Lawsuit Abuse Reform

PHCA and our members have been working to enact meaningful lawsuit abuse reform legislation in Pennsylvania since 2011, and we truly believe that now is the time. There have always been strong supporters and strong detractors—the fight for reform has been a bitter one, and it’s only going to get more hostile.

  • The Pennsylvania Health Care Association (PHCA) strongly supports legislation that limits punitive damages to 250% of the amount of compensatory damages for long-term care providers. Skilled nursing facilities, personal care homes and assisted living residences would be protected from out-of-state predatory lawyers in the way that physicians have been for 15 years.
  • This type of legislation does not limit compensatory damages nor does it change the definition of punitive damages in the MCare law in effect for physicians since 2002.
  • Skilled nursing facilities currently settle virtually 100% of their cases for fear of punitive damage awards, and one national skilled nursing facility chain has sold its more than 20 facilities and fled Pennsylvania. Today, Pennsylvania is ranked second among all 50 states in total medical malpractice payouts and third in payouts per capita. In 2014, 95 percent of the payouts were settlements, not judgments…driven by fear of punitive damages.
  • These cases have been driven primarily by predatory out-of-state lawyers who advertise heavily in newspapers throughout Pennsylvania, trolling for plaintiffs. Since 2011, their advertisements have appeared more than 150 times in Pennsylvania newspapers with 37 full-page advertisements attacking 62 nursing facilities since January 1, 2016. The ads have brought public mistrust and anger against an industry that cares for the frail elderly of our commonwealth and made hard-working staff embarrassed to go to their local grocery store.
  • Liability costs continue to rise for Pennsylvania skilled nursing facilities. According to a new actuarial analysis of liability costs, the liability cost per Medicaid day in Pennsylvania is $5.39. Given that Medicaid paid for about 19.35 million days of care in 2015, more than $104 million of Pennsylvania Medicaid dollars was spent on liability related costs in 2015, much of this in contingency fees to out-of-state predatory lawyers. This is an increase of more than $9 million over previous expenditures. Most of the $104 million could have been used to improve the quality of care and the quality of life for skilled nursing facility residents.
  • The high costs of defending inappropriate and unnecessary liability claims add to the financial pressures on each Pennsylvania skilled nursing facility, and they continue to increase, according to the findings of an analysis released recently by Aon Global Risk Consulting in November 2015.
  • Over the past year, Pennsylvania’s skilled nursing facilities have seen the long-term care loss rate grow by 5.5 percent, due to a 3 percent annual increase in the number of claims. The projected Pennsylvania 2016 loss rate, which is a combination of the severity and frequency of claims, is expected to increase from $1,810 in 2014 to $2,020 per occupied bed. This means that a skilled nursing facility with 100 occupied beds can expect approximately $202,000 in liability expenses in 2016.

If you need additional information, or if you’d like a copy of an ad that was placed in your local newspaper, please email Zach Shamberg, PHCA President and CEO at zshamberg@phca.org or call him at 717-221-7925.

Issue Briefs

Lawsuit Abuse Reform

Skilled nursing facilities, personal care homes and assisted living facilities are under attack from predatory, out-of-state lawyers. Lawsuit abuse reform must be enacted in the 2017-18 legislative session to combat these attorneys and keep Medicaid dollars where they belong: at resident bedside in Pennsylvania.

June 2018

Nursing Facility Research

2014 Long Term Care General Liability and Professional Liability Actuarial Analysis

Aon Global Risk Consulting report indicating liability costs continue to rise for long-term care facilities. The 2014 analysis provides estimates of loss rates, or the cost of liability to the beds that care providers operate.

November 2014
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