Letter, if Not Spirit

August 20, 2009

Skilled Nursing Facility administrators often complain the survey process is too focused on the letter of CMS guidelines, and not the spirit of them.  Nurses grouse that good care is evident despite a lack in documentation; “quality of life” is too subjective for so-called “paperwork deficiencies,” and so on.  Earlier this week an appeals court in Chicago turned the same tables onto the Illinois Department of Public Health.

An SNF appealed a Type A, serious type, violation.  The IDPH fine was $10,000.  The successful argument was not based on the merit of the deficiency tagged, but on the timing of the notice.  The Department failed to notify the facility of the Type A violation within 60 days of the end of the annual survey.  (Notice was actually given on the 66th day, though regulation requires it within 60 for violations of that type)

The facility’s lawyer successfully argued that the Department lost jurisdiction to prosecute a violation because the notice fell outside of the window prescribed by Administrative Rule.

This case highlights an important issue within the current regulatory scheme.  1) Such deadlines are essential if facilities are to learn from their mistakes.  That is, prosecution of violations is not merely punitive, but compels facilities to do better next time.  A deadline lets facilities know that, if there are changes to be made, you’ll be told about them in a reasonable time.  This allows regulatory codes like IDPH’s and CMS’s to have what is known as a “channeling function.”  Sure 66 days may be no more unreasonable than 60 in this respect, but for a deadline to have the necessary channeling function effect, it must have a definite cutoff.  2) The regulatory scheme is necessarily (and some would argue counter-productively) adversarial.  It seems like the facility’s lawyer “gamed the system” or “won on a technicality.”  This argument, incidentally, is the same as when facilities claim to have only received a “paperwork deficiency” or have been “caught without documentation.” At the end of the day, an adversary system creates incentive to “beat” the other side, but it also incentivizes winning on the margins.  That is to say it discourages substantive change (which takes more energy and resources than winning on technicalities).

The ideal would be to marry the channeling function of deadlines and the innovation and energy created by the adversarial system while divorcing this kind of small ball, winning on the margins attitude.  That kind of third way is, alas, tremendously difficult to find.  However, I think cases like this one expose the issues that come along with decisions based on the letter, if not the spirit of the Law – – or in this case, Rule.

*Thanks goes to LSN’s Week’s News newsletter for source material.


Tennessee state legislators introduced a bill last month seeking to limit the payout awards for negligent care lawsuits against nursing homes.  If signed into law, this bill would put an effective cap on the pain and suffering piece of the court’s judgment, either at a whole dollar amount (the Tennessee bill suggests $300,000) or a percentage of the so-called actual damages (e.g. medical bills, lost income, etc.).  The sides of the debate on these type of bills line up approximately this way:

Against Caps:

1) To limit the judgment amount in negligent care cases chills the deterrent effect of such lawsuits.  Or, simply put, nursing home owners will not try harder to deliver non-negligent care unless they are convinced to do so with serious lawsuit damages.

2) Lawsuits involving seniors at nursing homes almost inevitably have lower actual damage awards than other negligent care (i.e. medical malpractice) suits because the victims are no-longer working, their loved ones have a greater expectation of their dying(and thus, presumably suffer less at their death), and they are less likely to have a recovering spouse (the presence of a surviving spouse generally increases wrongful death/pain and suffering lawsuits).  Thus, to cap the pain and suffering awards makes such suits less effective at a) compensating the plaintiff/plaintiff’s family and b) deterring the same bad acts in the future (see point 1 above).

For Caps:

1) Analogy to Medical (i.e. hospital and physician) Malpractice: Many states (though notably not Tennessee) limit medical malpractice lawsuits in a number of interesting and creative ways.  The most common of which is to place some kind of cap on the pain and suffering awards of such suits, but another good option is to have an appointed board of specialists review every medical malpractice complaint and evaluate it for merit before the suit goes on to the court.  The rationale is that medical services are in short supply and such measures prevent physicians from leaving one state for another because of “frivolous lawsuits.”  Long Term Care is as well a necessary and limited resource.  Placing these type of caps on judgment amounts will ensure the perpetuity of LTC facilities, but at the same time strike the necessary balance of compensating plaintiffs/improving the delivery of care.  

2) Long Term Care is so heavily regulated, that it is unjust to allow so-called free-judgment lawsuits against LTC facilities.  The state has taken it upon itself to regulate nursing homes, and fine them, sometimes heavily, for violations of those regulations.  Plaintiffs should not be allowed to seek extravagant compensation on top of this statutory punishment when negligent care occurs.  A judgment cap is exactly the right maneuver to seek a just balance between compensating plaintiffs and preserving a highly regulated industry.  


Tough one.  There are more (and more subtle arguments) out there on this debate.  But, it is interesting to think through.  On some bottom level it comes down to how nursing homes are going to be considered in the future.  Are LTC facilities businesses like retailers and dealerships, delivering care for cash, preserving the bottom line for shareholders?  Are they a public trust, something to be preserved as a community resource above most every other consideration?  Should they be considered something all-together different?  Some combining balance?  

It is a good discussion.

