New York Attorney General Letitia James is investigating medical debt collection practices at politically connected law firm Abrams Fensterman, according to court testimony and a published report. The probe is scrutinizing whether the firm violated state and federal laws by suing friends and relatives of nursing home residents, who, in many cases, did not personally owe the debts.
Driving the news:
- During a court hearing yesterday, attorneys for James’ office confirmed that the firm is the target of an ongoing investigation.
- The investigation centers on the firm’s “systematic practice” of helping nursing homes recover unpaid bills by suing third parties — such as family members authorized to make decisions for residents, even after residents had died.
- The attorney general’s office argues that such actions may violate state consumer protection statutes and the Fair Debt Collection Practices Act.
Background:
- In June 2024, the AG issued a subpoena seeking records on Abrams Fensterman’s lawsuits, including policies, attorney responsibilities, and case samples.
- The subpoena was tied to a specific case, Parker Jewish Institute for Health Care and Rehabilitation v. Mays, where the firm pursued a resident’s alleged debt against a third party based solely on their signature on an admissions agreement.
- Federal law bars nursing homes from making third parties personally liable for residents’ debts as a condition of admission or continued stay. The AG alleges Abrams pursued judgments anyway, often for the full amount of a resident’s bill, regardless of whether the third party had access to the resident’s funds, according to court records.
State’s position:
- The AG’s Bureau of Consumer Fraud and Protection is leading the investigation, which is a shift from prior nursing home probes that were handled by the Medicaid fraud unit.
- In filings, the AG argues that Abrams’ lawsuits may constitute “fraudulent and deceptive business practices” under state law and unlawful collection activity under federal law.
- Officials emphasized that at the investigative stage, subpoenas require only a “reasonable relation” to potential violations of law.
Abrams Fensterman’s response:
- The firm has denied wrongdoing and sought to quash the subpoena, first filing in Nassau County before the case was transferred to Manhattan Supreme Court.
- Alyssa Friedman, a partner at the firm, told the court there was “no fraud or illegality to investigate,” urging the judge to block the subpoena, according to the report.
