A Devastating Practice In Debt Collection

When Lillian Palermo became incapacitated at age 80, her husband and power of attorney regularly rolls his wife’s wheelchair at a nursing home in Manhattan.  Yet last summer, after Mr. Palermo disputed nursing home bills that doubled Mrs. Palermo’s copays and complained about employees who dropped his wife on the floor, Mr. Palermo was shocked to find a guardianship petition filed by the nursing home, asking the court to give a stranger full legal power over Mrs. Palermo.

Few people are aware that a nursing home can take such a step.  However, the growing practice has become routine, illustrating the power nursing homes wield over residents and families amid changes in financing of long-term care. 

In a random sample of 700 guardianship cases filed in Manhattan over a decade, researchers found that more than 12 percent were brought by nursing homes.  Lawyers and others agree that nursing homes primarily use such petitions as a means of bill collection.  At least one judge has ruled that the tactic is an abuse of the law, but the petitions force families into costly legal ordeals. 

While it is a drastic measure, nursing home lawyers argue that using guardianship to secure payment for care is better than suing an incapacitated resident who cannot respond. 

See Nina Bernstein, To Collect Debts, Nursing Homes Are Seizing Control Over Patients, The New York Times, Jan. 25, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

Special thanks to Lewis J. Saret (Attorney, Washington D.C.)  for bringing this article to my attention.