Nursing Home Legal Alert - 5/19/2020

An important message from the Hurwitz & Fine COVID-19 Response Team

This legal alert contains timely news on the impact of COVID-19 on medical and nursing home liability claims.

Statewide Survey of All Healthcare Immunity Provisions Applicable to COVID-19
Are you curious to see exactly what immunity provisions are in place for both healthcare facilities and individual healthcare providers in every state? We were — so much so, that we have compiled this nationwide state survey covering every Executive Order, Government Code, proposed Senate Bill and Act that offers some form of immunity to frontline workers and/or facilities dealing with the COVID-19 pandemic, with helpful links to each.
 
New Executive Order Requires Testing For Staff and Rolls Back Admission Requirement
Governor Cuomo issued new Executive Order 202.30 imposing further regulation on nursing homes in response to the COVID-19 crisis on May 10, 2020.
 
Per this new Order, the operator and administrator of all nursing homes and adult care facilities must test or make arrangements for the testing of all personnel – including employees contract staff, medical staff and administrators, twice per week. Any positive tests must be reported to the Department of Health no later than 5:00 p.m. the following day. Any personnel who refuse to be tested will be considered to have outdated or incomplete health assessments and shall therefore be prohibited from providing services to the facility until such testing is performed. We previously discussed the actions that a facility must take in respect of COVID-19 positive employees, here.
 
The Department of Health then issued a Dear Administrator Letter (DAL), confirming that the facility may conduct the testing itself, contract out for testing, or direct personnel to community test sites. If the facility directs personnel elsewhere, the facility must implement measures to obtain the test results. The DAL also clarifies that employees who work three days per week or less need only be tested once per week, and that the testing requirement does not apply to home health and hospice agency staff serving patients who reside at a facility. Additionally, personnel who test positive for COVID-19, or for COVID-19 antibodies are exempt from testing.
 
Criticism has already been issued about the “impossible” task of conducting nearly 400,000 tests per week, and Stephen Hanse, President of the New York State Health Facilities Association and the state Center for Assisted Living said the facilities will need “significant assistance” in conducting such a volume of testing, particularly given that since the first New Yorker tested positive for the virus in early-March, a total of 1.2Million tests have been administered statewide.
 
Finally, the Executive Order also rolls back the much scrutinized decision requiring nursing homes to admit COVID-19 positive residents, which we outlined here. Now, any general hospital shall not discharge a patient to a nursing home unless the nursing home operator or administrator has first certified that it is able to properly care for such a patient.  The Order further states that any general hospital may not discharge a patient to a nursing home without first performing a diagnostic test for COVID-19 and obtaining a negative result. This is likely a welcome change for those critics of the Governor’s prior Order.
 
Insurance Brokers Looking for Solutions to the Troubled Nursing Home Market
2019 saw an increase in nursing home litigation, both in frequency and in severity. In its 2019 long term care providers study, insurance broker Aeon estimated that losses would increase by 5% and claim frequency would go up by 2% annually. However, the Insurance Journal reported in January that some brokers saw increases of at least 12% to 15% for senior living facilities, even on accounts with no loss histories, and capacity took a hit also. In a historically unprofitable market, carriers are now understandably concerned about the effect that COVID-19 will have, even as many states offer sweeping immunity from liability for nursing homes and adult care facilities.
 
James McNitt, area President for Risk Placement Services Healthcare Division in Chicago states “My concern is that the nursing home space is going to continue to have a deteriorating reputation as a result of this and their occupancy rates are going to be way down – therefore making less money – and they are already not able to pay their insurance premiums,” he said. “Their insurance isn’t going to go down, in fact, it’s going to go up and they already can’t even afford it. It’s going to be a bad time to be a nursing home operator.”
 
Some carriers have already implemented COVID-19 specific applications that require the long-term care facility to state if they’re aware of positive virus cases among staff or residents. This is a dangerous move for the insured, because if someone tests positive after the application goes through the carrier could say that it was a potential misrepresentation.
 
Carriers are reportedly also enacting broad COVID-19 exclusions on new and renewal business, placing moratoriums on writing medical professional liability business until mid-May, or being extremely selective on what types of facilities they will write and where they will do business. States like New York, New Jersey, California and Florida are considered highly litigious and particularly difficult to find coverage for right now.
 
However, Steve Spina, executive Vice President of underwriting at TDC Specialty Underwriters says there are still competitors and capacity in the market, and it is a long way off from an affordability crisis. He acknowledges that nursing homes are financially squeezed and may not be able to take on additional premiums so they may choose to self-insure some layers of coverage to keep costs down, but he doesn’t think rates will go up more than they were before the virus hit.
 
It remains to be seen in the coming months and years what the true impact of this virus on an already strained insurance market will be. It is safe to say that it will unlikely be smooth sailing, for both facility administrators and carriers, as they navigate an industry that has been thrust into the limelight.

 

This past week saw more regulations and rollbacks in an industry that has been kept on its toes with ever-changing Orders and Directives throughout the COVID-19 pandemic. Of course, as more information comes to light and methods are tried and tested, we would expect the parameters by which a facility must operate to change in reflection to these. However if, or indeed when lawsuits are brought against facilities as a result of COVID-19, it will be imperative to recall exactly what was required of nursing home and adult care facilities when, how these requirements changed on a weekly, and often daily basis, and whether these regulations were practical, or even possible to abide by without government assistance. With insurance premiums skyrocketing, creating a reduction in operating income and the potential for forceful closure of facilities, it is now more important than ever to be prepared to defend, and deter, lawsuits against institutions created solely to protect and care for society’s most vulnerable.

As a public service, we are pleased to present this legal alert, which aims to provide our clients and subscribers with timely information on how the COVID-19 pandemic may impact medical and nursing home claims.  In some jurisdictions, newsletters such as this may be considered: Attorney Advertising.
 
If you know of others who may wish to subscribe to these legal alerts, please feel free to forward it. If you wish to subscribe or unsubscribe, please do so at the bottom of this newsletter.

Your COVID-19 Medical & Nursing Home Defense Team
is here to answer your questions:
V. Christopher Potenza, Esq. ([email protected])
Patrick B. Curran, Esq. ([email protected])
Stephanie L. McCance, Esq. ([email protected])

For more information on our COVID-19 Legal Response Team,
including Business Services, Coverage, and Labor & Employment, click here.

For more legal updates regarding the coronavirus, click here.