Should we pay my Dad's outstanding debt?

Star - I highly doubt the NH accepts “just signing over dads home”.... NH isn’t in the real estate business, or in dealing with a residents old house, etc. The NH wants to get paid for dads stay & they really don’t care what dad or his family need to get done in order to pay his bill.

His bill will need to be paid. 
He could apply for Medicaid and become “Medicaid Pending” status at the facility, but to me if he’s selling his home, all this is doing is creating a pile of paperwork cause once house sells he becomes ineligible for Medicaid (has $$ from sale of home) then has to do a spend down and then reapply to Medicaid, AND if your state allows for clawback of Medicaid to repay costs paid by Medicaid in the interim then deal with that too. To me it’s less dpoa work to get house listed on the market and be a very very motivated seller so his has $$ from house sale & NH bill can be paid for months or years.

Also if his bill isn’t getting paid, the NH - in order for dad to stay - could require a family member to sign a binding financial responsibility contract with the NH. So they are legally responsible for dads bill. Annual cost of private pay at a NH averages 100k. If that’s done they won’t care if it takes years to sell the home, cause they have family legally on the hook to pay.

Facility know things can take time but 3 - 5 months seems to be the tipping point and they need to know where funds are coming from. They could care less about maintenance issues with dads old house, your travel time to come in or whatever else family dramarama exists. They want dads bill paid. If push comes to shove, facility can & will issue a “30 Day Notice” (has to either settle accounts or move out) to the resident and the notice is CC’d to their dpoa, APS and the state. If outstanding bill not dealt with asap, they can & will contact APS and ask for dad to get placed as an emergency ward of the state with guardian named. Guardian takes over completely all aspects of dads life & do not have to involve family at all.

To me, if home is being sold, then Whomever is dads dpoa needs to flat just get on placing home on the market with a Realtor and getting a Listing agreement done. If it’s way under its tax assessor value then get it inspected and appraised to determine a more accurate FMV.  I’d suggest a family meeting get called to determine what to do with contents of the house & then get a massive clear out done ASAP. The elder law atty may have a list of a Realtors that they’ve worked with. You can’t be all maybe manana indecisive on dealing with this. At 5k-15k a mo for a NH stay his debt runs up fast. Good luck!

Thank you Igloo and everyone for your help. As far as my dad’s house, we do not plan to keep it. We are trying to figure out if it’s best to just sign it over to the NH. I don’t think it will sell quickly and the house needs work and I live out of state. What happens if my dad passes, God forbid, before the value of the house is wracked up at the NH.

Starr - $1500 is a great deal. Your hubs gets this as an employee benefit? That is awesome. Wish more employers offered this type of benefit.

Since your seeing an atty, I’d ask the atty how to best approach the debt.

I’m unclear, so the charge was formally disputed? If so and there’s a paper trail then dad writes a letter informing debt collection that he already has disputed the debt and has asking for appeal or verification. Need to get on this ASAP within and mail certified mail with return registered card. Abt $8.00 at uspo for the duo. This buys him like 30 days for them to provide a update as to if debt is valid. If they don’t get back to you in 30 it’s over for this particular debt collector. But they will sell the account to another even more bottom feeder collection agency....then they sell it again.... To me it’s too low of an amount at $800 to take to court to get a judgement so that has to get served, court fees & time, then renewal of judgement every yr or so. For $800 it’s all about being a butt rash. Problem will be if they start to contact you all, like at home, your cell, hubs work...your work. You need to have a exact series of sentences to say to any communications...... it’s not your debt, your not responsible and as such they are not to ever contact you again. Problem is this cycles over to the next debt collection group. They are relentless and ruthless even for $800. Could go 3-5 years. Sigh.

Your dad -if all he has for income is SS and federal or state pension - he will be pretty well outside of debt collection getting his income attached as SS & civil service are immune to attachment from creditors except IRS or the state. 

