In This Issue
States Search for Methods to Honor Advance
Directives
Show Me the Money -- Tort Reform States Big
Winners in LTC Liability Report
North Carolina’s Health Care
Enforcement -- Adding to the Arsenal
States Search for Methods to Honor Advance
Directives -- North Carolina Considers Additional Advance Directive Form
by
Ken Burgess
More than fifteen years
after Congress passed the Patient Self-Determination Act of 1990,
designed to ensure that patients’ wishes about end-of-life decisions are
honored, states are still searching for the best way to make that goal a
reality. A recent Florida case highlights one of the continuing problems
facing individuals who try to express their wishes for end-of-life care
and providers who try to balance the inherent tension between individual
choices and facility liability.
Madeline Neumann entered a
nursing home in 1992 at age 89. She was competent and had a living will
stating that she did not want life-sustaining care, including CPR,
artificial nutrition and hydration, surgery, and artificial respiration.
One evening in 1995, she became unresponsive. Her medical record
contained the living will but no Do Not Resuscitate Order. Facility
staff paged the medical director, who ordered staff to call paramedics.
The paramedics arrived, performed CPR and intubation, and transported
Ms. Neumann to a hospital, where she lived on a respirator for three
days until her family ordered it removed. She died four days later.
Ms. Neumann’s family sued
both the physician and the nursing facility for failing to honor her
expressed wish not to be kept alive artificially. The facility defended
itself by pointing to the absence of a DNR order in her chart and to the
fact that while she had a living will, in most states living wills do
not become operational unless and until a patient is diagnosed as
terminally and incurably ill or in a persistent vegetative state,
neither of which had been the diagnosis of Ms. Neumann when she became
unresponsive and was transported to the hospital.
This case highlights one of
the glaring problems in the advance directives laws of most states.
Residents and their family members, often acting with the best of
intentions, execute living wills, thinking they’ve addressed all
possible situations they may face at life’s end. However, the living
will normally requires a diagnosis of terminal illness or persistent
vegetative state. By contrast, a DNR order can be executed by anyone,
including healthy individuals who simply do not want to be resuscitated.
Although most young, healthy individuals would not execute a DNR order,
many elderly patients, who may be healthy but frail, do choose DNR
orders because of the physical damage resuscitation can cause, such as
broken ribs, punctured lungs, and other serious medical side effects.
The problem for providers
arises when an otherwise healthy individual who is neither terminally
ill (the normal aging process not being defined in and of itself as a
terminal illness) nor in a persistent vegetative state suddenly arrests.
If such residents do not have a valid DNR order on the charts, most
facilities will initiate CPR and other life-saving procedures. This
problem usually occurs less frequently when the patient also has a
health care power of attorney because, if properly executed with broad
powers assigned to the health care agent, the agent can make any
decision the patient could make if able to communicate his or her
wishes, including refusal of CPR. However, absent the presence of an
agent at the moment of arrest, or a prior communication from a health
care agent, and absent a valid DNR order, the provider faces a difficult
choice – either resuscitate and potentially face a lawsuit for battery
(an unlawful touching that consists of providing unwanted medical care)
or withhold CPR and potentially face a lawsuit for wrongful death.
This is not much of a choice
and most providers, when faced with it, will opt to provide life-saving
care. This, in fact, is the advice most attorneys give their clients in
the absence of a clear and legally effective directive, or a DNR order.
Many states, including North Carolina, have adopted portable DNR orders,
created on special, easily recognized forms, that patients can take with
them from home to hospital to ambulance to long term care facilities.
