Understanding what the Health Care Civil Justice Reform Act means

Episode 19
Categories: Neglect & Abuse, Regulations

This is the Nursing Home Abuse Podcast. This show examines the latest legal topics and news facing families whose loved ones have been injured in a nursing home. It is hosted by lawyers Rob Schenk and Will Smith of Schenk Law LLC, a personal injury law firm based in Atlanta, Georgia. Welcome to the show.

Schenk: Hello there and welcome to the Nursing Home Abuse Podcast. My name is Rob Schenk.

Smith: And I’m Will Smith.

Schenk: And we are trial lawyers and we practice in the areas of nursing home abuse and neglect in the state of Georgia. We are also your co-hosts for this podcast. Welcome, welcome, welcome. Thanks for joining us.

Got a lot of things to talk about. This will be one of the episodes where I might have to take a minute, count to 10 backwards and cool off a little bit.

Smith: Absolutely.

Schenk: The meat and potatoes of this episode is the Protecting Access to Care Act of 2017, which is a resolution, a House Resolution, that has been referred to the Judiciary Committee and the Committee on Energy and Commerce by Representative Steve King of Iowa. And why are we even talking about this?

Smith: I mean any time you hear something that sounds one way, in law you can always assume it goes the other way, like the Patriot Act, or Protecting Access to Care Act. If you have to put a name on it like that to sell it to people, there’s a reason you’re forced to sell it to people because it’s not in their interest. It’s in somebody else’s interest.

Schenk: So we have this resolution that’s being presented to the Judiciary Committee for review by Steve King, Iowa Representative, called Protecting Access to Care Act of 2017, so let’s talk about how that relates to nursing home abuse and neglect lawsuits.

The preamble to this act, which as Will has demonstrated, is likely, if it says one thing, it’s likely another, but the preamble says this – “Congress finds that the current civil justice system is adversely affecting patient access to healthcare services, better patient care and cost-efficient healthcare, and that the healthcare liability system, without reform, is a costly and inefficient mechanism for resolving claims of healthcare liability and compensating injured patients. And as a deterrent to the sharing of information among healthcare professionals, which impedes efforts to improve patient safety and quality of care.” That’s the preamble. The preamble is saying the civil justice system is destroying the healthcare industry.

Smith: And here’s something even more important to me that the preamble is saying. it is saying that “Congress finds that the current civil justice system is adversely affecting patient access to healthcare.” So right off the bat, I’m interested. “Wow, you guys did a study and you’ve got a bunch of evidence that supports the premise of this preamble? That’s amazing. Sure would like to see it.”

Schenk: It’s just amazing to me. We know what this is about at this point is that lawsuits against hospitals, long-term care facilities, nursing homes, are destroying the patient’s ability to receive good care. Well I thought that the lawsuits were because they had received bad care, so I didn’t realize that all of this is because of lawsuits is the reason why neglect and abuse happens.

Smith: And one of the reasons why we get so angry about this is just the absolute empty rhetoric and the lack of evidence. If they actually had a study that supported some of this, man, I’m all about good policies. Let me hear what your evidence is. Let’s look at this and let’s figure out a solution. The reality is there is no finding of fact.

Schenk: Okay, that’s a good point. So with regard to how the civil justice system is preventing good healthcare service, cost-efficient healthcare service and making it an inefficient mechanism for resolving claims, there are a dozen different regulations that this bill is proposing, but we’re going to talk about a few of them.

The first one is this. This is a federal bill – this a bill, the United States Congress, United States Senate, this will become federal law, and one of the objectives of this or one of the means of getting to better patient healthcare, and I’m using massive air quotes, is providing for a federal statute of limitations for the commencement of lawsuits against nursing home facilities, healthcare facilities.

How a statute of limitations works currently is we live in a federal system where we have 50 states and the District of Columbia, we have 50 states that have 50 different statutes…

Smith: Potentially different time frames.

Schenk: Different time frames – if you live in Georgia, the time frame, the statute of limitations for bringing a personal injury lawsuit is going to be two years, with some exceptions.

