Risk management in elder care facilities

For the past few years, the number of citizens in the United States age 65 or older has slowly, but steadily, increased.

These population totals are approximately 15% of the total U.S. population. However, in its March 2018 demographics report, the U.S. Census Bureau noted that 2020 will see a jump to 56.1 million citizens age 65 or older — roughly 17% of the population. The Bureau further noted that “the year 2030 marks a demographic turning point for the U.S. Beginning that year, all baby boomers will be older than 65. This will expand the size of the older population so that one in every five [73.1 million] Americans is projected to be retirement age.”

The aging of America’s population will place significant burdens on long-term care facilities (nursing homes, retirement communities, home service facilities, etc.) and necessitate an increase in this market to accommodate an aging America. This will result in new opportunities for insurers, but will also increase the risk of insuring long-term care facilities — an industry that is already prone to a significant number of claims. However, there are several steps that an insurer can take to reduce the number of claims and the liability from such claims, and they all start with insisting on key pieces of information from your insured.

Most common long-term care liability scenarios

Although claims are categorized differently by different companies, a review of available data shows that the top three most common sources of claims in long-term care facilities are:

1. Slip and falls (40% of claims)
2. Pressure ulcers (20% of claims)
3. Negligent care, including improper administration of medicine, malnutrition, dehydration, wandering/elopement issues (15% of claims)

The remaining claims categories for long-term care facilities cover a wide array of allegations; however, some of the most common claims that an insurer must deal with are: sexual abuse, assault (patient on patient, staff on patient) and violation of resident’s rights (i.e., failure to get informed consent). Insisting that the insured has protocols in place and actually follows them, however, makes any of these claims harder for plaintiffs’ counsel to pursue and will significantly reduce an insurer’s risk and liability in the long term.

Effective risk management involves information

It may seem impossible to prevent claims from occurring in long-term care facilities, and this is likely true; however, there are several ways that an insurer can reduce potential liability and defense costs associated with these claims. Following these simple tips forces your insured to take steps that may decrease claims at their facilities, while at the same time ensuring that when claims do arise, the proper and necessary documentation is in place to defend them.

• Know the full scope of care of the insured

It is imperative that you know the full scope of care services that the insured facility provides. Different levels of care lead to different levels of risk. For example, some nursing homes offer home services for elderly clients who wish to receive nursing home level care, but in the comfort of their own home. This may not be the nursing home’s primary service offering, but it is a way to diversify its revenue stream.

However, this type of service often means that the insured has less control over managing risk in these situations, as there is no video surveillance in a client’s home, opportunities for abuse increase and the like. The full scope of the home services offered may not be readily discernible from marketing materials and they may not be fully disclosed when applying for coverage. Knowing the exact range of services that an insured provides will not only help you more accurately evaluate the risk of insuring the long-term care facility, but will also ensure that potential claims are properly covered or excluded from the outset.

• Slip and fall documentation

As slip and falls are a primary source of claims in long-term care facilities, it is critical that an insurer ask for the facility’s written fall prevention plan and do an assessment of its adequacy. Do not simply get the documentation to “check off the box”! Slip and fall plans cannot be one-size-fits-all between facilities, nor can they be uniform within the same facility.

Prevention plans must be individually tailored to each resident of the facility, as each resident will necessarily have different risk factors for falls. If not apparent from the plan itself, ask the insured: Is the plan re-assessed when medications or medical conditions of the residents change? Is there a component of the plan that discusses how staff, the resident and family will be educated on fall prevention? The answer to both of these questions should be “yes.”

Finally, insist that an insured keep incident reports for all reported or witnessed slip and falls, no matter how minor. The worst possible course of action is for a fall to occur, the resident insists that he or she is fine, and no action is taken. While the resident may be unharmed, such undocumented occurrences later in litigation build a case for arguments of negligence that may be unwarranted, yet without proper documentation, it is difficult to rebut the allegation.

• Insist on documentation protocols

Slip and fall prevention plans are not the only thing that long-term care facilities need to document in order to ensure that claims either do not happen or can be disposed of quickly without protracted litigation. There are numerous things that should be documented; however, one of the most overlooked is ensuring that the insured has a strong documentation policy for pressure ulcers, including photographic documentation of ulcers the day that a resident checks into the facility or the day that they are reported to staff. Many pressure ulcer claims can be defended with photographic documentation that correlates to and supports written findings. Words can be subject to interpretation — photographs often cannot.

Insurers should also insist that insureds conduct regular, proper training of their staff on how to document when documentation is required, and what to document. Consider implementing an auditing program that not only checks that such training is taking place, but which also uses trained adjusters to spot holes in existing record-keeping practices. Keeping this type of pressure on facilities will ensure that they are following “best practices” — a defense that goes out the window once a claim is filed if the documentation policies and associated training are not up to industry standards.

• Insist on information regarding staffing

A common way that elder care claims unfold is for the claimant to use information about the long-term care facility’s staff against the facility. For example, claimants often first look to see whether the facility’s staffing levels fall below state averages to paint the picture of the facility as understaffed with overworked caregivers, and therefore prone to negligence. An insurer should evaluate an insured’s staffing levels periodically to ensure that they are meeting or exceeding industry norms in the state.

Turnover is bound to happen, so the insured must have a turnover reduction plan in place to show that it takes proactive steps to prevent the loss of talented staff. Further, the insured should consider having a talent recruitment plan to ensure that it targets qualified professionals with experience in a long-term care facility setting. Consistent, well-trained employees lead to a lower risk of claims against the insured for negligent care.

• Never ignore the “won’t happens”

Sometimes, the most heinous acts seem so far-fetched that long-term care facilities believe that they will never happen and, therefore, do not warrant attention. However, the “won’t happens” do in fact happen — unfortunately, more frequently than most like to admit. Insist that an insured has plans in place for things that are commonly overlooked, including active shooter plans and assault or sexual assault protocols once such assaults are reported to the facility.  Although an extra cost up front, it is worth having these plans reviewed independently by an attorney or other risk management professional experienced in the industry. It is always best to find weak spots in policies before implementing them, rather than have them become front-and-center to any claim in the event of a tragic occurrence at the insured facility.

Ensuring that an insured long-term care facility has properly documented policies and protocols, educates staff on policies and protocols and does not take a “one size fits all” approach to issues are important steps to mitigating the risks for residents and the facility itself. In addition, they should have appropriately trained levels of staff and follow through on policies and protocols to further limit liability and reduce defense costs. Insisting that the insured provide proof of all of these items before issuing a policy or during the course of the relationship with the insured will help lessen the number of claims, and ensure that any claims filed are quickly dismissed or resolved.

John Gardella (JGardella@cmbg3.com) is a founding partner of CMBG3 Law. He has practiced for over a decade in the areas of insurance, environmental, products liability and toxic torts litigation.

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