HHS Joins CFPB to Protect Nursing Home Residents and Their Caregivers From Illegal Debt Collection Practices



In Joint Letter with CFPB, HHS Stresses to Nursing Homes and Debt Collectors Prohibition on Requiring Caregivers to Assume Responsibility for Cost of Resident’s Care

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), doubled down on its work to protect nursing home residents and their caregivers from illegal methods of guaranteeing payment for care. CMS, in partnership with the Consumer Financial Protection Bureau (CFPB), sent a joint letter to nursing homes and their debt collectors urging them to examine their debt collection practices and ensure they comply with federal law that prohibits nursing homes from requiring family members or caregivers to guarantee payment for a resident’s nursing home stay.

The letter was precipitated by concerns that some nursing facilities have attempted to evade this prohibition by creating admission contracts that attempt to hold third parties liable for a resident’s debt. However, CFPB and CMS stress that contract terms that conflict with the federal prohibition are unenforceable. 

The letter is HHS’s latest efforts to build on the Biden-Harris Administration’s commitment to ensuring older Americans and people with disabilities receive the care they need. With his State of the Union address earlier this year, President Biden announced a set of reforms to improve the safety and quality of nursing home care, to hold nursing homes accountable for the care they provide, and to make the quality of care and facility ownership more transparent so that potential residents and caregivers can make informed decisions about care.

“A caregiver making difficult decisions about their loved one’s future should have the peace of mind of knowing nursing homes won’t illegally coerce a family into assuming liability for medical debt,” said HHS Secretary Xavier Becerra. “We expect nursing homes to act responsibly and comply with the law. HHS continues to follow through on President Biden’s commitment to improving the safety and quality of nursing homes.”

“Nursing home residents and their families have the right to be free from harassment and financial pressures from facilities,” said CMS Administrator Chiquita Brooks-LaSure. “CMS supports CFPB’s focus on making sure debt collection practices of nursing homes comply with federal law. The Bureau’s action complements the significant work CMS and our partners are doing in support of the Biden-Harris Administration’s initiative to improve the safety and quality of care in our nation’s nursing homes.”

CMS enforces the Nursing Home Reform Act of 1987, which prohibits nursing homes that participate in Medicaid or Medicare from requiring a third party such as a family member or caregiver to personally guarantee payment of the costs of a resident’s stay as a condition of admission (or expedited admission), or as a condition of continued stay in the facility. The CFPB enforces federal laws governing debt collection and credit reporting that protect caregivers from unlawful practices by debt collectors who wrongly attempt to hold caregivers liable for the costs of their loved one’s care and who report inaccurate information about caregivers to credit bureaus. With this action and others, HHS and CFPB are working together to ensure the nearly 48 million caretakers in the United States are not subjected to coercive tactics and unlawful practices by debt collectors.

In addition to today’s letter, HHS has heeded President Biden’s call to action to improve nursing home care for older Americans and people with disabilities by:

  • CMS launched the public input process and research study that will inform future rulemaking on a staffing requirement, with a commitment to release the proposed rule on minimum staffing by Spring 2023.
  • CMS launched the public input process that will inform future rulemaking to incentivize better staffing—namely, measures on staffing levels and staff turnover for the Medicare Skilled Nursing Facility Value-Based Purchasing Program.
  • CMS released data publicly — for the first time — on mergers, acquisitions, consolidations, and changes of ownership for hospitals and nursing homes enrolled in Medicare.
  • CMS issued a proposal that would require nursing home owners to be fingerprinted for federal background checks to address watchdog reports about abuse and Medicare fraud by nursing home owners.
  • CMS took steps to improve Care Compare, the nursing home comparison site, by better incorporating verifiable information about staffing levels into the 5-Star Rating System.
  • CMS updated its guidance to nursing home inspectors, including, among other things, requiring infection control specialists to be on site (not off-site consultants).
  • CMS issued an informational bulletin detailing actions that states can take using existing Medicaid authorities to drive better health outcomes for nursing home residents and improve staff pay, training, and retention efforts.