Smith: If you live in Tennessee, it’s one year.

Schenk: One year, and so on and so forth. So depending on what state you live in, you might have a different idea of how long you should have, you being the injured party, to bring a lawsuit. So what this – in some states, it could be longer, like some states have more protections for the consumer who…

Smith: They’re all generally around the same time frame. There’s no state that says the state statute of limitations for negligence is 20 years in general.

Schenk: So what this particular part of this resolution is attempting is to make a nationwide standard, contrary to states’ rights, a nationwide standard for the statute of limitations for cases just for the healthcare industry, because the civil justice system is destroying it.

So anyways, this is what Representative Steve King of Iowa is proposing – “The time for the commencement of a healthcare shall be three years after the date of injury or one year after the claimant discovers through the use of reasonable diligence, or through the course of reasonable diligence should have discovered the injury, whatever occurs first. In no event shall a time of commencement for a healthcare lawsuit exceed three years unless various tolling” – and I won’t get into that. So they’re saying three years. So I guess if you’re in Georgia, this might be better because you have an extra year, but if you live in – I’m not quite sure what the law is in Wyoming, but you might have six years in Wyoming for a personal injury lawsuit and then it’s not as good.

The bottom line is this – in what way is having a federal, a nationwide statute of limitations going to make healthcare better for everybody? In what way is it going to make it less costly? From a standpoint of states’ rights, from a standpoint of federalism, I think that’s ridiculous. Statute of limitations has always been in the realm of either state legislatures or the common law of the state that you live in.

So it’s ridiculous, and I guess we should have started with the primer, that the statute of limitations is usually a statute, but it’s a law that governs the amount of time that an injured person has to bring a lawsuit for whatever the injury is. So negligence – so negligence, the statute of limitations in Georgia is generally two years. So from the time that you’re injured, you have two years to bring a lawsuit, otherwise you lose, you waive the ability to bring that lawsuit. And I guess we should have started with that, but I think you get the gist. Most statute of limitations is common nomenclature.

Smith: And it’s all of law – not just personal injury, but personal injury, specifically for us, in Georgia it’s two years.

Schenk: And again, that’s negligence and most torts, but for example, breach of contract might be six years. So you have different statutes of limitations, and the statute of limitations is based on different policy rationals. There might be a reason why the statute of limitations is two years or medical malpractice is two years while defamation might be one year or breach of contract might be six years and so on and so forth. But at the end of the day, this is something that your local government and your state government is going to want to evaluate and decree based on the population of that particular state, not – and this is crazy that I’m saying this – but the federal government. It doesn’t jive. And I don’t think it jives with any other policy that this guy has. He’s a Republican from Iowa talking about standardizing across the country statute of limitations for lawsuits against healthcare facilities.

Smith: Yeah, I can guarantee you another rallying cry of his when it suits him is state rights.

Schenk: Yeah, and you know, in my research of this, because I don’t know Steve King, I just hear him in the news sometimes, but I was trying to figure out who his major donors were, like trying to figure out whether or not you could say he’s “in the pocket of the healthcare industry.” His biggest donor from 2012 to 2016 was Blueberry Ice Cream, or Blueberry Dairy, which is an ice cream company in Iowa, based in Iowa. Never heard of them. I’m from Tennessee, so we eat Mayfield or Purity. But I was attempting to uncover skeletons in the closet, but I couldn’t, so Blueberry is his main. And out of the top 15 donors that he has from 2012 to 2016 for his campaigns, it was only one healthcare association. So maybe he’s doing this on a trade to get ice cream legislation passed. Anyways, so that’s statute of limitations.

Smith: Right.

Schenk: So we also have here this proposed resolution, and this is going to be another one that the blood boils. It says in any healthcare lawsuit, that is to say any lawsuit against a nursing home, against a hospital, long-term care facility, doctor or provider, any of those lawsuits, the amount of non-economic damages if available shall not exceed $250,000 regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same injury. So in other words, if you the resident or you the loved one is filing suit against a nursing home on behalf of a resident, if you assert pain or suffering or general damages as we call them, they cannot exceed $250,000.

