing facility debt from a caregiver based on contract terms that are invalid under the Nursing Home Reform Act and that a debt collector who attempts to compel a caregiver or family member to pay a nursing facility resident’s debt may violate the prohibition

on misrepresentations when the debt is invalid under the Nursing Home Reform Act.

The U.S. Department of Health and Human Services, parent agency to CMS, has also joined the battle by sending a letter to nursing homes and their debt collectors urging them to examine their debt collection practices, stressing that contract terms that conflict with the federal law are

unenforceable, and urging that they ensure that they are in compliance with federal law.

All of these actions by the federal government build on the Biden administration’s commitment to ensuring that older Americans and people with disabilities receive the care they need, improving the safety and quality of nursing home care, and holding nursing homes accountable for the care they provide. Big Business may ignore the infirm little guy, but when the Feds are behind us they take notice.

If this article alerts even one reader that he does not have to sign a personal payment guarantee of a family member’s nursing home account it will be well worth the time I have spent writing it.

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Gerald W. Townsend is a partner in the law firm of Fluharty & Townsend, Parkersburg, West Virginia, with special emphasis upon Medicaid planning to protect assets from nursing home costs. He can be reached at jtownsend@fntlawoffices.com.