A person with grey hair is assisted by two others, one holding onto each arm, as they stand up.
Credit: Pexels Kampus Production

More than 1.4 million people live in approximately 15,500 nursing homes across the country. The United States’ population is aging rapidly, as is the cost of aging. And with the soaring prices of nursing homes, comes the medical debt and burdensome collections associated with it. This is exacerbated by workforce shortages across the industry and long home and community-based services waiting lists. A longitudinal study found that older adults who are women, Black or low-income are more likely to spend 2 or more years of their life after 70 in a nursing home, making them more likely to suffer from nursing home debt. The Consumer Financial Protection Bureau (CFPB), along with the Centers for Medicare & Medicaid Services (CMS), released a letter to all nursing homes and their debt collectors this fall reminding them of the debt collection rules and regulations that they need to follow. The CFPB also released a report on the billing practices of nursing homes and their debt collectors. This is just the first step on the way to making nursing homes more affordable and improving the quality of care.

In September of this year, CFPB Director Rohit Chopra released a letter to nursing homes and their debt collectors, and hosted a field hearing to listen to the voices of both experts and community members regarding this issue. The letter addresses the practice of suing a third party in cases where the resident cannot pay or has passed. In accordance with the 1987 Nursing Homes Reform Act, it is unlawful for nursing homes participating in Medicare and Medicaid. Many homes, however, have this as a common practice in their entry paperwork packets for residents. Known as “responsible party” clauses, these additions are used as grounds in lawsuits and often successful in collecting the money. They are designed to be confusing, and can take advantage of a stressful situation and any present language barriers. The letter emphasizes that these are illegal and cannot be enforced in collecting debt payments. The CFPB is responsible for enforcing the federal laws that protect caregivers from debt collectors who use these illegal practices. The field hearing further reinforced the prevalence of these practices and the impact they have on caregivers and loved ones.

The actions taken by the CFPB and CMS are not alone in bringing attention to the issues around nursing homes and long-term care facilities. In conjunction with the State of the Union in February, the White House issued a statement focused on protecting older adults and improving the quality of nursing home care. In the statement, the White House listed multiple steps that CMS would take including: establishing minimum nursing home staffing requirements, reducing resident room crowding, strengthening the skilled nursing facilities and value-based purchasing program, and reinforcing safeguards against unnecessary medications and treatment. The CFPB built on that with their recent spotlight report.

The CFPB report highlighted the skyrocketing prices and predatory practices of the nursing homes and debt collectors. The cost of nursing homes has dramatically increased over the last 20 years. Per the Genworth Cost of Care Survey, in 2021 the annual median cost of a room in a nursing home was $108,405. This cost has outpaced the growth cost of other consumer and medical prices, rising over 60 percent from 2004 to 2020. This cost is lessened some for those on Medicare and Medicaid. However, the coverage for nursing homes and long-term care institutions is limited. Older adults also typically have a fixed income, making the costs not covered by insurance incredibly arduous.

Nursing homes and debt collectors have been able to continue the unlawful practice of suing third parties because, up to this point, there has been no comprehensive effort to halt it. Additionally, residents and their loved ones are often unaware this is illegal and if they did know, are hesitant to fight the place they or a loved one is staying. Government agencies rarely cite or have monetary repercussions against the nursing homes, and few private lawyers file affirmative cases for these practices. All of these issues need to be addressed in order to empower residents and their loved ones.

There are now steps being taken through the CFPB and CMS to address these issues. Along with the report and letter, CFPB has online resources for family members and caregivers to give them guidance on navigating predatory nursing home debt collection. CMS has also launched a public input process; released the data on mergers, acquisitions, consolidations, and changes of ownership for hospitals and nursing homes enrolled in Medicare; and taken steps to improve Care Compare, the nursing home comparison site. If you or a loved one is entering into a nursing home, know your rights and utilize the resources available to you.