Accountability

Here is a link to The Frederick News-Post which had a terrific op-ed by Katherine Heerbrandt about accountability and the nursing home industry.  The editorial is below:

Nursing homes are places where residents go about the business of wrapping up their lives or recuperating from illness, so it's not surprising that many of us have an aversion to them. Perhaps we see a future we don't want to contemplate.  But as baby boomers age, living out our golden years in a long-term care facility is a real possibility. The size of the disabled older population who will need assisted or nursing home care will grow by more than 50 percent between 2000 and 2040, according to the Urban Institute.

Entrepreneurs are looking at long-term care facilities as good investments. But as private equity investors flood into the nursing home business, "it's become harder and harder for families, regulators or prosecutors to identify the right individual or business entity to hold accountable for bad care," Janet Wells, public policy director of National Citizens' for Nursing Care Reform, said in an interview.

"The Office of Inspector General says it has found as many as 17 limited liability companies in the ownership and operations of a single facility," Wells said. "Most of these companies are making profits from the business, but they can't be held accountable by anyone for what happens to an individual resident."

This trend, she said, triggered a transparency bill this year and is part of the controversial health care reform legislation currently before Congress. A similar bill failed last year, and compromises were made. The bill currently before the House requires Nursing Home Compare (Medicare.gov/NHCompare/home/asp) to report the number of adjudicated criminal violations by facilities or crimes committed by their employees. States will also have to post survey reports online so consumers can read the inspectors' findings.

It's an uphill battle for advocacy groups. Nursing home lobbyists have much deeper pockets. "The nursing home industry is extremely powerful," Wells said. "And although it claims it can't make a profit from operating nursing homes, spends hundreds of thousands of dollars on campaign contributions and lobbying."

Lobbying, it seems, is a recession-proof profession. In the past decade, nursing home lobbyists' spending has risen from $25 million to $100 million, according to opensecrets.org, maintained by the Center for Responsible Politics.

Tyonja Bathgate became an unwilling advocate for nursing home residents' rights when her husband, Colin, moved to a local long-term care facility two years ago, and she worked with Delegate Sue Hecht on a bill to allow cameras in nursing homes. That bill failed this year.

Based on her experiences, Bathgate supports any legislation that will make nursing home operators more accountable and their operations more transparent.

Even if you or a loved one is not in a nursing home, she said, you are still affected by this legislation.

"Where do you think Medicare/Medicaid comes from? Those are tax dollars and nursing homes shouldn't be able to hide behind LLCs, or to spend millions on lobbyists. That's ridiculous," she said.

She's right. Why shouldn't the facilities entrusted with caring for our nation's chronically ill and elderly be held accountable for how they run their businesses?

For sample letters to your representatives and more information on the details of the nursing home transparency legislation, visit nccnhr.org.
 

How nursing homes avoid responsibility for neglect and abuse

Most of the information in this entry comes from John DeMoor "Trends in nursing home litigation". Daily Record and the Kansas City Daily News-Press.

When St. Louis defense attorney Stephen Strum finished his closing argument on behalf of a nursing home client earlier this year in Hannibal, Mo., he and his uninsured client were prepared and almost eager to hand over the keys to the facility's front door.  The jury returned a $400,000 verdict, with $240,000 of it for punitive damages involving aggravating circumstances.  Defendant is appealling the jury's findings.  Strum siad if the appeal is unsuccessful, "we'll just hand over the keys".

Strum is one of many defense attorneys with nursing home clients that have converted each of their facilities into an independent limited liability corporation while at the same time have opted not to carry long-term-care liability insurance so they can't be held accountable for neglect and negligence.

This tactic is just one of the latest trends that nursing homes are using to avoid responsibility for their actions.  Setting up nursing homes as their own limited liability corporation, not carrying liability insurance, refusing settlements and trying each case to the bitter end is part of a growing local and national trend the nursing home industry is using to protect itself from resident related lawsuits.

Defendants are quick to use the tactic to intimidate plaintiffs, concedes Kansas City defense attorney Roger Slead of the law firm Horn, Aylward & Bandy. I have heard it threatened more and more: 'If you think this is a $5 million case, here's the key to the facility because it's not even worth $5 million as an ongoing business concern. Here, you can have the keys to the facility and we're going to walk away,' Slead said.

Plaintiff attorney Derek Potts of the Potts Law Firm in Kansas City said that incorporating into an LLC and not carrying insurance is merely a strategy for nursing homes to shield themselves from liability.  He sees the dangling-keys tactic often used early in a case to discourage attorneys from proceeding with costly litigation. They come out early and say, 'We're just going to be honest with you. There is no insurance, no money and you should probably abandon your case, or we can pay you a nominal amount to go away,' Potts said. And it does work. I know a lot of attorneys who are daunted by that and don't want to risk their time and expense going forward.

Many national nursing home companies have developed shell corporations with elaborate management systems and corporate structures. Potts explained that the corporation at the bottom level of the structure is often a not-for-profit corporation or a pass- through entity which rarely realizes profit or gain on its books.

The defendant will typically file a motion for summary judgment to sever the parent corporation or owner from the case. He points out that the plaintiff must counter by directing discovery towards piercing the corporate veil or showing to what extent the owner controls the care given and how that caused the injury.  Potts says the plaintiff should argue that owners control the quality of care based on how much money they provide for the amount of staff, salaries, training and adequacy of the equipment.

All these things directly impact patient care and controls how much profit they make, but they are also things that can impact how people get hurt or even killed, he said. The challenge is to follow the money trail to establish exactly who profited from the operation of the nursing home and tie that ultimate profit to the injury and, or death.

During discovery, Potts suggests the plaintiff seek the disclosure of ownership statement from the Missouri Department of Health and Senior Services; identify the named insureds on the liability policy at issue; and depose corporate executives about their understanding of the nature of the relationship.

Decisions by the Missouri Court of Appeals have helped to provide guidelines on how to build these cases. In Scott v. SSM Healthcare St. Louis, 70 S.W.3d 560, (Mo.Ct.App. 2002), the Missouri Court of Appeals held that to establish an agency relationship in the healthcare setting, (1) the principal must consent, either expressly or impliedly, to the agent's acting on the principal's behalf, and (2) the agent must be subject to the principal's control.

Potts currently has a case where he has been told that all his client will receive are keys to a building the nursing home leases. However, he has yet to see a situation where a plaintiff has won and proceeded with collecting the assets of the nursing home.

 

 

 

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