10:06am: Talkline with Hoppy Kercheval

Lawmakers fixing nursing home loophole in medical malpractice law

A Wall Street Journal article last fall named West Virginia as one of the states targeted by lawyers specializing in suing big nursing home chains.  The Journal reported that a small group of lawyers “pioneered the approach” and “have taken those tactics on the road” to states with older populations, like West Virginia and Pennsylvania.

“Major nursing home operators and industry groups say many of the lawsuits line attorneys’ pockets while doing little to improve the quality of care,” the Journal reported.  “They cite aggressive tactics by some law firms, such as drumming up clients by blanketing areas with ads citing health violations at individual nursing homes, and say a handful of recent landmark verdicts are driving up the cost of settling other suits that may have little merit.”

One of those landmark verdicts was in West Virginia in 2011, when a jury awarded damages totaling $91.5 million in the case of Dorothy Douglas. The 87-year-old woman, who suffered from Alzheimer’s and Parkinson’s disease, died a couple weeks after a short stay in the Heartland Nursing Home where she “became dehydrated, malnourished, bedridden and barely responsive.”

The State Supreme Court reduced the size of the verdict on appeal to $36.5 million, but the majority did not agree with the nursing home’s contention that all of the claims should have been covered by the state’s Medical Professional Liability Act (MPLA), which caps non-economic damages, like pain and suffering.

The West Virginia Legislature is changing that.  SB 6 expands the definitions of health care facilities to include all operations of nursing homes, and it eliminates the Court’s distinction between ordinary negligence and medical negligence.  The Court’s current interpretation of the law allows plaintiffs to sue for “ordinary negligence” damages, which are not subject to the MPLA.

Nursing home operators say the threat of huge judgments is driving up their liability insurance costs dramatically, while reimbursement rates from Medicaid and Medicare—the biggest payers for long-term care—are flat or falling.

Governor Tomblin’s proposed budget cuts $2.6 million for nursing home reimbursements. When the federal Medicaid match is applied to those state dollars, according to DHHR Secretary Karen Bowling’s budget presentation to the House and Senate Finance Committees, it amounts to $12.5 million in reduced payments to nursing homes.

Some companies are deciding to get out of the nursing home/long term care business because of lagging reimbursement rates and liability insurance rates.

The Journal reports, “In August, Canadian-owned Extendicare Health Services, Inc. said it would lease its 22 skilled-nursing homes in Pennsylvania, Delaware and West Virginia to a third-party operator. It cited a fourfold increase in liability claims in those states in recent years ‘despite a strong and improving quality record.’”

House Judiciary Committee Chairman John Shott (R-Mercer), during floor debate over SB 6, told of a long-term care facility in Bluefield that’s considering moving across the state line to Virginia where its liability insurance rates would be cut in half.

SB 6 does not change the caps on non-economic damages for pain and suffering, which are currently at $335,000 for an injury and $640,000 for death with an inflationary riser.  However, the bill adds an inflation factor for the trauma cap, which covers all damages in certain cases and is currently set at $500,000.  SB 6 still allows for damages for economic loss, such as wages and any medical care necessary, as well as punitive damages.

The Journal story concludes that West Virginia, Pennsylvania and Kentucky are “ground zero for the continuing tussle” over nursing home litigation.  That’s not where we want to be.  SB 6 is a fair attempt to balance the need to compensate victims and punish wrongdoers in cases of nursing home neglect or abuse, but also protect legitimate and necessary businesses from unpredictable verdicts.



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