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Siblings Joe Shook, Margaret Rennecke and Becky Pedersen hold a photograph of their father, Durant "Phil" Shook, who died at the Augusta Place nursing home in Bismarck on Jan. 31, 2017, as they stand in front of the legislative wing of the state Capitol. The siblings want legislators to change North Dakota's filial support law after the nursing home filed a lawsuit against them seeking more than $43,000 in unpaid bills after their father's death. 

A bill has been introduced that would update an antiquated state law that allows nursing homes to sue children for their parents' unpaid bills.

Sen. Dick Dever, R-Bismarck, is the chief sponsor of Senate Bill 2225, which would revise language of the state law, called the filial support law, which requires children to support their indigent parents. The bill had a hearing on Tuesday before the Senate Human Services Committee.

The bill amends the law, but doesn't repeal it. It also specifies that a child, as defined in the law, is older than 18.

North Dakota's filial support law was adopted in 1877, before North Dakota became a state, and is modeled after England's Elizabethan Poor Laws of 1601.

The bill sets out four requirements that need to be met in order for a nursing home, or creditor, to go after a child for a unpaid bill. This includes when a parent transfers assets or income to a child, called a disqualifying transfer, and then the parents don't qualify for Medicaid. Also, under the bill, the disqualifying transfer must have occurred within five years of the parent receiving "necessary health services," including medical and nursing home care.

The bill also provides another set of circumstances which the bill's co-sponsor, Rep. Lawrence Klemin, R-Bismarck, called a "bad actor situation," or when a child acts in "bad faith by misappropriating, misusing or diverting income or assets to prevent or avoid payment for necessary health services." This act of "bad faith" also must occur within five years of receiving health services.

Shelly Peterson, president of the North Dakota Long Term Care Association, and several nursing home representatives gave testimony in support of the bill.

Peterson said, in the past decade, more nursing homes are using the statute against children in response to the 2005 federal Deficit Reduction Act, which made it harder for the elderly and disabled to qualify for Medicaid.

"We believe SB2225 appropriately updates a 142-year-old statute," Peterson said.

Some nursing home representatives said the statute has been an effective tool used against children who refuse or delay helping their elderly parents apply for Medicaid assistance.

"We use the statute as a threat to encourage a child to work with the county to get the (Medicaid) application done, or pay the amount that is ruled as the disqualifying transfer," Shawn Stuhaug, president of Fargo's Bethany Retirement Living, said Tuesday.

Daniel Kelly, CEO of McKenzie County Healthcare Systems, said the law gives leverage to nursing homes, who are often the ones who get stuck with unpaid bills.

Margaret Rennecke and her sister, Becky Pedersen, gave testimony in support of the bill. In 2017, Rennecke, Pederson and two other siblings received a letter in the mail from Augusta Place informing them that the nursing home was suing them for more than $43,000 in unpaid bills related to their late father's seven-month stay at the facility.

The siblings said they didn't receive their father's income or assets and met with a lawyer, who informed them of the state's filial support law, which left them "shocked and scared," Rennecke said.

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Margaret Rennecke and her sister, Becky Pedersen (not pictured), testify in support of Senate Bill 2225, which would revise the state's filial statute that requires children to support their indigent parents.

The siblings provided affidavits to the nursing home's attorney stating that they received nothing of value from their father's estate.

"Even after the nursing home saw that we received nothing from my dad's estate, they were (not only) going to still be pursuing us children, but then they asked for the information about our spouses and their incomes, also," Rennecke said.

The Senate Human Services Committee did not take action on the bill on Tuesday.

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(Reach Blair Emerson at 701-250-8251 or Blair.Emerson@bismarcktribune.com)

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