This is designed to avoid historical problems of health care providers
honoring only their own DNR orders and confusion by paramedics over what
to do when they answer a call and are presented with a hospital’s own
DNR order or that of another provider. The portable DNR order is
universally recognized and providers know they can rely upon it without
fear of legal liability. This tells us that the form has helped
somewhat.
owever, a number of states
are now considering an additional document based on an Oregon model
called the POLST form. POLST stands for Physician Orders for
Life-Sustaining Treatment and is a standing order that addresses a range
of possible responses that might be considered for patients, including
life-sustaining procedures like CPR and more routine care such as
surgery, antibiotics, and so forth. In states like Oregon that have
adopted the POLST form or something similar, the document is discussed
by the physician and the patient and is then executed by the doctor,
becoming a legally binding order that can be relied upon by any provider
or first responder.
The North Carolina
legislature is now considering a variation of the POLST form, called the
MOST form, which stands for Medical Order for Scope of Treatment. The
document is designed to allow residents, in cooperation with their
doctor, to indicate care choices, including choices about CPR and other
medical interventions, including antibiotics, and artificial nutrition
and hydration, among others. The form will not replace the existing
portable DNR order with the red stop sign logo, but can be used along
with or in lieu of that form. As with the portable DNR form, the bill
would require the Department of Health and Human Services to adopt a
standardized MOST form.
The MOST form has been pilot
tested in several North Carolina counties, including several long term
care providers who generally found the concept and the form very
helpful. A number of N.C. professional medical organizations are
supporting the MOST form, including the N.C. Medical Society.
The most common question
about the MOST form is, why do residents need it if they already have a
portable DNR form? The simple answer is that a portable DNR form is
limited to issues of resuscitation while the MOST form would address
other interventions in addition to CPR. So, in that sense, the MOST form
has broader application. People also ask, “Why do I need a MOST form if
I have a living will?” The answer is that a living will is not a
physician’s order, per se, but merely an expression of a resident’s
wishes. As such, a physician still has to give an order consistent with
the living will to withhold or provide care. By contrast, the MOST form
would be signed by both doctor and resident (or their legal
representative) and so would be a standing medical order that any
provider could rely upon to initiate or withhold care, without further
direction from the attending physician. In that sense, the MOST form is
like a DNR order in that neither requires any additional orders from a
physician or other authorized health care provider.
Whether or not the
legislature follows the lead of progressive states like Oregon in taking
this next step to memorialize and protect patients’ end-of-life wishes,
it’s a safe bet that issues surrounding end-of-life choices will
continue to captivate the nation’s attention. We will report on the
progress of the MOST form in future issues of Shorts on Long Term Care.
Ken
Burgess is a long term care attorney advising clients on a wide
variety of legal planning issues arising in the skilled nursing facility
setting, assisted living setting, and other aspects of long term care.
He is a frequent national lecturer and author of industry manuals,
national trade journal magazine articles and similar training tools. He
serves Poyner & Spruill clients by focusing on legal issues impacting
the long term care and health services sector. He may be reached at
919.783.2917 or
kburgess@poynerspruill.com.
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Show Me the Money -- Tort Reform States Big
Winners in LTC Liability Report
By
Ken Burgess
Tort reform legislation
enacted in several states during the past five years is paying off big
for long term care providers in terms of frequency and cost of general
and professional liability claims. According to a recent report by AON
Actuarial and Analytical Consulting, commissioned by the American Health
Care Association (AHCA), liability costs have dropped dramatically in
states that have enacted tort reform in the past five years, including
Florida, Georgia, Louisiana, Mississippi, Ohio, Texas, and West
Virginia.
According to the AON report,
the average loss has dropped from a high of $5,110 in 1998 to $1,240 in
2006. Both the frequency and severity of claims are down in those
states, with the number of claims per 1,000 beds dropping from 18.7 in
2001 to 12.3 in 2006. At the same time, the average size of a claim has
dropped substantially from $358,000 in 1998 to $101,000 in 2006. Texas,
one of the most litigious states for long term care providers, posted a
60% reduction in liability costs since passage of its tort reform
legislation, with the average number of claims dropping from 18.3 per
1,000 beds to 7.5 claims per 1,000 beds. The average severity of claims
there dropped from $410,000 in 1998 to $149,000 in 2006.