So again, how does that make patient healthcare better? How is that making healthcare services better? It’s just amazing to me. So basically the gist of this, if you can read between the lines, is similar to what we talked about in an episode a few weeks ago, where nursing home facilities pay a certain amount of money in insurance premiums, and the insurance company steps in and defends them in negligence cases, malpractice cases, and their insurance premiums go up if their negligence is cause for a verdict that’s high, that’s 500,000, a million, two million, 10 million, whatever it is.

And so when you have a federal law that across the board, every state, the most that the long-term care facility, the nursing home can be expected to pay out at verdict is $250,000, what does that do?

Smith: And you know, all too often we hear the demagoguery – unfortunately this happens to be a partisan issue, but instead of getting into the politics of it, I’ll just say on behalf of those, we hear the demagoguery on behalf of those supporting tort reform, whatever party they may belong to. In claiming that the plaintiff’s bar is just out for money and that this is just a cash cow for the plaintiff’s bar and that the only reason they care about these issues is because of all the money they get, it is about money. It is 100 percent about money. And those types of ad hominem attacks are just red herrings, because at the end of the day, we’re all going to do this – not that it even matters – but we do it because we have a passion for this. Having worked in the nursing home industry, I hate these places. I hate the neglect that they cause. But that doesn’t even matter what my true motives are because at the end of the day, I can’t get a jury to award that a nursing home must start to hire more people or that a nursing home must undo what it has done. I can’t do that. The only thing that talks in our capitalistic society is money.

So when we have a case that is so atrocious and you just have to think about some of the different types of news articles or even cases that we’ve had where people were basically tortured to death from being eaten by ants, they were neglected so badly that they had bedsores that ate through their body, when you have a case like that, the jury with its enlightened conscience speaks with one voice in assigning damages. And those damages are not only meant to attempt – because you can never make the resident or the family or the estate whole, you can just never do that – those damages are not just an attempt to make them whole. They’re also a deterrent, because if that nursing home has to pay out a couple million dollars, then maybe in the future, it won’t be more optimal for them to save money on staffing. Maybe in the future they’ll spend more money on staffing because they won’t be able to get insurance.

Schenk: That’s right. So when we say it’s all about the money, it absolutely is about the money.

Smith: One hundred percent.

Schenk: It’s 100 percent about the money because generally, money…

Smith: Talks.

Schenk: Money talks is going to be the only way you get remedial measures done, because you hit a nursing home in its pocketbook, things are going to change. And again, this is a podcast hosted by two plaintiff attorneys, but still I would argue that that is the case for any industry. Look at the automobile industry with unsafe at any speed, you have tort lawsuits against companies that progress, and as they progress, the safety features progress.

And by saying that we’re going to cap, that you can expect as an nursing home to only have to pay $250,000, that’s not going to incentivize any safety measures. That’s not going to incentivize any adequate staffing measures to be taken. It’s going to have the opposite effect of patient care. It’s incentive when you get tagged with a $5 million verdict to change your ways. If you get tagged with a $250,000 verdict and you’re the size of McDonald’s, it has no effect. In fact, it makes the long-term care facility or nursing home more powerful.

Smith: And what enrages – at least one of the many things that enrage us about these pieces of legislation that frequently come up throughout the years and are luckily normally defeated is that they couch it in terms of “We have a huge concern for the patients.” No you don’t. That is so disingenuine that it’s mind-boggling.

Schenk: It’s almost as if it’s false. It’s a falsity.

Smith: If you actually had a concern for patients, then in addition to whatever tort reform you’re currently doing, there would also be some sort of punishment for negligence, right? So you’re not even addressing negligence itself. It’d be one thing if this legislation said, “We’re going to limit damages, but also we’re going to have a three strike rule and you’re out of CMS or something similar, where if you’re fined for these types of offenses three times in a given year, then you’re denied Medicare or Medicaid.” But you don’t care about the residents.

