Attempt to Force Children to Pay Father’s Hospital Bill Fails

JUNE 2, 2003 VOLUME 10, NUMBER 48

Are adult children liable for the medical care of their parents? Several states (not including Arizona) have laws that attempt to impose what is sometimes called “family responsibility” or “filial responsibility” on children for the care of indigent parents. A recent South Dakota case provides a little insight into such laws.

Before James Nelson died at McKennan Hospital in Sioux Falls, he incurred a bill of almost $75,000. McKennan submitted the bill to Medicare, which paid $15,657.85 and required that the hospital make adjustments of most of the rest of its charges. When the adjustments were completed a $42.73 claim remained against Mr. Nelson’s estate; when that amount was paid the hospital signed a release of any further claims it might have made against Mr. Nelson or his estate.

Unfortunately for the hospital, Medicare audited the payments on behalf of Mr. Nelson and noted that his “lifetime days” had already expired before admission to the hospital. As a consequence McKennan was not entitled to any payment from Medicare, and the agency simply reduced its next payment accordingly.

Since McKennan had already agreed not to pursue Mr. Nelson’s estate, it decided to seek reimbursement from his children. South Dakota law includes a provision requiring children to pay for their parents’ care, and so the hospital filed suit against Mr. Nelson’s three children.

Unfortunately for the hospital, South Dakota’s law requires children to pay for their parents’ care only if the parents are unable to pay for care themselves. Just eight days before Mr. Nelson’s death a pending personal injury lawsuit was settled by payment of $1.2 million into a trust for Mr. Nelson’s benefit; on his death, the remaining trust assets were distributed to his estate and ultimately to his children. He was not indigent, and his estate was sufficient to pay for his care.

McKennan then argued that principles of “equity and social policy” should be applied to prevent Mr. Nelson’s children from receiving his estate without having to pay for his medical care. The South Dakota Supreme Court rejected that argument, noting that the hospital’s “equity” argument was unsupported by any citations to legal authority. Accounts Management, Inc., v. Nelson, May 21, 2003.

Though “filial responsibility” laws exist in over half of the states, they are seldom invoked because both Medicare and Medicaid rules prevent efforts to seek additional payments in most circumstances. The Nelson case provides some insight into how changes in health care financing might affect families.

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