To Collect on Bills, Some Nonprofit Nursing Homes Seize Control of Residents

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Nonprofit nursing homes

January 26, 2015; New York Times


On the heels of the scandal about nonprofit hospitals’ aggressive collections practices, which can destroy the lives of poor patients, comes this story about nonprofit nursing homes that seize the patients themselves in an effort to collect their bills. We hope that readers will help us call this practice to the attention of legislators concerned with hospital collections.

Ninety-year-old Lillian Palermo is a resident at the nonprofit Mary Manning Walsh Nursing Home. Recently, after protesting about changes in copayments and the quality of care, her husband, Dino Palermo, who visits daily and is described as devoted, found a six-page petition for guardianship waiting on her bed. The petition asked the court to give a stranger legal power over Mrs. Palermo and her finances.

Researchers at Hunter College found that this type of action has become routine. In a random sample of 700 guardianship cases filed over the last ten years in Manhattan, 12 percent were found to have been brought by nursing homes. Lawyers familiar with the guardianship process say that these petitions are primarily used by nursing homes as a means of bill collection.

“It’s a strategic move to intimidate,” said Ginalisa Monterroso, who left her employment at Mary Manning Walsh in 2012. “Nursing homes do it just to bring money.” She called the practice cruel.

Attorney Brett D. Nussbaum, who represents a number of nursing homes including Mary Manning Walsh, said, “The Palermo case is no different than any other nursing home bill that they had difficulty collecting.” Nussbaum says he has brought 5,000 guardianship cases in his 21 years of practice. “When you have families that do not cooperate and an incapacitated person, guardianship is a legitimate means to get the nursing home paid.”

Though many judges do approve such petitions, Alexander W. Hunter, Jr., a longtime State Supreme Court justice in the Bronx and Manhattan, has strong opinions about the practice. In response to two guardianship cases in 2006 and 2007, Justice Hunter required nursing homes bringing such actions to bear the legal costs, ruling that these kinds of petitions to collect funds was not part of the legislature’s intent when it enacted Article 81 of the Mental Hygiene Law. In a case involving the Hebrew Home for the Aged last year, Justice Hunter did appoint a guardian, but he directed the guardian to investigate whether there was reason to refer the case for criminal prosecution for financial exploitation.

Here is the way the case is described by the New York Times:

“The decision describes a 94-year-old resident with a bank balance of $240,000 who had been unable to go home after rehabilitative treatment because of a fire in her co-op apartment; her only regular visitors were real estate agents who wanted her to sell. After Hebrew Home’s own doctor evaluated her as incapable of making financial decisions, the decision says, the nursing home collected a $50,000 check from her; it sued her when she refused to continue writing checks, then filed for guardianship.”

In the Justice’s decision, he wrote:

“It would be an understatement to declare that this court is outraged by the behavior exhibited by the interested parties—parties who were supposed to protect the person, but who have all unabashedly demonstrated through their actions in connection with the person that they are only interested in getting paid.”

—Ruth McCambridge: 


  • Elaine Renoire

    Guardianship was created to “guard” incompetent people and “conserve” their assets – not as a convenience for nursing homes or hospitals nor as a tool to be used in retaliation towards family who complain about care issues.

    Join the national movement for reform of unlawful and abusive guardianships and conservatorships. Join NASGA!

  • Roger Garay

    As a business person I can sympathize with the service provider wanting to collect their just fees. This, however, would be analogous to a Landlord keeping you imprisoned in the home you are renting because you have not paid the rent. In this industry, the patient/guest often assigns to the Home their Social Security or some other Retirement Plan benefit to the the Home. Of course the business/Home has a right to collect for services rendered. This, however, seems to go well beyond that and perhaps the patients/guests have account balances but not pensions. I would expect that if I were placing Grandma in their care that I would have to sign documentation making me ultimately liable (like co-signing on your teenager´s car loan) and that would give the Home recourse.

  • Paul Jeddeloh, Jeddeloh & Snyder, PA

    I am an attorney in Minnesota who routinely handles guardianship and conservatorship matters (guardian is day-to-day needs and conservators handle money). There are some nursing homes in my region who contact me to help establish guardianship. Typically, the person has no family (or the family has no contact), the ward is unable to make medical decisions and the person is or will be receiving Medical Assistance/Medicaid to cover their long-term care. A professional guardian, under contract with the local county Human Services’ Office, is utilized. For matters as discussed in the article, typically there is a Vulnerable Adult referral to County Human Services and they either seek guardianship and conservatorship or directly refer it for criminal investigation. Luckily, I have not seen the problem described in the article in my area!