Schenk: That’s right, because look, in my view, it goes like this. There are only a certain amount of avenues that society can take to progress safety and patient care in nursing home residents. The first is through legislative actions and laws. Then you have federal regulations through our executive to enforce those laws. And then you have to some extent private regulation where the industry just regulates itself. Those have varying degrees of success. Some would argue, I would argue at least in the concept of self-regulation, it has no significant success.

The most successful way in my experience, and I think statistics bear this out, to increase and progress safety, patient care, dignity of the residents, is through the civil justice system based on the principles that we’ve outlined, which is to say money talks. When a nursing home is punished with a verdict that they have to pay, they don’t want to pay that again, so they will take steps to make corrections to whatever that lawsuit was about, whether it’s understaffing, whether its improper training, whether it’s not running background checks – I can assure you, well most of the time, after getting hit with a verdict won’t make the same mistake twice. That is, of all those methods, legislation, regulations, federal regulations, self-regulating the industry, it’s the civil justice system because of the power to levy monetary fines that must be paid that produces the most amount of progress.

Smith: And you know, and I absolutely 100 percent agree with that, in addition to that, one of the things that always baffles me is when I talk with the regular person on the streets, somebody who is not an attorney, not a defense or plaintiffs bar, somebody who is not involved legislatively in tort reform, just a regular person on the street who supports, or thinks they do, tort reform, because what amuses me is their concept of what happens in a jury trial, it’s very insulting to your fellow citizens that your concept of a jury is 12 people who just cannot contain their own emotions and are so easily swayed by this impossibly seductive silver tongue plaintiff’s attorney who is showing them just the worst pictures and tricking them into somehow awarding millions of dollars above what is necessary.

Remember first of all, this is a jury of constituents. These are regular people from the street from various backgrounds. Remember also that there are two attorneys, or at least two legal teams involved. There are also attorneys for the defense that are talking to the jury. And at the end of the day, what I have found consistently in my jury trials is that jurors are really sharp, thankfully, and while they do have emotions and they do exhibit sympathy, they’re not prone to just wild emotional decisions.

Schenk: Yeah, the idea that some slick lawyer with slick backed hair, shined shoes and a suit is going to through – what’s the word, sophistry?

Smith: Sophistry.

Schenk: Sophistry – con 12 people in a jury box in Mississippi or Georgia or Wyoming just giving away on an emotional basis $10 million to punish a nursing home – I can tell you that does not happen.

Smith: It is absolute propaganda.

Schenk: So what else does Representative King want to do with this resolution? The next thing is this, and I’ve made a notation, an exclamation point notation on this part of the resolution. It’s titled “Maximizing Patient Recovery.” And what that has to do with is when there’s a lawsuit and it reaches a verdict and the verdict is in favor of the resident of the nursing home who’s been injured, this is about making sure that resident gets the most amount of money possible, so maximizing patient recovery.

So this is saying court supervision of the share of damages paid to claimants – “In any healthcare lawsuit, the court shall supervise the arrangement of payments of damages to protect against conflicts of interest. In particular, any healthcare lawsuit in which the attorney for a party claims a financial stake, i.e. a contingency fee,” so in other words, in every single personal injury case against a nursing home which has a contingency fee…

Smith: So in all the plaintiff’s cases.

Schenk: Basically every case, the attorney is going to be able to recover only 40 percent on the first 50,000, 33 and 1/3 percent on the next 50,000, 25 percent on the next 500,000 and so on and so forth. In other words, Representative Steve King of Iowa is limiting the power of the resident who is injured to contract with the lawyer for services, putting a threshold ceiling on the amount of percentage that the attorney can make.

So let me tell you know why that’s not maximizing patient recovery and why that is actually going to be a bar or prohibition in many cases. It’s because negligence cases, medical malpractice cases, cases against nursing homes and long-term care facilities, are extremely risky. They are extremely expensive and only a few lawyers in any state bar do those types of lawsuits.

Smith: Exclusively, yeah.

