Law-abiding nursing home operators have a new complaint. They compete with chains who “engage in exploitative tactics or otherwise break the law.” The disadvantaged facilities blames illegal use of financial guarantees at admission. Media reports indicate the practice is widespread and growing. The nursing home industry’s predatory practices include arbitration and attempting to collect from relatives and friends.
The Consumer Financial Protection Bureau warned the industry recently. A nursing care facility “may not require that a third-party caregiver personally guarantee payment of a nursing home resident’s bills” as a condition of admission. Such a contingency violates the Nursing Home Reform Act. The agency explicitly warned nursing facilities not to ask a caregiver to guarantee payment as a condition of admission, expedited admission, or a continued stay.
CFPB said that admission contracts that violate the Act’s ban on requesting or requiring a third-party guarantee of payment are unenforceable. Subsequent collection of debts based on those contracts violate consumer financial protection laws. The Fair Debt Collection Practices Act prohibits “any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
CFPB Director Rohit Chopra encouraged families to file complaints. Nursing homes need to stop the common use of strong-armed financial practices during the admission process. This is big news for American consumers and the elderly community.