Question: Grandma finally checked into a skilled nursing facility (SNF), a member of a national chain of for-profit SNFs, after her progressive dementia prevented her from performing the basic activities of daily living. Unfortunately, the staffing was inadequate, and there were lapses in attention toward her nutrition, medications, and body hygiene. She even fell from her bed on a couple of occasions. Other residents have registered similar complaints. Which of the following legal recourses is available?
A. A lawsuit against the SNF, alleging neglect and abuse.
B. A class action suit against the SNF and its corporate owners.
C. A lawsuit against the attending physician and/or the medical director.
D. A, B, and C.
E. Only A and B.
Answer: D. According to the Wall Street Journal, more than 1.4 million people live in U.S. nursing homes, 69% of which are run by for-profit entities. In contrast to a malpractice complaint, lawsuits against nursing homes and SNFs typically involve allegations of a pattern of neglect and abuse rather than any single incident of negligence. The terms nursing home and SNF are often used interchangeably, but do differ somewhat in that the former deals with non-Medicare regulated custodial care, whereas Medicare regulates and certifies all SNFs, which provide both custodial and medical care. Federal and state statutes, e.g., 42 CFR §483 and Centers for Medicare and Medicaid Services guidelines in the State Operations Manual, prescribe the requisite standards. Collectively referred to as the OBRA standards, their violations are frequently at the heart of a plaintiff’s allegations. These may include short staffing, inattention to body hygiene, skin infections, pressure ulcers, improper use of restraints, poor nutrition and hydration, and failure to monitor or supervise, including failure to administer prescription medications and prevention of falls and violent acts from other residents.
In the past 2 decades, nursing homes and SNFs have experienced soaring numbers of lawsuits, with Texas and Florida being especially vulnerable. Runaway jury verdicts can result even where the elderly victim has incurred little or no economic loss. Noneconomic losses such as pain and suffering as well as punitive damages explain these huge awards. A recent widely publicized case is illustrative: On Sept. 4, 2009, 87-year-old Dorothy Douglas, an Alzheimer’s patient, was admitted to Heartland Nursing Home in Charleston, W.Va. Still cognitive, she was able to ambulate with an assistive device and was well nourished. However, within 19 days of admission, she became barely responsive, dehydrated, and bedridden, and had fallen numerous times, injuring her head. She died shortly thereafter. Her son sued the owner of Heartland and those responsible for its operations, claiming, among other things, medical and corporate negligence. A jury found in his favor, awarding $11.5 million in compensatory damages and $80 million in punitive damages. On appeal, the West Virginia Supreme Court affirmed in part the trial court’s order, although it reduced the punitive damages from $80 million to $32 million (termed a remittitur).
There are other sizable verdicts, such as a $29 million lawsuit against a Rocklin, Calif., facility in 2010. Another, possibly the largest on record, was a 2013 Florida jury award of $110 million in compensatory damages and $1.0 billion in punitive damages against Auburndale Oaks Healthcare Center. However, this may not have been the final negotiated amount. Increasingly popular is the use of class action lawsuits, where representative plaintiffs assert claims on behalf of a large class of similarly injured members. Typically, they allege grossly substandard care and understaffing in violation of Medicare and/or other statutory rules. New York’s first nursing home class action suit, which dragged on for some 9 years, ended up with a settlement sum of only $950,000 for its 22 class members. The suit alleged, among other things, inedible food, inadequate heat, and squalid conditions. A more recent example: In 2010, a Humboldt County, Calif., jury returned a $677 million verdict (Lavender v. Skilled Healthcare Group Inc.) against one of the nation’s largest nursing home chains for violating California’s Health and Safety Code in its 22 statewide facilities. The case later settled for $62.8 million on behalf of the 32,000 residents.
What about physician liability? Many doctors attend to SNF patients and a number act as medical directors. Liability exists in both roles. The first is governed by the usual tort action of malpractice. The latter is infinitely trickier. Medicare mandates all SNFs to have a medical director, and federal law [42 CFR 483.75 (i)] requires the medical director to be responsible for implementation of resident care policies and the coordination of medical care in the facility. Although their duties are administrative in nature, medical directors are not infrequently named as codefendants in SNF lawsuits. Allegations against the medical director may include negligent supervision of staff, and/or the failure to set standards, policies, and procedures, especially if they have been made aware of citations by auditing agencies. Because a doctor’s professional liability policy typically excludes coverage for such work, it behooves all medical directors to insist on being a named insured in the institution’s general liability policy (to include tail coverage), and to be informed in a timely fashion should there be a relevant change or cancellation of coverage. Their contract should stipulate that the facility would indemnify them for all lawsuits arising out of their work. More and more nursing homes are dropping their insurance to bypass legal exposure, leaving the attending physician and/or medical director at increased risk. To avoid a serious gap in coverage, medical directors should consider purchasing a specific medical director policy. Medical directors should also be aware of potential Stark Law violations, such as treating private patients without paying fair rent or receiving compensation in exchange for referrals.
Importantly, elder abuse judgments, as opposed to malpractice awards, may negate restrictions on attorney fees and noneconomic damages such as California’s $250,000 cap. The jury may also levy punitive damages, which are not covered by professional insurance. The plaintiff will need to prove, by clear and convincing evidence, something more than simple or gross negligence such as malice, fraud, oppression, or recklessness. Under California’s elder abuse and dependent Adult Civil Protection Act, an appellate court has held that a plaintiff may mount an elder abuse claim directed at physicians and not just facilities with “custodial” duties. This important issue is currently under appeal before the California Supreme Court.
Dr. Tan is emeritus professor of medicine and former adjunct professor of law at the University of Hawaii. He currently directs The St. Francis International Center for Healthcare Ethics in Honolulu. This article is meant to be educational and does not constitute medical, ethical, or legal advice. For additional information, readers may contact the author at firstname.lastname@example.org .