Filial responsibility – Can I be responsible for my parent’s medical debt?

A filial responsibility law is one making relatives financially responsible for the care of another. Virtually every state requires parents to support minor children, but most states do not require anyone to support relatives who are over the age of 18. These laws are antiquated and can be traced back to the Elizabethan Poor Law of 1601. In Georgia, for example, the law (O.C.G.A. § 36-12-3) gives counties the right to bring an action to recover provisions they furnish. But Georgia counties don’t furnish many services and they don’t pay for nursing home care or long-term care. So, for the most part, Georgia’s filial responsibility law is a toothless tiger.

As a general rule, if a nursing home resident is eligible for Medicaid, then no one else can be sued for their nursing home bills. Specifically, 42 C.F.R. § 483.15(a)(3) provides: “The facility must not request or require a third party guarantee of payment to the facility as a condition of admission or expedited admission, or continued stay in the facility. However, the facility may request and require a resident representative who has legal access to a resident’s income or resources available to pay for facility care to sign a contract, without incurring personal financial liability, to provide facility payment from the resident’s income or resources.” This regulation is part of the nursing home quality of care regulations applicable to all nursing homes that accept Medicare and/or Medicaid. Other protections exist which might not be apparent at first blush. For example, in Georgia no one is responsible for another person’s debts unless you sign a written guarantee to pay those debts. See O.C.G.A. § 13-5-30(a)(2). Since many admission agreements include guarantee provisions, that’s why it’s important that you sign in your representative capacity (e.g., Sally Smith, by John Smith, attorney-in-fact). Usually including initials showing that you’re signing as someone’s agent such as “POA” or “AIF” are sufficient. This binds the estate of the patient for payment, but shows that you’re not personally guarantying the debt.

Having said that, some nursing homes try to collect unpaid bills from relatives as is discussed in a July 28, 2022 article titled Nursing homes are suing friends and family to collect on patients’ bills. The theory for suing relatives is usually called filial responsibility, but more often the real theory is that the relative took the nursing home resident’s money so it’s more likely a fraudulent conveyance.

Estate recovery is a different issue and is discussed here. Of note, Medicaid estate recovery cannot be pursued against anyone other than the applicant’s estate.

What is filial responsibility? (Wikipedia)

Daughter not liable for unpaid nursing home bill (N.Y. Civ. Court)
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Hillside Manor Rehabilitation and Extended Care Center sued the daughter of a deceased nursing home resident to recover $6,830.40. The nursing home alleged fraud among other causes of action. Its sole witness was from its accounts receivable department. The defendant testified that she used her mother’s funds primarily to pay household bills for her mother’s home. The court examined the bills and found that, although there were several transactions with no clear nexus to the household, most seemed to be consistent with the daughter’s testimony. Further, the court found that federal and State prohibit third party guarantees. Under State law, a third party can only be required to use the resident’s funds for the resident. Under these facts, the nursing home failed to prove defendant’s intent to defraud the nursing home or to hinder it from collecting payment.
Hillside Manor Nursing Center v. Barnes, 2010 NY Slip Op 50966U (5/28/2010)

Judgment against attorney-in-fact mandated following default (Conn. App.)
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On December 13, 2007, Anna Parawich’s attorney-in-fact, transferred money from Parawich’s account to himself. The next day, Parawich was admitted to Abbott Terrace Health Center, a nursing home. The transfer made Parawich unable to meet her obligation to Abbott Terrace, although it was known there would be financial obligations. The attorney-in-fact signed an admissions agreement providing that he would use Parawich’s assets to pay her expenses and that he would promptly apply for Medicaid when her assets were exhausted; he did neither. Abbott Terrace demanded payment after the amount due for services rendered reached $75,151.77. In October, 2008, Abbott Terrace sued Parawich and her attorney-in-fact; the complaint went unanswered and a motion for default was granted. At a hearing on damages, the court rendered a judgment finding that Parawich alone was liable for damages. After re-argument, the trial court again entered judgment only against Parawich and Abbott Terrace appealed. The court of appeals reversed, finding that by virtue of the default, the attorney-in-fact had admitted Abbott Terrace’s allegations relating to promissory estoppel and fraudulent conveyance. Accordingly, Connecticut law demanded a judgment against the attorney-in-fact. The case was remanded for a determination of damages.
Abbott Terrace Health Center, Inc. v. Anna Parawich, 120 Conn. App. 78 (3/23/2010)

Nursing home cannot hold family member liable for unpaid debt (N.J. App.)
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In 2006, Heriberto (again) conveyed his home to his son, Herbert. In 2008, Heriberto was admitted to a nursing home which was aware of the prior transfer. Heriberto’s daughter-in-law, Kathryn, signed an admission agreement requiring her to use Heriberto’s assets to pay for his care until Medicaid began paying. The agreement did not make her personally liable for the bills and did not require the return of any previously conveyed assets. Herbert entered into a similar oral agreement. When a Medicaid penalty was imposed, the nursing home demanded payment. The family took Heriberto home, where he received care until he died. The nursing home billed Herbert and Kathryn directly in the amount of $23,000. When they failed to pay, suit was filed against the estate (which was insolvent), Herbert and Kathryn. Herbert and Kathryn moved for summary judgment, which was granted; judgment was entered against the estate. On appeal, the court refused to reform the nursing home’s contract, noting that it was consistent with federal law which prohibits third-party guaranties. The court also found it significant that the nursing home was aware of the 2006 conveyance, which distinguished this case from other precedent.
Arnold Walter Nursing Home v. Pumarejo, 2010 N.J. Super. Unpub. LEXIS 610 (3/23/2010)

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