Americans should beware of plaintiffs attorneys bearing gifts. We will all be worse off now that judges and juries have taken over health care regulation in the California case of Lavender et al. vs Skilled Healthcare Group, Inc.
Lavender represents almost everything that is wrong with our legal system. A few profit-minded lawyers filed a so-called class-action suit. Making a claim based on bureaucratic rules rather than patient harm, they won a verdict of $671 million against a company with only a little more than that in annual revenue. In effect, the judge and jury usurped the state’s role in regulating health care facilities.
The litigation originated in the arbitrarily set legal requirement that skilled-nursing facilities provide a minimum of 3.2 hours of nursing care per patient day. What is frustrating is that this capriciously set ratio is not supported by any study or other rigorous review proving it necessary or even desirable for quality care.
It is instead a number purely drawn out of the air 10 years ago by California legislators who at the same time mandated that new regulations be adopted to further explain to caregivers how to comply with the 3.2 requirement. Those regulations never came. This opened the door for plaintiff attorneys to put their own spin on how facilities should be staffed.
In the Lavender case, plaintiff attorneys were successful in inflating their claim 100-fold by convincing their local judge that the 3.2 facility wide ratio should be multiplied per each patient within the class despite the fact the ratio is derived as a single ratio based on a facility wide aggregate.
What that means is that with this sleight of hand the calculated damages ballooned from $6 million to an out-of-control $600 million dollar claim. All this based on a technical violation of a poorly written statute in the complete absence of any injury.
Oh, and let’s not forget that these local attorneys who stand to earn tens of millions of dollars for themselves convinced their local judge that this was the correct way to apply the arbitrary calculation because only a “modest” award would result. All the while, defense attorney pleas that the damage exposure was “annihilating” were dismissed as exaggerated.
Perhaps it wouldn’t be such an abuse of the judicial system if in fact the facilities in question were understaffed. Not the case, according to defense attorney Kippy Wroten, who argued that “these facilities were always appropriately staffed.”
Instead, says Wroten, the issue is one of “inadequate documentation, not inadequate care;” documentation that was never required under any law to be maintained. The question therefore becomes whether any company should be required to prove that they complied with a mythical standard created by plaintiff lawyers.
Because the California Department of Public Health failed to adopt the rules needed to define the 3.2 calculation, the dispute devolved into a battle of methodologies. The Department of Public Health admits that “historically it has been difficult for interested parties to easily and independently determine whether there was adequate nurse staffing to provide the minimum 3.2 nursing hours per patient day.”
Despite this difficulty, no regulation has ever been implemented to clarify who to count, when to count them, and what records to keep to document compliance. Regulations intended to define terms, describe documentation and posting requirements were ultimately adopted in January 2009.
But implementation remains contingent upon an appropriation in the state’s annual Budget Act that still has not been made. Since no appropriation was made and no additional statutes were enacted, the regulation never became operational.
As a result of this rulemaking fiasco and the willingness of a single small town judge, 24 independent companies and their investors now face bankruptcy. A true example of the judicial system gone awry where the only real benefactors are the attorneys.
Tort reform advocate Tracy Leach is the former Central CA Director, California Citizens Against Lawsuit Abuse (CALA).