For it to be an issue on his house, there would need to be to be a judgement AND your states laws allows for judgements placed onto property owned by debtor. Like TX & FL do not allow this, but other states do. It would be a cloud on the title & need to be paid before sale can finalize. 

Medicaid does NOT care about their debts. Medicaid is all about what the applicant has for income & assets. His house is an exempt asset for Medicaid. Dad can keep house. BUT - and this is mucho importante- he is required to do a copay or SOC to the NH of ALL his monthly income less a small personal needs allowance ($60 avg). Dad can continue to own home but somebody in the family will need to pay all costs (taxes, insurance, whatever) from day 1 of medicaid till beyond death and his executor goes through the estate recovery process &/or probate. To me, for a elder to keep their home can make sense IF the heir(s) have a likelihood of exemptions or exclusion to MERP; family has $, interest & sense of risk /humor about dealing with a home that they may or may not own later on.... But what seems to happen based on many posts on this site is that at the beginning Family is all gung ho on not ever selling home, then a bit of time goes by & Sissy doesn’t pay property taxes, Big bro doesn’t cut grass, someone’s sketchy kid has a beer party at house and dealing with everything house fall$ to 1 respon$ible sibling. Yet everyone is to benefit as per will from the house. House gets sold within the first year; dad now has $ so becomes Medicaid ineligible & now private pay for care till he becomes impoverished again. Somebody is going to have to deal with all the paperwork on sale, Medicaid applications, etc. Whomever paid house costs is out of luck to easily be reimbursed as Medicaid looks upon it as gifting of parents $ cause it’s parents property.

 Either sell it before going into NH or plan to stay all in for the house from now to however long it takes beyond death to settle.

Some states allow for an Enhanced Benefit Deed to be done as they bypass probate for transferring the home. Most states don’t do these at all. Speak with the atty as to what other options could be in addition to a Enhanced, like a Trust. These things aren’t diy projects. But remember family is going to end up paying all on the home which will be in dads name till it’s worked though in an after death process.

Atty may suggest the house $ put into a Trust. To me, if it’s a good bit of house $$, like over 300k that makes sense as he is likely to die before trust runs out, so no probate since it’s a Trust. Under 300k well sadly he will likely run through most of the $$ to pay for care as it’s abt 100/150k a yr and average stay in NH is like 2-2.5 yrs. Staggering costs for LTC. Good luck & get organized.

sstar,
My Medicaid experience is a little outdated (2012) but $1500 is slightly less than I paid in 2012. In 2012 the Elder Law practice handled all the paperwork, forms, correspondence, etc.

Someone (you?) will have to gather all required financial statements, documents, etc., and get that to the attorney ASAP.

Medicaid had to be renewed on a yearly basis. The fee I paid included the first renewal. I did the second one. I did it online. It was a breeze.

Iggi really is a Medicaid guru with updated info. Hope she sends some advice your way.

Oh, I had a collection on either Mom or Grandmother before I took over all their business. I dealt directly with the Hospital billing office.

Whatever the proceedure was that dad had it should have first been pre approved. The hospital usually contacts the insurers for approval before they perform anything unless it is an emergency.
It is not a bad idea for anyone contemplating any procedure that may be expensive for example an MRI to ask if the hospital has obtained approval before going ahead with anything. As everybody should know most hospitals willcharge for every little thing down to the last safety pin if they can get away with it. If in doubt ask for an itemized bill.

Is $1500 a good price for a complete elder care plan? I must say it sounds plenty to me, especially for a person who's likely to be eligible for Medicaid, but then again how would I know. Certainly it would nice to get legal expertise on board.

Gardenartist said it very well. I was a collector for a company so I was under different rules than a Collection Agency which are under stricter rules than I was. Did your Mom have the statement from Medicare and the supplimental? Medicare will pay what they feel is reasonable and hospital has to except it. Supplimental may pick up the rest. For both deductibles and copays have to be met for the year. You may want to make sure it was submitted to the supplimental. But when all is said and done...Dad doesn't have the money and you r not responsible. The collection agency will bug you. When you right that letter, make sure you give them no phone numbers, especially yours. If they do call you, tell them a letter of explanation was sent and they r not to call you again. Write the date down. If they continue to harass, then tell them you will report them. Collection agencies used to get 25% of the monies collected. The collectors get a commission so they work hard too collect no matter what. $800 is not that much that the hospital can't write it off to bad debt.

