Q. Medical debt seems like a big issue these days, with myself and others I know struggling to pay medical bills. I heard that hospitals and nursing homes are suing more often to get their debts paid. Oddly, my friend in upstate New York is being sued by a nursing home for another friend’s debts. Not even a family member … just a casual friend! She has no control over his money or authority to make decisions for him, yet they are still coming after her. I’ve never heard of such a thing? Is this happening a lot, and how can it be avoided?
A. Medical debt is a real problem, affecting more than 50 percent of adults in the United States. In an investigation by Kaiser Health Network (KHN) and National Public Radio (NPR), an analysis was conducted on credit bureaus, hospital billing, and credit card data, and hundreds of interviews were recorded featuring patients, physicians, health industry leaders, and consumer advocates. These were some of the findings of this extensive research:
- A quarter of adults with health care debt owe more than $5,000. And about one in five with any amount of debt said they don’t expect to ever pay it off.
- About 50 million adults ― 1 in 5 ― are paying off bills for their own care or a family member’s through an installment plan with a hospital or other provider.
- One in 10 owe money to a friend or family member who covered their medical or dental bills, another form of borrowing not customarily measured;
- About one in six adults are paying off a medical or dental bill they put on a credit card.
- As of last year, 58 percent of debts recorded in collections were for a medical bill. That’s nearly four times as many debts attributable to telecom bills, the next most common form of debt on credit reports.
- The burden is forcing families to cut spending on food and other essentials. Millions are being driven from their homes or into bankruptcy.
- Medical debt prevents some Americans from saving for retirement and investing in their children’s or grandchildren’s educations.
Medical Debt Is Blocking Patients from Care
About one in seven people with debt said they’ve been denied access to a hospital, doctor, or other provider because of unpaid bills. About two-thirds have put off care they or a family member need because of cost.
Many hospitals thrived even through the pandemic. However, many Americans have been faced with thousands of dollars in bills as health insurers shifted costs onto patients through higher deductibles.
One City in New York Is Pursuing Unpaid Medical Bills, Suing Not Only Residents, But Their Friends and Family
About one in seven adults who have had health care debt say they’ve been threatened with a lawsuit or arrest, according to the KFF poll; 5 percent say they’ve been sued. This is exactly what is happening in Rochester, NY.
Pursuing unpaid bills, several nursing homes in Rochester, NY and surrounding areas have been suing children, grandchildren, neighbors, and others, many with no financial ties to residents or legal responsibility for their debts.
In Monroe County, where Rochester is located:
- Twenty-four federally licensed nursing homes filed 238 debt collection cases from 2018 to 2021 seeking almost $7.6 million;
- Nearly 66 percent of the cases targeted a friend or relative;
- Those being sued were accused — often without documentation — of hiding residents’ assets, essentially stealing. The remaining cases targeted residents themselves or their spouses;
- Nursing homes have gone after some families for tens of thousands of dollars. In a few cases, debts surpassed $100,000;
- In most cases reviewed by KHN, the people sued didn’t have an attorney;
- In nearly 33 percent of cases, 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 percent on top of the debt.
In one particular case, a nursing home claimed a woman owed $82,000 for her mother’s care. The resident was, in fact, a cousin, according to court papers.
Nationally, consumer attorneys in California, Illinois, Kentucky, Massachusetts, New York, and Ohio said they regularly see lawsuits against family and friends. In 2020, Washington, D.C., secured an agreement with two nursing homes to stop what authorities called “deceptive billing practices.” The homes had sued at least 15 family members, the attorney general found.
Be Sure to Read Admissions Agreements Carefully and Know Your Rights
Nursing home admissions agreements can be lengthy, cumbersome documents. They often designate in fine print that whoever signs as a “responsible party” will help the nursing home collect payments or enroll the resident in Medicaid.
Many lawyers say making a family member financially liable is unfair. “If you bring your child to a doctor, you should pay for the child’s medical care. But if your adult child brings you to a nursing home and you’re 80, the law doesn’t bind you to pay those bills,” said Paul Aloi, a Rochester attorney who has represented all sides — patients, hospitals, and nursing homes — in debt collection cases.
Federal laws and regulations prohibit nursing homes from requiring a resident’s relatives or friends to financially guarantee the resident’s bills. 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 and people are given a stack of forms and told, “Sign here, sign there. Click here, click there.”
Be wary when presented with these forms and know your rights.
On a positive note, several of the cases in Rochester have been dropped due to lack of evidence and not enough facts to support the claims from the nursing homes against friends and relatives.
Learn More About Filial Responsibility and What Is Involved
In a growing number of cases in the United States, adult children are being held legally responsible for their parents’ nursing-home or other care expenses. The reason is that 30 U.S. states, including Virginia, have filial responsibility laws obligating adult children to financially support their parents. Now, as described in this article, friends and cousins are even being sued. Here’s our list of all the states that have filial responsibility laws.
These laws, which have mostly gone unenforced for decades, except for a handful of cases that we have highlighted in past articles, are reappearing in court cases as an aging population struggles with astronomical health care and long-term care costs.
Plan Ahead for Yourself and Your Loved Ones
Without proper planning, adult children may very well be on the hook for their aging parents’ care, or another’s family member’s care. So, as always, it’s extremely important to plan ahead to protect assets and obtain Medicaid, which typically cuts off any claim to filial responsibility from that point forward, so that you do not fall victim to a filial support lawsuit.
To do proper Medicaid asset protection planning, families need the help of an experienced Elder Law attorney, such as myself. Whether you or your loved ones are years away from needing nursing home care, already in a nursing facility, or somewhere in between, the time to plan is now, not when your loved ones are about to run out of money. Call us to make an appointment for an initial consultation:
Elder Law Attorney Fairfax: 703-691-1888
Elder Law Attorney Fredericksburg: 540-479-1435
Elder Law Attorney Maryland: 301-519-8041
Elder Law Attorney DC: 202-587-2797
About Evan H Farr, CELA, CAP