The AON report looked at
insurance and loss experience nationwide by surveying a pool of 60
providers across the country, including nonprofit, proprietary,
independent, regional, and national multi-facility providers. AON
examined 20,000 claims from long term care providers, consisting
primarily of skilled nursing facilities but also including some
independent living, assisted living, home health care, and
rehabilitation facilities. The study sample represented 15% of the long
term care beds in the U.S. and is statistically significant.
The insurance and loss
experience in non-tort reform states was not as positive. In states
without significant tort reform legislation, the frequency of claims
continues to rise at an annual rate of 9%, with claims rising from 5.5
per 1,000 beds in 1995 to 10.7 in 2006. The average severity of claims
in 2006 in non-tort reform states is 60% higher than in states with tort
reform.
Nationally, including both
tort reform and non-tort reform states, insurance loss costs have
stabilized somewhat at roughly $1,610 per bed, down from a high of
$2,030 per bed in 1999. The average severity of claims has dropped from
a high of $261,000 in 1998 to $146,000 in 2006, but the frequency of
claims continues to climb and has doubled from 5.6 in 1995 to 11.1 in
2006.
The study also examined the
amount and percentage of losses attributed to indemnification of
plaintiffs versus the cost of defense, including legal fees to both
defense counsel and plaintiffs’ attorneys. During the past 7 years, the
average cost to defend a malpractice/negligence claim has more than
tripled, rising from $13,600 to $52,800. Part of this is a reflection of
the more aggressive defense strategies long term care counsel have
adopted in response to the flood of claims. More than half of the total
cost of claims goes to plaintiffs’ attorneys, leaving less than half of
recovery amounts available to residents or families alleging injury.
AON attributes the overall
reduction in insurance costs and losses for the long term care industry
to several factors, including:
-
tort reform legislation
that often limits non-economic damages (such as pain and suffering,
mental anguish, etc.);
-
operational changes made
by long term care providers, including better risk management
programs and quality assurance initiatives, increased staffing,
additional investment in operations and quality measures, and
enhanced patient and family education programs;
-
the increased use of
arbitration and other alternative dispute resolution options that
remove cases from the vagaries of jury verdicts; and
-
the exodus from some of
the higher cost states of large multi-facility providers, which has
left many states predominantly served by independent or small
regional chains organized as limited liability corporations which
have less insurance coverage and arguably less exposure, making them
less attractive to aggressive plaintiff’s counsel.
The message from these
numbers is clear. The insurance and loss crisis is not as bad as it was,
but it’s still not good. And it’s clear that tort reform works. For
states without tort reform applicable to long term care negligence
claims, it seems apparent that enacting tort reform would have a
positive impact on insurance costs, in terms of both the number and
average cost of claims. The other message that may be helpful to states
trying to enact tort reform over the traditional objections of consumer
advocates and plaintiffs’ attorneys is that tort reform does not deny
injured residents recovery. There are still plenty of claims and
reasonable recoveries in states with tort reforms. However, reforms do
seem to control runaway juries and overly aggressive plaintiffs’
counsel, at least to some degree. Finally, the AON study notes,
significantly, that since most long term care in the U.S. is paid for by
Medicaid and Medicare, the insurance and malpractice losses suffered by
providers are ultimately paid for by tax dollars; most of those dollars
are being spent not to reimburse residents alleging injury, but to pay
their attorneys who initiate these cases. The average legal fee assumed
in the report for plaintiffs’ counsel was 35%. Where plaintiffs’ damages
for non-economic damages are limited by tort reform, the total potential
recovery from which that 35% is calculated tends to be far less than in
states without such caps; this factor partly explains why some of the
“how to sue nursing homes” plaintiffs’ law firms are less interested in
tort reform states than in others.
Ken
Burgess may be reached at 919.783.2917 or
kburgess@poynerspruill.com.
