CFPB, Center for Medicare and Medicaid Services Affirm Third-Party Financial Liability Regulations for Nursing Homes

Lori Kalani, Bernard Nash
Cozen O'Connor
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  • The CFPB and Center for Medicare and Medicaid Services (CMS) issued a joint notification letter to nursing facilities and debt collectors affirming the agencies’ position that nursing facilities can violate the Nursing Home Reform Act (NHRA), Fair Debt Collection Practices Act (FDCPA), and/or the Fair Credit Reporting Act (FCRA) by requesting or requiring that a third party personally guarantee payment to the facility as a condition of a resident’s admission or continued stay.
  • As explained in the letter and an accompanying CFPB Circular, nursing facilities that participate in Medicare or Medicaid may not require third parties to incur personal financial liability for the cost of those facilities (although third parties with access to a nursing facility resident’s income or resources may contract to provide the facility payment from those resources). Further, any third-party debt collector hired by a nursing facility to collect on such invalid debts likely violates the FDCPA and/or FCRA.
  • The agencies advise nursing facilities to examine their practices to ensure compliance with this guidance and federal law, to proactively remediate any harm to consumers caused by violations, and to notify any debt collectors working on their behalf of their obligations and limitations on collecting from third parties.

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