Category: Mike’s Column

A nationwide report was just released that revealed the reasons why lawsuits are filed against assisted living and skilled nursing facilities. Resident falls remains the number one reason for lawsuits and insurance payouts. The 2024 General and Professional Liability Benchmark Report revealed wound-related claims have increased and it is projected there will be a 3.8% increase in estimated claim payments. 

          The report’s authors noted a “significant” number of wound-related claims against senior living providers had an average per claim cost of $267,179. Payments for resident falls averaged $207,683. With the increase in wound claims and the high cost involved in settling these claims, the report admonishes senior living communities to be more “proactive in identifying and managing residents with wounds, especially upon move in,” and encouraged a greater use of community-based services in senior living especially in wound care processes and practices.

          The second highest paid claim, averaging $335,570, was for alleged “abuse,” just behind “choking” claims that averaged $368,508. The report stated facilities must place a greater emphasis on having admission procedures in place to identify individuals with pre-existing behaviors or conditions and provide appropriate staff training on the proper management of typical resident behaviors.

          Unexplained resident absences or elopement-related claims averaged $245,756. Many COVID-19 claims are still being litigated, but most have closed because facilities are using an aggressive defense bolstered by the courts honoring state and federal liability protections.

          Most liability companies limit indemnity and expenses to $1 million, but recent claims have resulted in costs as high as $2.1 million. If an insurance company has payout limits, a financial obligation can fall upon a facility to pay a claim over and above its policy’s limits.

          One-third of the largest claims originated in California, followed by Florida, then Arizona. The report stated California’s loss rates and severity remained consistently higher than national rates, and its “claims frequency” has remained consistent over the past 10 years. The report also revealed that Illinois’ loss rates have been trending higher than the national rates, and, in recent years, so has Kentucky’s liability claims.  Since the California legislature’s mandate upon senior care facilities to obtain liability insurance, the 2015 surge of providers entering the industry has changed to a mass exodus because of mounting losses. That is consistent with large insurers leaving California because of massive fires destroying homes and other “global warming” issues.

What would happen if the federal government started to regulate the fees and services in California’s assisted living industry? It’s possible as Congress is “studying” the industry, gathering information from three of the largest assisted living providers in the United States to “evaluate resident safety, facility staffing and pricing.” One senator wants to call out the industry’s “exorbitant costs and insidious hidden fees.” Another senator believes there have been “serious health and safety problems in assisted living communities that have not been addressed yet.”

          In response to these perceptions, Congress has created a website asking consumers to share their “bills and experiences” and to get public input into how and why the government should get involved. Will Congress study staffing challenges, rising operating costs, diminished reimbursements and recent assisted living bankruptcies, which hit a record high last year due to “cost inflation” or “reimbursements not in line with rising costs.”

          Through CalAIM, ALWP and similar programs, California has been pushing assisted living facilities to act more like skilled nursing facilities and admit low-income and Medi-Cal residents, aging prisoners, the homeless and persons with mental disabilities, but with higher operating expenses and greater compliance oversight, can the industry afford it?

          According to the 2020 Genworth Cost of Care Survey, the average cost of nursing home care was about $304 per day or well over $9,000 a month, but the average assisted living fee in California is $5,250 according to a recent Forbes study. If California and the U.S. continue to withhold adequate funding and reimbursement to nursing homes and then push assisted living facilities to accept nursing home-level residents, both ARF and RCFEs will be forced to admit post-surgical hip operations and abdominal surgeries. In addition, residents are likely to have various forms of cancers, traumatic brain injuries, strokes, wounds and AIDS.

The most recent statistics show a decline in California nursing homes from 1,230 in 2020 to 1,176 in 2023, attributed to overregulation, higher staffing requirements, and lower reimbursement rates. What about facility declines?

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California governor Gavin Newsom said, “This year California delivered on critical action to make people’s lives better, safer, healthier, and happier in putting people first, safeguarding freedoms, and creating economic opportunity.” Based upon the laws passed, the state has again taken aim at employers but not to create any “economic opportunity.”

          Let’s first clear the air about SB525, the healthcare worker minimum wage. It will NOT increase minimum wage to $25.00 hour for facility staff. The law is for nurse assistants, custodians, housekeepers, gift shop workers, kitchen staff, etc. who work in hospitals, nursing homes and similar medical settings. The raise was justified because of the “courage shown by workers during the pandemic.” Did the fast-food workers display similar courage meriting a $20.00 minimum wage hike starting April 1? Didn’t facility staff exhibit the same if not more courage?