Like many of you, I have been pouring over the CMS Nursing Home Compare Five Star Ratings today.  The results have been . . . unexpected.  I operate a facility in Illinois, a state somewhat notorious in the Long Term Care industry, and when I looked at the ratings of facilities in my geographic region, I was truly surprised.  The variance is what got me.  Homes I know are pleasant, and seem to be well-run, scored much worse than those with bad reputations.  Many had perfect marks in the Quality Measures domain, but only one star in the Health Inspections domain.    

To try to get a handle on this new metric, I have also been pouring over the Technical Manual for the Five Star Rating System.  Entitled, “Design for Nursing Home Compare Five-Star Quality Rating System: Technical User’s Guide”, the 23 page report does  a fair to good job of laying out hte technical details of how the different domain scores are calculated.  My objection to this manual is that it does not give a very good rationale for why the score algorithms were selected over others.  I found myself wondering, ‘how did the Techincal Expert Panel (TEP) decide to score a domain this way instead of another.’  There are vague justifications: “distribution is based on CMS experience and input from the Project’s TEP” (page 5), but no real explanation or rationale.  

This Technical Manual may be (somewhat) easy to use then, but difficult to critique.  However, I would like to discuss one issue that bothered me.  First, I found it difficult to locate the study cited to on page five, “The Relationship Between Nurse Staffing Levels and the Quality of Nursing Home Care.”  (executive summary located here).  But, in the process of searching for this 2001 CMS staffing survey and study, I discovered the following, interesting article, first published in the scholarly journal, The Gerontologist: “Comparing Staffing Levels in the Online Survey Certification and Reporting (OSCAR) System With the Medicaid Cost Report Data: Are Differences Systematic?,” Bita A. Kash, PhD, Catherine Hawed, PhD, and Charles D. Phillips, PhD.  (abstract located here).  This article discusses some interesting results from a study of the OSCAR system.

The Techincal Manual cites the Online Survey Certification and Reporting (OSCAR) System as the source data for the staffing measures/Staffing Domain.  This is the same data used now for Nursing Home Compare, although the staffing data was not compressed into a quintile metric before the Five-Star Rating.  The OSCAR database includes essentially every piece of information a surveyor gathers during certification/licensure surveys and complaint surveys.  However, information on nursing home operational characteristics (like staffing ratios and Case-mix) are reported by the nursing homes themselves.  Inspectors review the information, but the data are not formally audited to ensure accuracy.  The study Kash, Hawes and Phillips study cited above arrives at a critical result to this operation.  The study sought to assess the validity of the OSCAR staffing data by comparing them to staffing measures from audited Medicaid Cost Reports.  The results of this study were that “[A]verage staffing levels were higher in the OSCAR than in the Medicaid Cost Report data.”  Meaning that “[C]ertain types of facilities consistently over-report staffing levels.”  This 2007 study went on to say that the implications of these findings are that “reporting errors will affect the validity of consumer information systems, regulatory activities, and health services research.”  

In other words, OSCAR data is inaccurate in reporting staffing levels and some facilities will have a lower staff-to-patient ratio than the data reflects.

What does this mean with respect to the Five-Star System?  Because the staffing ratios/RUG-III modifiers are relatively scored (i.e. a score based on how your facility matches up to other facilities in the same category), if a facility is over-reporting its staff ratios (as the above study suggests OSCAR does), then every facilities score in the Staffing Domain will be inaccurate.  If your facility happens to have a lower-ratio and higher complexity modifier than one of the innaccurate reporting facilities, your relative position will be even lower than it otherwise would have been if all facilities staffing ratios were accurately reported.  

The Staffing Domain can skew the entire star system.

Of course, it would be wrong to discard CMS’s new system based on the strength of one adverse study, but Administrators and academics need to give the whole Five-Star System a hard look.  The Staffing Domain is an important indicator of quality of care.  It should be in any comparison metric, provided the data source is accurate.  There have been a lot of criticisms leveled at the Five-Star System, but drilling down into the technical manual, I think, can provides the most salient.  

I encourage everyone reading this to do just that.  Keep this conversation going.

A Washington state court decided yesterday that a 91 year-old man with dementia and demonstrated delusions was competent to stand trial for second-degree murder.  The accused, Joe Conway, allegedly shot and killed a staff member at the nursing home where he lived when the victim brought food into Mr. Conway’s room.  After a two-day evidentiary trial, the court found Mr. Conway competent, and put his case on the criminal docket.  

As awful and shocking as this news sounds, it is really not all that surprising given the tortured logic the “insanity defense” has gone through in the last forty years of Supreme Court jurisprudence.  All crimes, in order to be crimes, require an action and a mindset.  If one commits the prohibited action (taking a the purse off a woman on the street) with the prohibited state of mind (with knowledge that it is not one’s own and to deprive the rightful owner enjoyment of the purse) then a crime has be committed.  If one commits the action (snatches the purse) without the mindset (but mistakenly believes it was one’s own to start with) no crime has been committed.  This the foundation of the insanity defense.  Essentially, it says that a person is incapable of forming the prohibited mindset, thus their actions are not criminal.  

