A nursing home should be a safe haven for aging and disabled loved ones, offering compassionate and reliable care. Yet, recent findings reveal alarming financial exploitation by some facilities, threatening the well-being of both residents and their families. Predatory financial practices in nursing homes—ranging from fraudulent billing to aggressive debt collection—impose devastating financial and emotional costs on families.
Overbilling and Systemic Deception
A report called “Overbilling and Killing? An Examination of the Skilled Nursing Industry” by John M. Griffin and Alex Priest and summarized in a brief from the Long Term Care Community Coalition details how nursing homes inflate costs by enrolling residents in high-priced, unnecessary rehabilitation services. Such practices prioritize profit over patient care, often harming residents through inappropriate treatment plans. At the same time, these facilities cut essential staff, increasing the risk of preventable health issues like bedsores and falls. To evade accountability, many manipulate data, creating a false image of quality care and leaving families unaware of the risks.
The study found that residents of the worst offenders were 67% more likely to develop pressure ulcers or bedsores and 8% more likely to die within 90 days of leaving the facility.
Aggressive Debt Collection Tactics
Equally concerning is the aggressive pursuit of debt from family members of residents. According to research by the National Consumer Law Center (NCLC) and Justice in Aging, some nursing homes exploit legal gray areas to collect money from relatives and friends of residents, even when they have no obligation to pay. Facilities often hide clauses in admission agreements, tricking caregivers into assuming financial responsibility. When families can’t pay, nursing homes resort to threats and legal action, leaving relatives to defend against debt they don’t owe.
Relevant Protections: Federal and State Laws
Thankfully, laws at both the federal and state levels exist to counter these unethical practices. The Nursing Home Reform Act (NHRA) explicitly forbids facilities participating in Medicare or Medicaid from requiring a third party to guarantee payment as a condition of a resident’s admission. This law ensures that nursing homes cannot legally force family members into debt under the guise of being “responsible parties.”
Missouri’s consumer protection laws also offer safeguards. The Missouri Attorney General’s office enforces regulations against deceptive debt collection practices. Additionally, facilities attempting to use “responsible party” clauses may find themselves challenged in court if they misrepresent a caregiver’s liability. Federal protections like the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) restrict abusive tactics by prohibiting harassment and ensuring accurate debt reporting.
Impact on Families Due to Predatory Financial Practices in Nursing Homes
The combined effect of overbilling and illegal debt collection devastates families at a time when families are already grieving the loss of a loved one. Caregivers already burdened with supporting loved ones often face financial ruin, relentless harassment, and legal battles. Worse, the compromised quality of care endangers residents, revealing that financial motives too often outweigh patient welfare.
Advocating for Accountability and Change
Organizations like the Long Term Care Community Coalition and Justice in Aging expose these practices and advocate for reform. They emphasize the need to enforce existing laws, train judges to identify illegal collection practices, and increase public awareness.
VOYCE recently created the Missouri Alliance for Long-Term Care Reform to advocate for better treatment of residents and families in nursing homes in Missouri.
What Families Can Do
Families should stay vigilant. Reading admission contracts carefully, understanding their rights, and knowing about protections like the NHRA are crucial steps in avoiding entrapment. If targeted by unethical debt collectors, families can report to state authorities and seek guidance from consumer protection organizations.
Awareness and advocacy remain key. The more we know and push for systemic change, the closer we come to ensuring that nursing homes prioritize the dignity and safety of their residents over profits.