NHS officials pledged today that lessons would be learned after it emerged that three families have won back almost £350,000 they were charged for their relatives' care.
The news was also welcomed by Age Concern, which encouraged anyone who believes they have been unfairly treated by the NHS to fight for their rights.
Among the three families is that of Judith Roe, who died aged 74 last October after developing Alzheimer's disease.
The pensioner, from Worcester, was forced to sell her home of 30 years for £200,000 to pay the £600-a-week nursing home fees. Her son Richard branded the NHS's treatment of his mother as scandalous.
Mr Roe, from Telford, Shropshire, wrote dozens of letters during his five-year battle with his mother's local NHS trust, which refused to pay for care on the grounds that her condition was not health-related.
But the Health Service Ombudsman has now ordered NHS Worcestershire to reimburse the fees. In a statement, chief executive of NHS Worcestershire Paul Bates said: "Decisions around eligibility for continuing NHS care are extremely complex and difficult even though we have national guidance to assist us.
"The line between the need for healthcare and social care is a very thin one indeed, but the impact for the individual is the difference between free care and care which is means-tested.
"We would not wish to see Mr Roe's experience repeated and there are clearly lessons for us to learn.
"Mr Roe pursued his claim that the NHS should have funded his mother's care and all the formal procedures put in place to allow families to do so were followed.
"This has led to Mr Roe receiving very significant financial recompense from the Primary Care Trust."
Mr Roe told the Berrow's Worcester Journal: "All the time we were told we were wrong while believing we were right. We became very angry because the primary care trust was very arrogant and unhelpful.
"I want anyone else going through a similar experience to know they may be entitled to care. Even if they're being told they're not entitled, they should fight for it."
In two other cases highlighted in national newspapers, bereaved families received won back £51,000 and £165,000 from the NHS in Cheshire and the North West.
Andrew Harrop, head of policy for Age Concern and Help the Aged, said: "The system for deciding where the line is drawn between free NHS continuing care and paid-for social care has been a mess for years.
"Even though there were changes to try to clarify the system, we are still very concerned that older people may wrongly be forced to pay for their care when it should be free.
"We strongly encourage anyone who believes they are unfairly missing out on NHS support to fight for their rights."
Mr Harrop also said there were huge regional variations between each primary care trust, which showed that the NHS continuing healthcare framework was not being implemented consistently.
Mr Roe, whose family is reported to have clawed back around £130,000 from the NHS, said: "The way they behaved was scandalous. They did not carry out their duties properly."
A Department of Health spokesman said: "The Government wants to make the system as fair as possible for everyone.
"In 2007 we published the first national guidance for a single system for assessing eligibility for NHS continuing care regardless of location, diagnosis or personal circumstances.
"Before 2007, strategic health authorities all had their own criteria. Our guidance was updated and refined in 2009 and now the overall number of people getting continuing care has risen from just under 31,000 at the end of March 2007 to around 46,599 at the end of March 2009."