Ok, it definitely sounds like we should not pay this bill at this point. Yesterday, the Employee Assistance Program at my husband's work referred me to an elder law attorney. This attorney stated that he can prepare an Elder Care Plan for $1500. He stated that he would look at my dad's financials and advise us as to whether he would be eligible for medicaid and he'd also prepare his application for medicaid. He also said something about my dad not being forced to sell his house to pay for nursing home care. It's all very confusing to me. Has anyone used an attorney for this type of thing? Is it worth $1500?

Preface this with: I am not an attorney. I say don't pay it. If there are assets at death, they can file a claim. If not, they'll write it off. You could make a 'courtesy call' to them to provide the circumstances. No harm there. If they start to call your number, report them to your local secretary of state, who oversees 3rd party collections agents. Now I have to say this is all from my experience from over 30 years ago when I worked for a large 3rd party collections firm.

Thank you! But I realise I didn't answer the OP's question 🙄

The outstanding debt should be paid by (in order of preference)

the insurers, assuming you can appeal successfully;

your father, from the proceeds of his house sale, should you decide that the insurers' denial was in fact reasonable and not worth fighting - in which case you negotiate additional time to pay with whoever is handling the hospital's credit control function;

but most certainly NOT by you or your brother, who have no liability for the debt whatsoever.

CM, good points on challenging the rejection of the claim by the medical insurer.

Star, absolutely DO NOT CALL the debt collector. I accidentally answered a call w/o thinking, and even though I wrote down everything I was telling them, their "recording" later proved to be false, alleging claims of what I allegedly said. Recordings of phone calls can be altered, and in this situation, they definitely were.

So don't have ANY phone conversations with debt collectors. Do EVERYTHING in writing.

And write to the collection agency; it's been assigned, or even "sold" the debt, and will be the entity trying to collect it.

I don't know how much % it would get and how much the hospital would get, or even if the debt was sold whether or not the hospital would get anything. I'm guessing the hospital sold it at a discount.

But sometimes agencies will handle on behalf of a client, remitting a portion of that they recover.

I suppose it wouldn't hurt to carbon copy the hospital on the letter to the debt collector agency.

I would call the hospital. Worst that can happen is they say "we've referred it to a collection agency, you need to liaise with the agency." But if this insurance claim is still open, the hospital needs to explain why it didn't wait for the claim dispute to be resolved before they referred the account to the collection agency.

Bloody insurers...

Sstar1, if either you or your brother now has POA for your father in your mother's stead, the correct-est thing to do is to continue to pursue the insurance claim - it's the insurer who should be paying this outstanding amount, is the case your mother was making. Have you had a chance to get your heads round how the claim came to be disputed? Do you have an opinion about your mother's case?

The hospital seems to have been pretty quick off the mark, too. Especially if the insurer did pay the hospital direct for the part of the claim it accepted - did it, do you know? - then the hospital's credit control operation ought to be aware that it is not only the family who may be liable for the outstanding amount.

I hesitate to call the phone number listed on the collection agency letter because I don't want to give them my phone number. The last thing I want is to start getting harassing phone calls. Should I write to the collection agency or to to the hospital? I assume the hospital is no longer directly involved?

No on paying it. If they're aware of the situation then they may back off. Be forewarned though, they may put it on the back burner in the event he passes, then try to make a claim if probate is opened for him.

jeannegibbs Why would you feel bad? Hospital is not out any money, they recoup the debt through what they have charged others.

For $800 they are not going to hassle you. Call or write and explain the situation. Very likely the debt will be written off as it is such a small amount.