          The state’s new $16.00 per hour minimum wage law will go into effect January 1, but some counties and cities have exceeded the state’s minimum hourly wage. The website to check on your city or county’s minimum wage is https://www.dir.ca.gov/dlse/minimum_wage.htm. Because fast food workers get $4.00 more per hour, it is likely caregivers will leave the assisted living industry to flip burgers rather than flip—turn—residents.

          Cannabis users will get “additional work protections” including the prevention of discrimination during the hiring process and there will be restrictions on terminating the cannabis user for off the job and away from the workplace use.

          More persons are now eligible for conservatorship because they are unable to provide for their personal safety, necessary medical care or have a “severe substance use disorder or serious mental health illness.” That’s in line with the state’s failed attempt to expand Medi-Cal services under the state’s CalAIM and Master Plan programs that force the mentally ill into mental health facilities then get discharged after “treatment” to adult and senior assisted living facilities. Each county, and thus taxpayer, will be on the financial hook for the treatment and care of such persons.

          On January 1, if a facility is located near a church or independent college, it may have to deal with a large number of homeless persons because the state approved the “Yes in God’s Backyard” legislation for use of church and college parking lots and other properties to house “low-income persons.” These sites can “bypass most local permitting and environmental review rules.” Coupled with this is the state’s expansion “of lifesaving treatment” allowing “more mobile pharmacies to be created in communities across the state” to dispense “treatment medications for opioid use disorder.”

A new law now voids noncompete clauses or agreements—both current and future—in employment contracts starting February 14.

          Paid “sick leave” will expand to five paid days per year (more in some cities and counties). The rational for the expansion: “Too many folks are still having to choose between skipping a day’s pay and taking care of themselves or their family members when they get sick,” said Governor Newsom.

          Another new law will expand the number of eligible days a person can have for experiencing a “reproductive loss.” AB352 will support non-Californians entering the state to access “reproductive rights” at taxpayer expense. Low-income Californians of all ages and regardless of immigration status will be able to access Medi-Cal starting in 2024. AB352 protects “all Californians’ and visitors’ electronic medical records related to abortion, gender-affirming care, pregnancy loss and other sensitive services.”

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DSS’ website states Provider Information Notices (PIN) did not appear until late 2016. It previously used “Provider Letters and CCLD Information Releases” to “…formally communicate important license-related information to CCLD-licensed providers.” The information may be useful and timely, but the content of a PIN is not legally enforceable.

          The problem has always been the problem, but that problem is a good problem, and the problem is not going away. The problem for DSS is California law does not allow it to use PINs, letters, or releases as substitutes for state regulations.

          For example, a January 10, 2019 PIN, 19-01-ASC, claimed all medical assessments to admit RCFE residents could only be “signed by a physician” as stated in Title 22 section 87458(a). The PIN claimed an RCFE had to obtain a waiver to allow a non-physician to conduct and sign the medical assessment. However, Health and Safety Code 1569.30 does not allow DSS to enforce anything “inconsistent with any statute of this state.” [For ARFs, Title 22 section 80069(a)(1) allows medical assessments to be “performed by a licensed physician or designee.”] For RCFEs to obtain a waiver to an outdated regulation makes no legal sense.

          Are there laws allowing a physician assistant and nurse practitioner to perform a physical exam and sign it?

          Yes, there are: US Public Law 111-148; California Business and Professions Code, Division 2, Chapter 6, 2834 – 2837, Nurse Practitioners; and Business and Professions Code, Division 2, Chapter 7.7, Article 1, the Physician Assistant Practice Act. However, the PIN upholds the obsolescence of the regulation and ignores state and federal law.

          California Government Code 11340.5 prevents all state agencies from issuing and enforcing memos, PINs, letters, releases, manuals, etc., unless the PINs, letters, releases, manuals, have been adopted as a regulation.

          During the recent state of emergency, the state’s constitution and its emergency services act allowed special powers and authority to be used to “preserve public health” for a period of time “not to exceed the duration of the emergency.”

          The emergency is over and so is the need for more PINs!

          A PIN cannot and does not create a new policy and procedure or regulation. An evaluator cannot enforce PIN compliance because the law prevents all agencies from issuing, using, enforcing or attempting to enforce anything not adopted as a regulation. A citation or deficiency cannot be based upon anything other than an adopted state regulation or chaptered state law. No PINs allowed.