Dec 19 2017

Morrison Mahoney Long-Term Care Update – December 2017

Nursing Home

SJC Adopts New Rule Applicable to Medical Malpractice Actions

The Supreme Judicial Court recently approved and promulgated Superior Court Rule 73. Rule 73 was adopted in response to the improper management of medical malpractice actions, subject to G. L. c. 231 , § 60B, that had been occurring throughout the Commonwealth. Changes under Rule 73 include, among other things, a requirement that the plaintiff file an offer of proof within 15 days of the defendant’s responsive pleading, that the plaintiff’s failure to file such an offer of proof may result in a finding that the plaintiff failed to present sufficient evidence to raise a legitimate question of liability appropriate for judicial inquiry, and that a party demanding a tribunal shall file such demand, specifying the applicable field of medicine, within 30 days of the filing of the answer. In short, Rule 73 aims to bring the management of medical malpractice actions in closer compliance with the statutory mandate pursuant to G. L. c. 231 , § 60B. More information can be found here:

Proposed State Regulations Would Ease the Use of Automated Pharmacy Systems

Proposed Rules 9.08 and 9.10 are seeking to ease the use of technology in the facilitation of pharmaceutical services. Specifically, the proposed rule would allow a pharmacy to dispense controlled substances from an Automated Pharmacy System to a patient during or after pharmacy hours of operation and dispense controlled substances from an Automated Dispensing Device located in a health care facility, if certain conditions are met. This is a clear step towards the implementation of technology in the facilitation of controlled substances in some health care facilities, however, it appears that these regulations do not address the dispensing of controlled substances in long-term care or skilled nursing facilities that lack on-site pharmacies.

To read the Draft Regulations, go to:

Restraints in Nursing Homes

On October 1, 2017 the Center for Medicare and Medicaid Services implemented changes to the MDS impacting Section P that is now known as “Restrains and Alarms.” Restraints in nursing homes are prohibited when used for discipline or convenience purposes. There are times when the use of a bed alarm may meet the definition of a restraint, as an alarm may restrict a resident’s movement. A full assessment of the resident’s medical records, cognitive and physical limitations, and effects of the alarm on the resident must be completed before implementing a bed alarm. This change highlights CMS’s aim to increase freedom of movement in nursing homes and the pattern of implementing more traditional fall-risk interventions instead of bed alarms in nursing homes.

The Long-Term Care Facility Resident Assessment Instrument User's Manual can be found here:

CMS Measures Inventory Tool (CMIT) – Making Sense of CMS Quality Measures

As part of CMS’s new Meaningful Measures initiative, CMS recently launched an online CMS Measures Inventory Tool (CMIT). The application is web-based and lauded as user-friendly. CMS hopes that tools like the CMIT will increase transparency of its own quality measures and make it easier to coordinate and align quality measurement efforts across healthcare providers.

To try out the CMIT, go to:

Assisted Living

Assisted Living Residences – Consumer Rating and Regulatory Outcome Database Coming January 2018

Originally announced in September, Formation Healthcare Group and Vision LTC have developed a database to reflect quality measures in Assisted Living Residences across the nation. The database is currently in beta testing and is scheduled for a full release in January 2018. For a subscription fee, this database is nationwide and provides access to consumer rating data and regulatory outcomes across the country, taking into account state-specific regulations and terminology, and creating a single dataset.

For more information on the database, and to subscribe, go to:

Home Health

New Home Health Regulations Go Into Effect January 13, 2018

The sweeping changes to home health regulations released by CMS earlier this year takes effect on January 13, 2018. The 374-page rule, aimed at increasing patient rights and setting clear standards for coordination of care, requires home health agencies to develop training and competency programs for staff and to create more individualized and comprehensive care planning processes that take into account evaluations of a caregiver’s qualifications and involvement in the patient’s plan of care. The regulations also set strict standards for protecting against unanticipated discharge from home health services and require agencies to develop comprehensive quality assessment and improvement programs. The new conditions, required of all home health agencies that participate in federal Medicare and state Medicaid programs, are the first revision issued by CMS in more than 20 years.

The revised Conditions of Participation for Home Health Agencies can be found here:

Attorney General Combats Improper Billing to MassHealth

As part of a broader effort in the state of Massachusetts to combat fraud in the home health industry, Attorney General Maura Healey announced a settlement with a national provider of home health services, Maxim Healthcare Services, in the amount of $14 million. After a voluntary provider overpayment disclosure by Maxim, MassHealth referred the matter to the Attorney General and an investigation was launched. The investigation revealed that Maxim billed MassHealth for services that were not reimbursable under applicable state regulations. During the relevant period, state regulations allowed payment by MassHealth for home health services only if a patient had “a medically predictable recurring need for nursing services or therapy services.” MassHealth and the Attorney General’s office have worked together to implement new regulations for reimbursement of home health services that became effective March 1, 2016. The Attorney General’s office has recently taken criminal action against three other home health agencies for improper billing to MassHealth.

Notable Insurance Decisions

Massachusetts Trial Court Holds Punitive Damages Are Insurable

A Massachusetts trial court ruled that where bodily injury is caused by reckless conduct, punitive damages are insurable and not void against public policy. In the case of Michelle Williamson v. Interstate Fire and Casualty Company, 34 Mass. L. Rprt. 20 (2017), the insurer argued that insuring punitive damages is barred by public policy. In a preliminary ruling, the trial court concluded that public policy codified in G.L. c. 175, § 47 does not bar insuring punitive damages arising from reckless misconduct. Even where an insurance policy explicitly excludes coverage for punitive damages generally, such a limitation would not bar liability for punitive damages that are effectively consequential damages flowing from the mishandling of settlement of the claim. While there is no immediate right to appeal this ruling, we will continue to track the case in the event of an appeal after final judgment.

Federal District Court Issues Defense Verdict for Bad Faith Claim

In Calandro v. Sedgwick Claims Management Services, Civil Action No. 15-10533 (D. Mass Nov. 21, 2017), the District Court recently issued a defense judgment following a bench trial on an insurance bad faith claim against a third-party administrator brought by a well-known Massachusetts plaintiff's attorney in April. The bad faith claim arose out of settlement negotiations, both pre and post judgment, involving a nursing home wrongful death case. In the underlying trial, the plaintiff obtained a verdict of $1,425,000 in compensatory damages and $12,514,605 in punitive damages based on a finding of gross negligence. During prejudgment settlement negotiations, Sedgwick never offered more than $250,000. The court found that Sedgwick made reasonable offers at key points leading up to trial, and that the element of causation on the plaintiff’s wrongful death claim was never reasonably clear, notwithstanding that the defendant conceded breach of the standard of care. Following the underlying trial, the plaintiff issued an MGL c. 93A demand for $40 million. Sedgwick responded by offering $1,990,187. The court found that this was reasonable considering the likelihood of an appeal and the basis for and amount of the punitive damages award.

To read more about this case, go to: Calandro_v._Sedgwick.pdf

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