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This article explores the past and current landscape of patient rights laws and professional liability in nursing homes. It discusses the changes in allegations, reimbursement, government regulation, and state laws. It also highlights the challenges faced by nursing homes in maintaining quality of care.
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Patient Rights Laws and Nursing Home Professional Liability Theresa W. Bourdon, FCAS, MAAA Aon Risk Consultants, Inc. September 11, 2001
Past Vs. Present • Pre - 1990 • Allegations: limited • Personal injury • Wrongful death • Damages: minimal • Below cost to litigate • Low value attached to elderly life • Causation of injury difficult to identify
Past Vs. Present • Post- 1990 • Allegations: expanded • Intentional fraud • Breach of contract/deceptive trade practices • Negligent hiring • Damages: staggering • Litigation costs reimbursed in some states • Punitive damages • Patient rights emphasis
Change Catalysts • Change to Medicare/Medicaid Reimbursement • Patient advocates • Increased state and federal regulation • Plaintiff lawyers new theories of liability • Bad public image
Reimbursement Changes • Reduced Medicare Reimbursements • Effective July 1998 • Pre 7/98 - Actual cost reimbursement • 7/98 - Transition to prospective pay system
Prospective Pay System • Per diem reimbursement • 44 categories of patients • Drastic underpayment for • respiratory therapy • wound care • prescription drugs • artificial limbs
Medicare & Medicaid in LTC • 1,836,657 Certified beds in U.S. • 56,183 Medicare only reim. • 1,034,882 Medicaid only reim. • 618,556 Both • 1,709,621 Some form of Gov’t aid Source: American Health Care Association (ahca.org)
Government Regulation • Nursing Home Reform Act • False Claims Act • State laws • Federal reimbursement surveys • General Accounting Office report
False Claims Act • Individuals with knowledge of anyone taking federal money under false pretenses can bring suit on behalf of the government • Plaintiff recovery up to 24-30% of gov’t recovery • Civil cases charging inadequate care
Nursing Home Reform Act • 1987 • U.S. Congress • Response to allegations of neglect & abuse • Applies to Medicare & Medicaid participants • Establishes minimum quality of care requirements • Violations apply at state and federal level
State Laws • Elder laws • Protect against physical & emotional abuse & neglect • Criminal penalties • Imprisonment • Fines • Recoveries • Pain & suffering • Punitive damages • Cost of investigation & attorney’s fees
Florida • Patients Bill of Rights - Statute 400.022 • Guarantees the patients rights to be • informed • provided adequate care • treated with dignity • Violation remedies • actual damages • punitive damages • attorney’s fees
Texas • Texas’ Residents’ Bill of Rights (Chapter 247 of the Texas Health and Safety Code • 14 rights itemized • safe and decent living environment • considerate and respectful care • dignity and individuality • 1995 Texas tort reform punitive cap not effective to claims against the elderly
California • Elder Abuse and Dependent Adult Civil Protection Act
Reimbursement Surveys • HCFA cracking down on LTC industry • March 1999 Internet site • 170,000 facilities • Results of surveys required for reimbursement program • 1 in 4 nursing homes tagged with a deficiency
Surveys Change Plaintiffs Strategies • Causation of injury tough to prove • Earnings potential non-existent • Surveys used to allege negligence per se • Evidence of institutional negligence • Support for punitive damages • Plaintiff lawyers now interested
Image Problems • Medicare cuts: denying admissions • Fraud & abuse allegations • Medicare & Medicaid inappropriate billings • Civil & criminal • Violation of patient rights allegations • Multi-million dollar judgements • Focus on inappropriate care
Expectation/Funding Mismatch • Government funding patient care system • per diem payment schedule • limited resources to improve quality of care • Tort system driving quality of care expectations • most jury verdicts favor plaintiff • slips/falls, decubitus ulcers imply negligence
Aon Long Term Care Database • Operators of Skilled Nursing Facilities • Multi-Facility • Multi-State • For-Profit • Primarily Skilled Nursing Beds • 336,000 Licensed Beds Countrywide (20%) • 33,000 Licensed Beds in Florida (40%)
Long Term Care General and Professional Liability Percentage of Losses Reported by State
Long Term Care General and Professional Liability Annual Increases by State
Florida Tort Reform Initiatives • FHCA funded an actuarial study on the rising cost of patient care liability • 1999-2000 Florida Legislative session resulted in the creation of a Task Force to investigate the long term care industry crisis • Task Force issued a report in late 2000 with draft language for proposed tort reform • 2000-2001 Florida Legislative session passed a nursing home reform bill including tort reform
Florida 2001 Legislative Changes • Punitive Damage Caps • 1st tier: Greater of 3 x Compensatory or $1M • 2nd tier (primarily financially motivated): Greater of 4 x Compensatory or $4M • 3rd tier (intentional harm): no cap • Statute 400 attorney fee provision repealed for injury/death cases; capped at $25K for resident rights cases
Florida 2001 Legislative Changes • Statute of limitations reduced from 4 to 2 years (4 yrs for repose; 6 yrs for fraudulent) • Strict liability/negligence per se replaced with negligence standard • reasonable person std for non-prof staff • professional standard for nursing staff • No cap on non-economic damages
Florida 2001 Legislative Changes • $60M state funding for improved care • increase staff hours from 1.7 to 2.9 by 2003 • internal RM department • state reporting of residents’ injuries
Texas 2001 Legislative Changes • Restricts use of survey documents as evidence (direct testimony allowed) • For-profit homes eligible for JUA coverage • Requires $1M/$3M of insurance
Activity in Other States • Alabama deflected a Wilkes attempt to broaden patient rights in 2000 • MS, PA, CA Healthcare Associations are pro-actively taking steps to avoid a Florida patients rights law
Reserving Issues • Know the provider characteristics • State (affects freq & sev) • Profit Status (affects freq & sev) • Size/Single vs. Mutli-facility (affects freq) • Medicaid funding (affects freq) • Get your arms around frequency • Severity less correlated to type of provider than frequency