Nursing Homes have a new statutory cause of action against families to collect their bills
September 10, 2013
Effective October 1, 2013, any transfer of assets resulting in the establishment or imposition of a penalty period creates a debt that is due and owing to a nursing home facility for the unpaid cost of care provided during the penalty period. A nursing home facility may bring an action to collect the debt for unpaid care provided (1) the debt recovery does not exceed the fair market value of the transferred asset at the time of transfer, and (2) the asset transfer that triggered the penalty period took place not earlier than two years prior to the date of the resident’s Medicaid application. The nursing home facility may bring such action against (A) the transferor, or (B) the transferee.
A court may award actual damages, court costs and reasonable attorneys’ fees to the nursing home facility if such court determines, based upon clear and convincing evidence, that a defendant incurred a debt to a nursing home facility by (1) wilfully transferring assets that are the subject of a penalty period, (2) receiving such assets with knowledge of such purpose, or (3) making a material misrepresentation or omission concerning such assets. Court costs and reasonable attorneys’ fees can also be awarded to a defendant who successfully defends an action or a counterclaim brought pursuant to this section. Any court, including a probate court, may also order that such assets or proceeds from the transfer of such assets be held in constructive trust to satisfy such debt.
A nursing home facility that is owed applied income may also bring a civil action to recover the applied income. If a court determines, based upon clear and convincing evidence, that a defendant wilfully failed to pay applied income due and owing to a nursing home facility for more than 90 days after receiving notice , the court may award the amount of the debt owed, court costs and reasonable attorneys’ fees to the nursing home facility.
For more on this new cause of action, to see Public Act 13-234 – Click here