Report shows liability costs on the rise for Kentucky’s long term care facilities

A new report by the American Health Care Association (AHCA) and conducted by Aon Global Risk Consulting Liability shows that costs for long term care providers across the country are expected to increase by 5 percent and claims frequency also is expected to rise. The report also indicated that plaintiff firms have focused attention on states like Kentucky with more vulnerable legal climates. 

The report showed that Kentucky’s loss rate, the highest of the profiled states in the study, has been increasing since 2008 and is projected to reach $8,090 in 2014.  It also showed that Kentucky long term care facilities face more lawsuits than 48 other states, pay twice the national average in claim amounts, and have the nation’s highest Medicaid per diem loss rate.  All despite the fact that Kentucky facilities meet or exceed all federal Centers for Medicare & Medicaid Services (CMS) guidelines in terms of regulatory compliance standards and staffing.

The primary reason for these disparate numbers, as stated in the report, is that Kentucky’s state constitution prohibits limits on tort recoveries and there are no statutes concerning qualification of expert witnesses, certificates of merit, pre-trial alternative dispute resolution, or limits on attorney’s fees.

In contrast, the report notes that Texas has the second lowest loss rate in the study, $300 per occupied bed. The state experienced dramatic loss rate reductions following constitutionally protected tort reform in 2003. These reductions in loss rates have been sustained in the years following the legislation.

Christian Coleianne, associate director and actuary from Aon Global Risk Consulting, said that, “conservative jurisdictions with long standing tort limits are less economically attractive to attorneys. The firms have focused their attention on venues with no tort limits, less mature tort laws or more liberal judiciaries. We are seeing this in Kentucky, Tennessee and West Virginia, where claim frequency rates are growing”.

For years, personal injury lawyers have been misleading Kentuckians and filing predatory lawsuits in hopes they can collect massive contingency fees.  This has led to a dramatic increase in liability insurance costs attributed to the fact that whether dismissed, settled, won, or lost, lawsuits cost health care providers thousands of dollars to defend.  This wastes precious resources that could otherwise be spent providing care for patients. 

The Kentucky Chamber supports legislation to create a medical review panel process for cases brought against health care providers, including long term care facilities. This will help address the overly litigious environment facing Kentucky’s health care providers, which ultimately increases health care costs for everyone.

This solution has proven effective in others states, including Indiana, as a way to expose merit-less lawsuits against health care providers to ensure critical resources are spent caring for patients, instead of lining the pockets of predatory personal injury lawyers.

To access the report, visit www.ahca.org.