When a loved one moves into a nursing home, families often pay a hefty upfront deposit. These fees can range from a few hundred to several thousand dollars, depending on the facility and location. But what happens if the resident moves out, passes away, or switches to Medicaid? Many families assume the deposit is nonrefundable—but that’s not always true. With the right approach, you can often recover part or all of the money without hiring a lawyer.
Know What You Signed
The first step is to review the admission agreement. This document outlines the terms of the deposit, including whether it’s refundable, under what conditions, and how to request it. Some facilities label deposits as “security,” “reservation,” or “community fees”—each with different rules. Look for language about cancellation, discharge, or death. If the contract is unclear, ask the facility for a written explanation. Understanding the fine print is key to making a strong case.
Timing Matters
Refund eligibility often depends on when and why the resident left. If the move-out was voluntary and notice was given, you may be entitled to a full or partial refund. If the resident passed away, some contracts allow for prorated returns or estate reimbursement. Medicaid transitions can also trigger refund clauses, especially if the deposit was meant to hold a private-pay spot. The sooner you act after the change, the better your chances of recovering funds.
Put Your Request in Writing
Verbal requests rarely get results. Draft a clear, polite letter to the facility’s billing department or administrator. Include the resident’s name, dates of stay, reason for departure, and a copy of the original agreement. State that you’re requesting a refund based on the terms outlined and ask for a timeline. Keep copies of all correspondence and follow up regularly. Written communication creates a paper trail—and shows you’re serious.
Use State Resources
Every state has an ombudsman program that advocates for nursing home residents and their families. These offices can help resolve disputes, clarify contract terms, and pressure facilities to honor refund policies. They’re free to use and often more effective than legal threats. You can also contact your state’s Department of Health or Aging Services for guidance. These agencies oversee nursing home regulations and may intervene if policies are being violated.
Escalate If Needed
If your request is denied or ignored, escalate calmly. Ask to speak with the facility’s administrator or financial officer. Reference state laws or ombudsman recommendations. If necessary, file a complaint with the state licensing board or Better Business Bureau. You can also leave a public review to prompt action—many facilities respond quickly to online feedback. Legal action should be a last resort, but small claims court is an option if the amount is significant and the contract supports your claim.
Watch for Hidden Fees
Some facilities deduct cleaning, administrative, or “processing” fees from refunds. These charges may be legitimate—but they must be disclosed in the contract. If you’re surprised by deductions, ask for an itemized breakdown. Challenge any fees that weren’t agreed to in writing. Transparency is your right, and facilities must justify their charges.
Protect Yourself in Future Agreements
If you’re considering a new nursing home, ask about deposit policies upfront. Request a copy of the contract before signing and review it with a trusted advisor. Look for clear refund terms, cancellation clauses, and Medicaid transition language. Avoid facilities that refuse to provide written policies or seem evasive. A little diligence now can prevent financial headaches later.
The Bottom Line
Nursing home deposits aren’t always final. With the right steps, families can often recover funds without hiring a lawyer. Start by reviewing the contract, making a written request, and using state resources. Escalate if needed, and protect yourself in future agreements. In a system that’s often confusing and costly, knowledge is your best tool—and persistence pays off.
Have you successfully recovered a nursing home deposit? Share your experience or tips in the comments—we’d love to hear how you did it.
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Teri Monroe started her career in communications working for local government and nonprofits. Today, she is a freelance finance and lifestyle writer and small business owner. In her spare time, she loves golfing with her husband, taking her dog Milo on long walks, and playing pickleball with friends.
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