Schenk: So when a statute like this makes it even more risky for a lawyer, then there’s going to be an automatic drop-off in the amount of cases that are brought because the plaintiff’s lawyer cannot afford to do it. So this has the opposite effect.

And what’s interesting to me is how I just, I mean I don’t understand how anybody on the street, if they read this, would believe this is maximizing patient recovery as opposed to “I’m going to as a lawmaker incentivize attorneys not to take cases.”

Smith: Because what you have to realize, what people have to realize is there are two ways to attack the issue of healthcare companies losing money. One way is to go after the attorneys that bring suit on behalf of injured residents, to disincentivize, because we’re all capitalists. This is a capitalistic society. If I could afford to do these cases, if I had Bill Gates’s money, I probably would because I’m very passionate about this. But these cases are very risky, very expensive, very time-consuming.

So one way that they can attack this problem of healtcare companies losing money is by disincentivizing the plaintiffs from coming forward, which is what they’re doing here. Another way they could do that is by making sure they don’t cause negligence. So why not go in that direction? That’s how you know they don’t really care about the residents. Instead of saying, “Hey, it is now a law that you must have five CNAs per 30 residents,” they’re not going to do that because that’s going to be more expensive to the healthcare people, which is the actual interest that they have in mind. This special interest group, which is all of these nursing homes, Pruitt Health is one, Genesis is one, there are so many out there, they’re putting money into the pockets of these politicians and saying, “No, no, no, no, no. We don’t want to spend more money on staffing. We just want to get sued less. So let’s attack in this direction and disincentivize these lawsuits in the beginning.”

Schenk: That’s right. So I have my own resolution that I am going to attempt to float in the State House of Iowa, and that is the Maximizing Ice Cream Consumption Act, which is to say that the most amount of profit margin that an ice cream manufacturer can have is 10 percent. Is that going to help ice cream lovers eat ice cream, or is it going to disincentivize people from starting ice cream businesses? It’s the same logic. It doesn’t make any sense, especially coming from a Republican, that you want to interfere with the right of adults to contract with each other. But at the end of the day, as you explained, it’s disincentivizing lawsuits against healthcare facilities.

So here we have the Protecting Access to Care Act of 2017 as House Resolution 1215, refer to the Judiciary Committee and Committee on Energy and Commerce for review by Steve King of Iowa. And Steve King is in the 4th District of Iowa, that’s the Sioux City area, Blueberry Ice Cream. So this is not law yet and likely will not be law, hopefully, well it depends once again – we’re in a different climate in terms of our Congress – but I didn’t expect to talk about this for the entire episode, but it really grinds the gears.

Smith: Yes, it does.

Schenk: Burns the toes, or at least as I say. So I apologize to the extent that this episode felt like we were yelling at you, the listener, but I promise that we weren’t.

Smith: We’re yelling for you.

Schenk: We’re yelling for you, unless you’re listening to this and you’re the president of a nursing home. So with that, fair viewer, fair listener, we have reached the conclusion of this episode of the Nursing Home Abuse Podcast. You may download the audio of the podcast on Stitcher or iTunes or wherever you download, whatever application you use to download your podcasts, or you may watch us. As the loyal viewer of this podcast knows, last week’s episode featured the very first graphic in the history of this video podcast. In other words, it’s not just us talking – you got to observe a couple of different images as well, so that was really good. So that’s the incentive. As Steve King is trying to disincentivize lawsuits against nursing homes, we’re trying to incentivize you watching us. So we’ve provided some graphics. Anyways, you can watch us on our YouTube channel or on our website, which is NursingHomeAbusePodcast.com. We thank you very much for your viewership and your listenership and we will see you next time.

Smith: See you next time.

Thanks for tuning into the Nursing Home Abuse Podcast. Please be sure to subscribe to this podcast on iTunes or Stitcher and feel free to leave us some feedback. And for more information about the topics discussed in this episode, check out the show website – NursingHomeAbusePodcast.com, that’s NursingHomeAbusePodcast.com. See you next time.