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Nursing Home Industry Campaigns to Limit Victims' Rights
California's nursing home industry has joined a carefully orchestrated national campaign to limit the rights of abuse and neglect victims in nursing home abuse lawsuits. The California Association of Health Facilities (CAHF) lobbies for the for-profit nursing home industry, and the California Association of Homes and Services for the Aging (CAHSA) lobbies for non-profit nursing homes and residential care homes for the elderly. Under the guise of an "insurance liability crisis," both organizations have released reports in recent months offering their strikingly similar views of their latest "crisis." In fact, the CAHSA report quotes some recommendations verbatim from the for-profit industry article.
Portraying nursing homes as innocent bystanders in a war between greedy plaintiffs and their lawyers and the insurance industry, both reports fail to even mention the real culprits in the rise of nursing home litigation: abusive practices and negligent care in too many facilities.
Make no mistake about it; this is only the first missile in the upcoming battle by the nursing home industry to convince California lawmakers of two things:
The Florida Specter
Both the CAHF and CAHSA articles cite Florida as the poster child for what could happen in California if things go unchecked. A number of highly publicized lawsuits in Florida that resulted in high jury awards and settlements also resulted in a sharp increase in liability premiums for Florida nursing homes, with some carriers pulling out altogether. Florida's nursing home industry, joining forces with lobbyists with close ties to Governor Jeb Bush, was able to persuade Florida's legislators to pass a law that includes $77 million in new funds for providers and severely limits the rights of abuse victims in nursing home lawsuits. Texas and Louisiana are considering similar laws. Is it any wonder they use Florida as an example?
However, other than the palm trees, California is nothing like Florida. California already has stringent caps on medical malpractice awards, a stringent evidence code and a burden of proof in elder abuse cases so high that few of the thousands of abuse and neglect cases are ever filed, much less litigated.
Civil Liability Crisis or Crisis in Care?
There is no question that insurance premiums for nursing homes in California have increased. However, there is hardly a crisis. Many insurance companies are still underwriting policies for nursing homes in California. According to several brokers, premiums have increased from a range of $125-150 per bed a year ago to $175-$200 per bed in 2001. Compare this with some states where the average premium is $400+ per bed.
Smart carriers are being more selective and looking at claims history and patterns and practices from a risk management perspective. Given the high-risk practices of some facilities, it's a surprise that premiums aren't even higher. Even a schoolchild knows that high-risk behavior results in consequences. Your premiums and those of any industry would increase if you engaged in the type of behavior practiced by too many California nursing homes:
What They Really Want
Generally, the nursing home industry wants the same thing they always want: more money, less accountability and fewer rights for residents. What they really want is the following:
Profit v. Non-Profit
CAHSA, the non-profit industry association, should be ashamed for letting itself be used by the for-profit nursing home industry. CAHSA members are not the ones who are primarily responsible for the increased incidents of abuse and neglect and resulting lawsuits. Statistically, the non-profit nursing home providers in California have far fewer deficiencies, citations, enforcement actions and consumer complaints. Yet the non-profit providers share the risk and the consequences of the poor practices and poor care perpetuated by the for-profit chains. Diminishing the rights of abused elders and disabled residents will only serve the goals of the for-profit industry. CAHSA does a disservice to its members when it fails to distinguish the quality of non-profit facilities and continues to serve as the lapdog of CAHF.
What Needs to be Done
1. Avoid Claims: According to one insurance executive, the facility's claims experience and facility practices are the primary factors used in determining whether or not it can get insurance and how much it will cost. What does this mean in layman's terms? It means that facilities that avoid claims by following the law, providing decent care and not neglecting and abusing residents can get liability insurance, and they can get it at lower rates than those who don't.
According to one industry underwriter, about 20% of their nursing home claims relate to skin conditions (usually bedsores), but approximately 80% of the dollars are paid for those claims. Approximately 60% of the claims are related to falls. It should follow then that smart facilities will institute decubitus prevention and fall prevention programs with aggressive assessment and intervention training and practices.
2. Risk Reduction Programs: Instead of spending millions of dollars to lobby legislators to curtail the rights of abuse victims, the nursing home industry should spend those dollars to establish a Risk Reduction Program and work with the insurance industry to identify high-risk facilities, intervene and provide technical assistance to improve facility practices. Insurance companies always spread the risk of liability. Thus, a handful of high risk, frequently sued facilities or chains will increase premiums for all.
About a year ago, CANHR staff met with some risk management specialists from a large insurance company whose clients included a number of nursing homes in California. They expressed their frustration with the unwillingness of some providers to institute even basic risk management practices, despite prior claims. One facility was sued after a resident, suffering from dementia, wandered out the open front door and was hit by a car. When the risk management specialist recommended a wanderer alert system, the facility refused. Another facility, facing several lawsuits involving severe bedsores, refused to institute a decubitus prevention program. Of course their premiums increased.
Instead of excusing abuse and neglect and blaming the victims, it's time California's nursing home industry put pressure on substandard providers to clean up their acts or leave the business.
3. Non-Profit Preferred Insurance Pool: Ohio's non-profit industry association has organized a preferred insurance pool with a carrier and a broker who is employing retired RNs to conduct the underwriting process. If accepted into the pool, the price of insurance is set at $100 per bed guaranteed for three years. Texas has allowed non-profit nursing homes to apply for coverage through the medical liability joint underwriting association.
4. Prohibit Non-Disclosure Agreements: Instead of tightening non-disclosure, California should open the process by prohibiting such agreements. The public, the insurance industry and the providers should all be aware of what types of claims are made, how much is being paid for such claims and who the defendants in these lawsuits are. Only then will we have a realistic picture of the true price of substandard care.
Assemblywoman Helen Thomson (D-Sacramento), Chair of the Assembly Health Committee, has already fallen for the industry's ploy. Writing to California's Insurance Commissioner, she bemoans the sharp increases in premiums for a retirement care facility in her district that includes a nursing home section, because the facility had no prior claims. What the facility and the industry forgot to tell the Assemblywoman is that, while the facility may have escaped lawsuits, they compiled a total of 47 federal deficiencies over the past two years. In their February 2000 survey, they compiled 25 federal deficiencies, 5 of which caused actual harm to some residents and one deficiency caused immediate jeopardy. These are the most serious categories of deficiencies. This is no doubt why their insurance premiums increased.
In 1999, the nursing home industry convinced California legislators that there was a "bankruptcy crisis." Of course, none of the for-profit chains that filed for Chapter 11 bankruptcy went out of business; several ended up repaying the federal government hundreds of millions of dollars in Medicare fraud claims; and several are once again making unprecedented profits.
In 2000, they convinced the legislators and the Governor that the "staffing crisis" wasn't their fault and that only more taxpayers' money and more flexibility would resolve the crisis. The result: $450 million in additional state and federal Medi-Cal dollars for reimbursements and another $8 million a year for "Quality Awards" to nursing homes funded by the taxpayers.
Now another "crisis"and once again elderly and disabled victims of abuse and neglect could be the recipients of California legislators' notorious disregard of the facts in deference to the nursing home industry.