The State of Pennsylvania is racking up victories supporting the use of filial responsibility in resource recovery of Medicaid benefits. Future courts will likely point to the Second Circuit Court's decision in Eades v. Kennedy, PC Law Offices (U.S. Ct. App., 2nd Cir., No. 14-104-cv, June 5, 2015) as a peculiarly important case paving the way for greater reliance upon filial responsibility. Aside from the fact that the case concerned an effort to collect funds from a Medicaid recipient's family who were residents of another state, the court specifically rejected any claim that existing federal law preempts state filial responsibility.
The U.S. Court of Appeals held that a law firm that was attempting to collect a debt from a nursing home resident's family did not violate debt collection law when it filed a lawsuit against the family based on Pennsylvania's filial support law. Joni Eades' mother died owing the Pennsylvania nursing home she resided in around $8,000. The nursing home hired Kennedy, PC Law Offices to collect the debt from Ms. Eades and her father, who resided in the State of New York. Kennedy sent a letter to Ms. Eades, stating that she could be held liable for the debt under Pennsylvania's filial support statute. During a phone call with Ms. Eades, a Kennedy employee allegedly stated that if the debt was not paid, Kennedy would put a lien on her father's house and garnish her wages.
Kennedy filed a complaint against Ms. Eades and her father for failing to pay the debt. Ms. Eades and her father filed a lawsuit in federal court against Kennedy alleging that it violated the fair debt collection law. The district court granted Kennedy's motion to dismiss, ruling that it did not have jurisdiction over Kennedy and that Ms. Eades’ obligation to pay the nursing home was not a debt. Ms. Eades and her father appealed.
The U.S. Court of Appeals, Second Circuit, affirmed in part but remanded part of the case. The court held that while the court does have jurisdiction over Kennedy and while Ms. Eades' obligation to pay the nursing home was a debt, there was no conflict between the federal nursing home law and Pennsylvania's support law, so filing a lawsuit under the filial support law did not violate the debt collection law.
The court held that federal law did not preempt the Pennsylvania law. Eades argued that the federal Nursing Home Reform Act (NHRA), which prohibits nursing homes from requiring third party guarantees of payment, preempted the Pennsylvania law. The court disagreed:
"[T]he NHRA is not inconsistent with the Pennsylvania indigent support statute, which holds an indigent person’s spouse or child liable for the person’s maintenance or financial support, unless the spouse or child is financially unable to support the indigent person or meets other statutory exceptions. 23 Pa. Cons. State 4603(a). By its terms the Pennsylvania statute does not appear to condition the continuing care of the indigent person on a family member’s financial support. Thus, a nursing home can petition a court to order an indigent resident’s spouse or child to pay for the resident’s nursing home care pursuant to the state statute without violating the NHRA, as long as the nursing home refrains from conditioning the resident’s admission, expedited admission, or continued stay on a third party guarantee of payment. For these reasons, we conclude that the indigent support statute does not conflict with the NHRA."
The court did remand the case to the district court to consider the the issue of whether the phone call from the Kennedy employee to Ms. Eades violated the debt collection law.
For the full text of this decision, go here.
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