Just don't totally ignore it. Let the Credit Agency know what's going on. That's just common courtesy. They've spent more than $800 in man-hours.

Thank you for your response.
The collection agency letter states "this is notice that we may exercise our right to refer this account to our attorney for legal action against you unless full payment is made. If full payment is not received by the above mentioned date, this account may be reported to the credit bureau as bad debt."
The debt is for less that $800

Star, thanks for the clarification. I'm not sure my understanding is correct, so could you verify?

The debt has already been turned over by the hospital to a debt collector (collection agency) for handling. But the threat by the collection is to

All that would mean is that Equifax, Experian and/or TransUnion would be notified and the debt would be listed in your father's credit report.

Did the letter threaten suit, or any other action? How much is the debt - not specifically, but in the hundreds of thousands of dollars?

If it sues for a small sum, the filing and other legal costs might not make it worth pursuing.

The collection agency might just be threatening, but I would always take collection letters seriously. Debt collectors operate on the verge of or outside the law - I've experienced one (actually an otherwise well respected charity that also sold its merchandise) and was hounding my father for a debt that never even existed!

I don't know enough about Medicaid to answer your question, but I've asked Igloo to respond; she's an expert. She's very, very knowledgeable and helpful and can answer the question on whether a lien would impact what I believe would be Medicaid's legal superior position.

In other liens, the issue would be one of priority - which lienor files first, and properly perfects its lien. But with Medicaid is a federal program, superiority takes a different position.

Iggy, are you here today?

Insurance denied part of a claim for a medical procedure my father had. My mom was trying to fight the denial apparently. The hospital referred it to a collection agency. The letter is from the collection agency and says it is a final notice before being sent to credit bureau. Dad is not yet on Medicaid. If we let the debt ride, will it impact his Medicaid application?

Is the hospital bill for services for your father, or is it a bill sent to him b/c he might have been listed as a responsible financial party for your mother's medical bills?

If the latter, advise the hospital, in writing, with a copy of the death certificate (unless she was there when she died); some medical pros will waive bills for a deceased person. This has been my experience.

Otherwise, you may want to consider a letter to the hospital advising that your father is indigent and cannot pay the bill. Referral to a credit bureau isn't the same as referral to a collection agency, which is what I would suspect the hospital actually or eventually would do.

If the hospital is a Hill-Burton hospital (built with funds under the Hill-Burton Act), it's required to accept some indigent patients. I don't know the technical definition of indigent if your father does have real property though. And I'm not current on any amendments or changes to the statute, so this is something to check out, or consult with a elder law or even a bankruptcy attorney.

Debt collection law firms are primarily "creditors' right's" firms, which means they would represent the hospital or entity to which it assigns the debt. They are not firms for people in need of protection.


Also familiarize yourself with the Fair Debt Collection Practices Act, especially the provisions about responding to the first notice w/I 30 days. Your father should respond, even if you write the letter for him. Otherwise the debt will be assumed to be valid. You'll want to challenge the debt once you get that first collection notice from a debt collector.

Send any mail by certified mail, return receipt requested. This issue won't go away quickly or easily and you need to make sure that you have your documentation in order.



If you're going to apply for Medicaid, start the process now. If the hospital eventually refers the bill to a collection agency, as the process winds through the legal system, that agency may sue and eventually file a lien against your father's house.


Igloo is a knowledgeable poster on Medicaid, and she could tell you whether or not a superior lien would supercede a Medicaid lien (I doubt it), but this is an aspect to explore now and plan ahead of time.

Good luck.

Ditto above. Don’t take on his debt, there is simply no need at this point

No.

It is not your debt, don't pay it.

The repercussions of unpaid bills is on your credit rating -- in this case Dad's credit rating. A bad credit rating could prevent him from taking out new loans, have a higher interest on credit cards, etc. But that is not exactly a problem for Dad, is it?

I feel bad that a legitimate creditor is not getting paid. But Dad can't pay and you have no need to.