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Kentucky Nursing Home Operators’ Challenge With Lawsuits Is Ongoing

Significant dollar amounts have been recently awarded to those who have filed lawsuits against providers.  Kentucky does not have a limit (cap) for the dollar amount for damages that one can recover if injured. A cap placed upon the amount of damages one can recover if injured would help to reduce some of the recent nursing home jury verdicts.

As one Corporate Attorney representing a large Nursing Home chain in the state explained, “The industry…. In my opinion is close to rock bottom. There are so many things that are going on that are making it tougher and tougher for providers to survive.”

Leading Age Kentucky CEO/President Timothy Veno voiced similar concerns of “seeing some pretty hefty jury awards in Kentucky over the past several years,” which have contributed to increased insurance rates for SNFs and long-term care facilities in the state.

Kentucky tort law is one of the worst ones in the nation. In 2018, the legislation tried to address this issue with the passage of the medical review panel law, Senate Bill 2, which was sponsored by a group of Republican state senators. Senate Bill 2 subjects healthcare lawsuits to be reviewed by a medical review panel so that the findings of the panel can be used in later court proceedings. However, the medical review panel does not have any impact on the filing of the lawsuit. Senate Bill 2 does not limit damages for noneconomic injuries.

In order to set a cap on dollar amounts for damages that could be recovered for non-economic injury to be implemented in Kentucky, the state’s constitution would have to be amended. The Kentucky constitution states that there cannot be caps on personal injury claims. And to change the constitution, there needs to be a two-thirds majority vote in both the House and the Senate, which is a higher bar than just getting a law passed; therefore the tort challenge in Kentucky is an extremely difficult situation.

Members of the Kentucky Association of Health Care Facilities (KAHCF) have reported major increases in insurance premiums from 2016 to 2017, with rates rising from approximately $2,300 per bed to greater than $3,300 per bed, which creates an even greater concern for providers with the thin margins faced already. Setting a cap on damages that could be recovered for non-economic injuries would allow providers to insure against a firm number.

Kentucky has no tort reform and is an outlier in terms of the costs of long-term care (LTC) defense and settlement of liability claims (loss rate). The cost has risen sharply over the past decade with numbers from actuarial analyses 2007 to 2017 showing a loss rate of $1,480 per occupied bed to $6,410 per occupied bed.  The monetary hit, as well as the material impact, has the potential to be a fatal blow that not many providers could survive if hit with a large jury award.

Blue & Co. can assist you with the mitigation of risks in the post-acute/LTC areas. We provide risk mitigation education and Legal Nurse Consulting to review for risks as well as the full spectrum of Legal Nurse Consulting services for providers. If you have questions or would like to talk, please contact our post-acute care team today.

If you’d like to learn more about our post-acute care services, click here.


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