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 Dear
Debt Adviser,
How do nursing homes collect debt? My 71-year-old mother is currently treated by hospice, in a nursing home. She owns a home (she's not married to my father) and her other asset is Social Security. The family is thinking about sending Mom to my home for care. She will owe $6,000 to $8,000 total for two nursing homes. How can I work with the nursing homes fairly? Do nursing homes have the right to freeze any future Social Security income from Mom?
-- Penny
 Dear
Penny,
I don't know how our parents got so old and we didn't. My mom is going to be 86 this month and she and I are amazed at that fact. Caring for, or even merely about, an elderly parent is stressful on a good day. Add in financial issues and the stress meter begins to look like a thermometer on a July afternoon in Houston! As to your question, rest assured that your mother's Social Security income is protected from garnishment, levy, attachment or other legal process with the exception of federal debts like income taxes and student loans or to enforce child support or alimony obligations.
Still, the nursing home is owed a debt for the care they gave your mom and as such has the same rights as any other creditor to collect a debt.
Did you or any other persons sign a document guaranteeing payment to the nursing home? If not, the nursing home cannot collect the charges from you or other family members. Your mother's home, however, can eventually be used to satisfy the debt by the legal process of a lien against the property.
Some nursing homes use outside collection
agencies to handle overdue bills as a normal part
of doing business. After all, a nursing home's
calling is caring for people, not collecting bills.
The result, however, can be a surprisingly aggressive
attempt to collect from family members who are
not responsible for the debt. It may include a
pitch designed to appeal to your guilty conscience
to the effect that your mom would want you to
clear her name and so on. So even though
you may not be legally responsible, I wouldn't
be surprised if you or your family members got
a call one day about the billing.
It sounds like you want to protect the property from a forced sale. In all likelihood, the most that will happen is that a lien will be placed on the property and the bill will be paid upon sale or ownership transfer. Still, if your mother's finances can stand it, I suggest that you contact the nursing home and work out a payment plan to eliminate the debt. Debt collection costs everyone something, so they should be willing to work with you to establish a reasonable payback arrangement.
For those readers who have family
members in nursing facilities that are being paid
by Medicaid, the federal government requires that
each state have a Medicaid Estate Recovery Act
in place to recover long-term care costs paid
to Medicaid recipients. Most recovery efforts
involve real property or the person's home.
Certain restrictions may be in place, such as if the person has a surviving spouse, a child under age 21, or if the person is a joint owner on the home. In general, a lien is placed on the property that can be collected at the time of death or if the property is eventually sold. Each state's recovery efforts are different, so check with your state's department of health for details.
For my readers who are looking at
a similar situation in the future, I strongly
suggest that you do some advanced planning with
a professional who has been certified by an independent
organization. Roger La Pierre, an investment adviser
with Merrill Lynch in my home state of Rhode Island,
suggested to me that a Chartered Retirement
Planning Counselor (CRPC), Certified Financial
Planner (CFP), Corporation for Long Term Care
Certification (CLTC) or Long Term Care Planning
Specialist (LTCP) designation shows extra training on
the issues concerning planning for long-term care.
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