Jun 9, 2023 - Health

How nursing homes could face more patient lawsuits

Illustration of hand with gavel breaking a red cross symbol.

Illustration: Sarah Grillo/Axios

Nursing facilities that take Medicaid or Medicare could face increased exposure to negligence lawsuits in the aftermath of a Supreme Court ruling in a major patients' rights case.

Driving the news: Justices ruled 7-2 on Thursday that nursing home residents can bring civil rights actions against providers over alleged abuses.

  • The case, Health and Hospital Corp. v. Talevski, took up whether tens of millions of people in safety net programs can go to court if their rights are threatened.
  • It was brought by the wife of a dementia patient who was transferred from an Indiana nursing home after his condition rapidly deteriorated. The family claimed that his treatment, including the use of psychotropic drugs, led to his decline and violated the minimum standards of care facilities must follow to be in Medicaid.
  • The court's conservative supermajority disagreed with long-standing arguments that health providers or individuals shouldn't be able to sue over Medicaid coverage decisions.
  • The case came at a particularly fraught time, after justices struck down the federal right to abortion and touched off a national debate about health equity and the law.

Go deeper: The decision offered clarity on how Medicaid requirements are enforced.

  • The Centers for Medicare and Medicaid Services can move to bring providers who violate Medicaid rules into compliance, through steps including the withholding of federal funds.
  • The faster option is to go to court and get immediate relief. While Medicaid law doesn't authorize beneficiaries to do that, a civil rights statute known as Section 1983 has provided a way for individuals to enforce the rights guaranteed under federal programs, per KFF.
  • The majority of justices agreed in this case that Medicaid law may be enforced through Section 1983.

What they're saying: "We believe, as did the federal government, that Congress never intended to subject government-run facilities exclusively to additional legal claims for violating Medicare or Medicaid requirements of participation," said James Segroves, counsel for the American Health Care Association, a nursing home lobby.

  • The ruling could create a chilling effect on the industry, said Rebecca Brommel, a partner at Dorsey & Whitney, who works with nursing homes.
  • "There's a possibility that more providers, potentially those coming into the market will do a risk analysis of whether or not they want to [take] Medicaid and Medicare or be private pay only," Brommel said.
  • Additionally, the ruling might change nursing homes' considerations of whether to challenge citations or regulatory violations versus just paying the associated fine, she added.

The other side: Patient advocates said the high court decision means Medicaid law still has teeth, Shira Wakschlag, senior director of legal advocacy at The Arc of the United States, told Axios.

  • "This decision also ensures there is accountability for service providers, which has a direct impact on the quality of services and supports that millions count on," Wakschlag said.

What we're watching: Congress still could amend the law and clarify that Section 1983 was not intended to be a private cause of action, which would reverse the Supreme Court's ruling.

  • In Indiana, where the vast majority of nursing homes are state-owned, the ruling will affect medical malpractice law, Randy Fearnow, a partner at Quarles & Brady who wrote an amicus brief for nursing facilities at the 7th Circuit, told Axios.
  • "Now that the court has spoken, Indiana providers will have to pay close attention to the insurance market and double down on efforts to limit liability associated with nursing home care," Fearnow said.
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