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North Carolina’s Health Care
Enforcement -- Adding to the Arsenal
By
Chris Brewer
The North Carolina Medicaid
Fraud Control Unit and other state health care enforcement agencies
currently have a variety of weapons in their arsenal for criminal and
civil prosecution and recovery in health care cases. Senate Bill 179,
introduced in the 2007 legislative session, seeks not only to provide
the government with new weapons, but also to give more bang to the
existing ones.
At the state level, most
Medicaid fraud cases are prosecuted criminally under the Medical
Assistance Provider Fraud statute (N.C.Gen.Stat. §108A-63). This statute
is violated when a Medicaid provider willfully and knowingly makes, or
causes to be made, a false statement or a false representation of a
material fact:
-
in an application for
payment (claim); or
-
in an application to
determine Medicaid provider eligibility for payment or that allows a
provider of services to qualify or remain eligible to provide
Medicaid services.
The statute is also violated
when a Medicaid provider knowingly and willfully conceals or fails to
disclose any fact or event that affects either the provider’s initial or
continued entitlement to Medicaid payments, or the amount of payment to
such person is or may be entitled. A provider is defined as any person
who provides goods or services under the Medicaid Program and any other
person acting as an employee, representative, or agent of such person.
Currently, violation of the Medical Assistance Provider Fraud statute is
a Class I felony.
SB 179 would increase the
punishment for engaging in a scheme to defraud the Medicaid Program to a
Class H felony if the value of the health care services is less than
$100,000, and a Class C felony if the value of services exceeds
$100,000.
The legislative proposal
would also add an anti-kickback provision that would be very similar to
the present federal anti-kickback statute.
North Carolina also has the
Medical Assistance Provider False Claims Act, which is similar to the
federal False Claims Act (FCA), to assist in civil recoveries (N.C.Gen.Stat.
§108A-70.12). This law became effective December 1, 1997, for any
conduct occurring on or after that date. The act applies to any Medicaid
provider who knowingly presents or causes to be presented to Medicaid a
false or fraudulent claim for payment or approval. It also applies to
any Medicaid provider who knowingly makes, uses, or causes to be made or
used a false record or statement to get a false or fraudulent claim paid
or approved by the Medicaid Program. Each claim presented is a separate
violation. A civil penalty may be assessed of not less than $5,000 and
not more than $10,000 plus three times the actual damages sustained by
Medicaid for each claim. There is a double damage provision for
self-reported violations if certain conditions are met. The statute
provides assurances that double penalties will not be assessed from both
the federal and state false claims statutes for the same claim. There
are provisions for Civil Investigative Demands (civil subpoena) by the
attorney general. Unlike the federal statute, the state statute does not
currently include a qui tam (whistleblower) provision.
SB 179 would make several
significant changes to the state FCA. The proposed legislation would add
liability for engaging in a conspiracy to defraud the Medicaid Program.
Civil penalties would be increased to not less than $5,500 and not more
than $11,000 for each violation. Perhaps most significantly, SB 179
would add a qui tam provision to the existing statute.
Finally, SB 179 provides for
an “authorized investigative demand,” adding a new subpoena to the
government’s criminal enforcement arsenal that tracks very closely the
subpoena authority given to the United States Department of Justice in
1998 for use in federal health care fraud investigations. The subpoena
may be used only for production of documents and records, and for
testimony concerning their production and authentication. Documents
produced can also be used in parallel civil actions. It is important to
note that SB 179 allows the new subpoena to be used in health care
investigations relating to patient abuse and neglect, as well as theft
of patient personal property.
Long term care providers who
would potentially be impacted if SB 179 is enacted should pay close
attention to this proposal during the current legislative session.
Chris Brewer, former
Director of the N.C. Medicaid Fraud Control Unit, practices in the areas
of Healthcare Litigation, Medicaid Fraud Defense, and Reimbursement
Issues. He may be reached at 919.783.2891 or
cbrewer@poynerspruill.com.
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