My brother was in charge of our parent's finances while they were in an assisted living facility and on medical assistance. Since then, my father has passed away and my mother has been moved to a nursing home and is still on Medical Assistance. The Assisted Living facility claims my parents owe them over 8K in unpaid services. There was no malicious intent by our brother, and we have asked to see all past statements by the facility to prove the debt, however, the bottom line is there is no money to pay the debt if in fact my parents owed it. How do we proceed?
Carefully review AL admissions agreement.
Most AL is private pay. If only your parents signed the contact, the debt is 100% theirs. If they are now in a NH on Medicaid and their monthly income is SS & other protected income (most civil service, state & federal retirements), then NH is getting this $ as required by medicaids co-pay or "SOC" requirement. There will be no funds the AL or it's debt collection agency can get as NH is being paid first. They can send letters, make demanding Phone calls, etc but no recovery can be done. If parents have a home, there could be a lein placed on it from a judgement, but states MERP program is going to already have it's own place card against the house. Dads share of the 8k is beyond over, as he is dead. Basically AL is S***out of luck. Debt collectors will continue to get money though.
BUT if you or bro signed off on admissions contract, the AL can come after you all for the payment and they likely will. Even if dad has died. What to do, well it depends on your situation. Some folks are judgement proof so those can let it ride out, still a bother with debt collectors but nothing that can ever be done. But if a collection action will affect your job, credit needs, etc then you will have to pay it but try to negotiate it down at least by 50%.
? for you, so were your parents on a medicaid waiver for paying for the AL room & board costs when they were in AL? You say they were on medical assistance. That usually means Medicaid. Now most AL are totally private pay but a few do participate in waiver programs if your states Medicaid program does waivers. If so, then the AL would have accepted the waiver payment WITH your parents copay as payment in full. Did your parents (or your brother as he manages finances for parents) do the required by medicaid waiver program copay or "SOC" of your parents monthly income to the AL?
If you didn't sign on the dotted line, you are fine (in as not your debt).
What I see as the bigger issue in all this is IF bro & you did not understand the requirement of the co-pay or "SOC" (share of cost in Medicaid speak) in order for your folks to be compliant for the requirement of participation in Medicaid. This comes up over & over on this site and soooooo often family is totally surprised that mom's little SS check now has to be paid to the NH and just what are they supposed to do to pay for mom's things (like house, car, credit cards, insurance payments, you fill in whatever costs for mom's old preNH or preAL life)??? Well basically if you want to keep mom's house, car, insurance then family will have to pay for all the costs on those till mom dies and then till probate is settled to ensure recovery of the costs paid. For a house, there will be MERP to deal with as well. But if family wants to and has the ability to pay for things to keep them going, they can pay for whatever and then deal with all this as debts against the estate. But parents monthly income has to be paid to the facility as per Medicaid. Like for my mom, she got 800 in SS and 1K in federal retirement, so $ 1800 a mo of which $ 1740 HAD TO BE PAID to her NH as the SOC. The remaining $ 60 a month is called the PNA - personal needs allowance and that is all they get to keep. All the $ amounts vary by state too. TX PNA is $ 60.
Medicaid rules are very precise - they basically have to be impoverished and for couples I think that means no more than 3K(?) in assets and then whatever income ceiling your state has set. The whole approach for couples & Medicaid is pretty complicated as community spouses can keep more assets but once they go into a facility, then it changes the day of admission. I'm most familiar with widow/widower Medicaid as that is what I dealt with for mom & MIL - none of this is simple but for individuals it's pretty cut & dry on the $ amounts.
But I digress, what can be a bigger problem is that IF your brother did not pay the required to be compliant for Medicaid SOC, then the Medicaid agreement can be voided. The AL can take the position that because of this, they will go after you all personally for the private pay costs of care which could be 3X - 4X the amount that Medicaid reimburses; they return the $ the state paid and go after you to pay. It's the nuclear option for the AL - personally I don't think they would but they can use this threat to make someone in the family come up with the missing SOC; if family can be shown to have signed off to be responsible either with the AL admissions contract or Medicaid application, they signed off to be held responsible.
Clearly speak with your bro on all this. Find out where the $ that your parents got from SS & retirement or any other monthly income went. Perhaps it did get paid to the AL and their bookkeeping is wrong. My mom's NH#1 had a biz office that was beyond incompetent & that plus a huge change in what NH#1 was initially for staffing, well I got mom moved at month 10 to NH#2. Mistakes get made. Check with bro to see if the mistakes were on your side of all this first.
& make sure bro is paying the SOC every mo for mom at the NH! Good luck.