Director Chopra’s Prepared Remarks at the CFPB Field Hearing on Nursing Home Debt Collection Practices
Good afternoon, and thank you all for joining today’s virtual hearing.
The pandemic had a devastating impact on residents of nursing homes. Older adults across the country experienced further isolation from their families and friends. Mortality from COVID-19 has been disproportionately borne by those living in long-term care facilities.
Recently, there has been greater attention to the investors and large firms operating nursing homes and other skilled nursing facilities, and whether quality of care has suffered. But there has been less attention to some of the financial impacts on nursing home residents and their families in the aftermath of the pandemic.
Congress established the Office of Financial Protection for Older Americans within the Consumer Financial Protection Bureau to focus on financial issues related to long-term care, to combat financial exploitation of older adults, and to spot emerging consumer protection risks. By law, the office is required to coordinate consumer protection efforts across federal and state agencies on issues facing older adults, and we will be increasing our focus on this work.
I expect that our dedicated Office for Older Americans will emerge as a key pillar within the policymaking and law enforcement community on financial issues faced by older adults and their caregivers. Given the growing population of older adults, changes in technology, the retirement security gap, the cost of long-term care, and more, there is no shortage of challenges to tackle.
As part of this work, today, the Consumer Financial Protection Bureau and its Office of Financial Protection for Older Americans are pleased to host this hearing to focus on a particular issue: medical debt collection practices in connection with nursing home care.
In conjunction with today’s hearing, the CFPB’s Office of Financial Protection for Older Americans conducted an analysis of nursing home debt collection issues. The analysis included a review of enrollment contracts, public filings, and consumer complaints. In a newly published report, the CFPB details some of the unique circumstances relevant to medical debts associated with nursing home care. Specifically, we have found that family and friends of a nursing home resident are being pursued for debt collection, even though federal law prohibits nursing homes participating in certain federal insurance programs from requiring certain third parties to be financially responsible. This creates a risk that caregivers and others are subjected to debt collection and credit reporting practices on invalid debt.
As an initial step, the CFPB and the Centers for Medicare & Medicaid Services are alerting nursing facilities and debt collectors about this potential risk. The CFPB has also issued guidance to the enforcement community that explains when certain practices can violate the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.
Over the years, I have heard from those in both the debt collection industry and the nursing home industry that law-abiding actors that treat patients and consumers with respect and dignity are routinely disadvantaged by having to compete with those who engage in exploitative tactics or otherwise break the law.
Debt collection firms are a key part of the consumer finance ecosystem, and nursing homes are a major sector within our health care industry. It is up to all of us to make sure that we protect patients, their caregivers, and honest businesses. To aid in these efforts, we are urging families to file complaints with federal and state agencies. We also ask that those in the nursing home and debt collection industries who are aware of wrongdoing by a competitor to confidentially inform law enforcement.
We are grateful for the ongoing partnership with the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services to address the range of harms associated with medical debt.
Thank you again for joining today’s hearing, as well as to everyone involved with organizing it.