In October 2010, Doris Pike was admitted to Corry Manor, a nursing home in Pennsylvania. At that time, her husband, Levere, signed an agreement with the facility, promising to use his wife’s assets to pay for nursing home care provided to her. The agreement also required Mr. Pike to assert that he had legal access to his wife’s income and assets.
When Doris passed away a few months later, Corry Manor claimed an outstanding balance of approximately $8,000 for its nursing care services. Corry Manor retained Kennedy, a debt collector, to collect that balance. Kennedy first sent a demand letter to the Pike’s daughter, Joni Eades, who resides in New York, asserting that she could be liable for the bill under Pennsylvania’s filial responsibility law, even though she lived in New York. In a later telephone conversation with the daughter, an employee of the firm threatened to put a lien on the father’s home and garnish the daughter’s wages.
Five months after the demand letter, the law firm filed a collection suit in Pennsylvania state court and mailed the summons and complaint to the father and daughter at their New York homes. Joni and her father responded to the collection suit by suing Kennedy in New York federal court, claiming violations of the Fair Debt Collection Practices Act (FDCPA). They argued that the law firm had engaged in misrepresentations, threatened to take actions it could not legally take, and attempted to collect money it had no legal or contractual authority to collect. Their arguments were based on assertions that the Pennsylvania Filial Responsibility law did not support the payment demand, and that the law was preempted by the federal Nursing Home Reform Act (NHRA). This particular case asks the question: How does the NHRA and FDCPA interact with state filial responsibility laws? Let’s look at the outcome.
· Was the FDCPA violated? The appellate court decided that most of the actions Eades and her father were complaining about did not violate the FDCPA. For instance, under the FDCPA, a debt is a consumer’s obligation to pay arising out of a transaction that was primarily for personal, family, or household purposes. Since the nursing care services were primarily for personal or family services, and the bill arose from a consumer transaction in which the services were provided in exchange for a promise to pay, the court decided the FDCPA had not been violated.
· What laws take precedence when you collect a debt from out of state? When it came to collecting debt out of state, the Pennsylvania law firm was subject to New York jurisdiction, the appellate court said, and the firm WAS in compliance when it came to New York state law.
· Did the nursing home’s contract violate the federal Nursing Home Reform Act? The nursing home’s admission agreement did not violate the federal nursing home reform law, the court said. The federal law generally says that nursing homes cannot require third-party payment guarantees. However, the agreement only imposed on the father a duty to pay for the mother’s care from her resources, which was permissible. So, the agreement did not impose any personal liability on him.
· Did the federal NHRA preempt the Pennsylvania indigent support (filial responsibility) law? The appellate court said that there was no conflict between the two laws because nothing in the federal law was intended to shield patients’ family members from financial responsibility, and nothing in the state law conditioned a patient’s care on a family member’s financial responsibility.
Eades and Pike’s complaints were dismissed, for the most part. For more details on this case and the outcomes, please see the transcript for the case here.
What is Filial Responsibility?
What happens when a person who is in need of long-term care is unable to pay for it? Many states have laws that can make adult children financially responsible for their parents’ necessities of life when the parents do not have the means to pay for such necessities on their own. The extent of this responsibility can vary by state. Currently, Virginia has filial responsibility laws; DC and Maryland do not. Here’s the list of all the states that have these laws.
As you can see from the case described above, filial responsibility laws can be used by nursing homes and other long-term care facilities as a means to seek reimbursement for unpaid bills, and they are not preempted by the federal Nursing Home Reform Act.
For more details on filial responsibility, please refer to our blog articles on the subject, as follows:
· Filial Responsibility: Elderly Couple May Be Responsible For Son’s Medical Bills
· More Filial Responsibility Cases are Ending Up in Court
· Now this is SCARY- Filial Responsibility Part 2
· Are Children Legally Responsible for their Parents’ Care? – Filial Responsibility Explained
Without proper planning and legal advice from an experienced elder law attorney, such as myself, adult children may very well be on the hook for tens of thousands of dollars of care required by their aging parents. The only way you can make sure you do not fall victim to a filial support action is by planning ahead. Children have to be proactive regarding how their parents are financing their long-term care. Some families of modest means may assume Medicaid will cover a parent’s care once the parent has depleted savings and other resources. But it’s a huge mistake to assume that Medicaid will be easy to obtain.
Medicaid laws are the most complex laws in existence, with 8 separate bodies of law (4 at the Federal level and 4 at the state level) dealing with Medicaid and Medicaid eligibility. To do proper Medicaid asset protection planning, families need the help of an experienced elder law attorney, preferably a Certified Elder Law Attorney such as myself. And, the best time to do Medicaid Asset Protection planning is now. Whether your parents are years away from needing nursing home care or are already in a nursing facility, or somewhere in between, the time to plan is now, not when your parents are about to run out of money. Call us to make an appointment for a consultation:
Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797
About Evan H Farr, CELA, CAP