Sounds simple, and if Mr. Conway has a dementia diagnosis, it would seem impossible for him to form the requisit intent for second-degree murder.  However, intent can only ever be inferred, and the several states and the Supreme Court have devised many different tests for inferring such intent: 1) the M’Naghten test: the defense will hold if at the time of the misconduct, the defendant (accused) lacked the ability to know the wrongfulness of his actions or understand the nature and quality of his actions (i.e. “does not know right from wrong”); 2) the Irresistible Impulse test: the defense will hold if the defendant was unable to control his actions or conform his conduct to the law (i.e. lacked self control and free will; suffered an impulse he could not resist); 3) the Durham test: the defense will hold if the defendant’s conduct was a product of mental illness (i.e. but for the mental illness, the defendant would not have done the act); 4) the Model Penal Code test: the defense only holds if the defendant lacked the substantial capacity to appreciate the criminality of his conduct, or conform his conduct to the requirements of the law (i.e. a combination of the M’Naghten and Irresistible Impulse tests).  Different states use different tests, but as is fairly clear even on first reading, there is a lot of wiggle room in the language of all of the tests. 

So, how does a 91 year-old dementia patient not fail these tests and be found competent?  Unfortunately, the theoretical underpinning for the defense does not really support the court’s finding.  But the tests likely do.  If Mr. Conway had in his mind to kill a person, even if he was delusional as to who the person was or why he was killing him, then, all things being equal, the M’Naghten would not save him.  Dementia standing alone would likely not hold the defense under any of the other three.  Dementia, generally, does not create an impulse to kill, nor is it a mental illness which channels someone towards murder.  I suspect, though, the Supreme Court will revisist these tests in the next few years – – and it will probably be a case like Mr. Conway’s that presents the issue.  Age related dementia is unique enough from other mental illnesses that the Court may carve out some special consideration in the “insanity defense.”  With the next crest of seniors reaching old-old age, the issues may come to a head fairly soon.

*On a totally unrelated note, the insanity defense was first suggested in Anglo-American legal theory by Lord Chief Justice Tindal of the Court of Common Pleas – – this guy was an absolute genius, though he is best known for acting as Queen Caroline’s defense attorney (successful) in her adultery suit.  His wikipedia entry can be found here.

The Illinois Nursing Home Care Act prohibits a long term care facility resident from waiving her right to a jury trial before the commencement of any action.   What this means is LTC residents cannot enter contracts that have a waiver of the right to trial.  If they enter into these types of contracts, the clause waiving the right to trial (and/or jury trial) will be null and void.  

Many LTC facilities seek to arbitrate disputes instead of litigating them.  This protects the facilities from expensive litigation and it protects residents and families because the attendant costs of settling a dispute are much lower.  

The rule (sections 3-606 and 3-607 of the Illinois Nusing Home Care Act) conflicts with this desire to arbitrate becasue arbitration agreements generally ask residents to waiver their right to trial in exchange for the facility paying for and committing to arbitration.  

A recent Illinois 5th Appellate District Case confronts this conflict head-on.  Gott v. SSC Odin Operating Co. involved a wrongful death action brought by the representative of a deceased LTC resident against the owner corporation.  The corporation tried to enforce an arbitration agreement the resident signed on admission.  It argued the Illinois rule is preempted (basically overruled) by a Federal law, the Federal Arbitration Act, which promotes arbitration clauses in service and health care industry contracts.  The court found for the resident’s family, concluding the Federal Arbitration Act did not preempt the generally applicable state contract law and defense.  The Gott family was able to go on with their lawsuit against SSC Odin Operating Co.

The consequences of the Odin decision are not that far-reaching (after the IL Supreme Court refused to review the decision, it only has effect in the IL 5th Appellate District), but they do highlight a ongoing struggle in LTC:  protecting the right to sue vs. reducing the costs of disputes (for both facililities and residents).  

I was honestly surprised at the Odin  decision.  Surprised it came down the way it did (similar cases have found Federal preemption more often than preserving state defenses) and surprised the IL Supreme Court punted rather than review the case to give statewide guidance.     This is a much larger issue than I plan to write in this post, but perhaps a lengthier analysis is in order soon in the future.  Until that time, please see other posts on this issue here and here and at the Wall Street Journal.

Richard Susskind, professional futurist and this week’s attorney kill joy number 1, recently told the legal newspaper, AM LAW DAILY, that “the party is over” for lawyers.  Gone soon will be the enourmous salaries and juicy partner deals of big time corporate law for huge armies of lawyers.  Instead, he predicts the practice of the law will be relegated, primarily, to generalized, legal risk consultants.  

From anecdotal evidence, I can attest that the long term care industry’s recent push to hire health care lawyers for Admistrator’s position, is clearly in-line with this trend.  

Regluation on long term care facilities is up, corporate legal work is down.  The credit crunch is souring the growth of business sectors (like corporate law) which require workers to spend massive educational outlays before joining the work force.  I forsee more lawyers managing highly regulated businesses, especially health care service providers like nursing homes, in the not so distant future.  Any Administrator who has tangled with state surveyors over the interpretation of FTag guidance can attest, reasoning and argumentation skills are very useful in our business.  If Susskind is right, then more lawyers will be joining the Administrator ranks.