Nursing homes say Ky. has highest malpractice insurance costs and needs lawsuit review panels to keep providers and facilities

The state’s nursing-home lobby is renewing its effort to get legislative insulation from lawsuits, a prospect that could improve if Republicans control the state House after Tuesday’s election.

In a story for Kentucky Health News, Mellis Patrick wrote that Kentucky needs medical liability reform to stay competitive with its surrounding states, all of which have enacted some form of it, representatives of the Kentucky Association of Health Care Facilities told a legislative committee.

“It makes us not a friendly state to operate long-term care services,” Betsy Johnson, president of the association, said at the Nov. 2 meeting of the Interim Joint Committee on Health and Welfare, held during the association’s annual meeting in Louisville. “Providers are leaving Kentucky and new companies will not even consider locating in our commonwealth because of the high cost of health-care liability.”

Kentucky has at least one nursing home in every county, with a total of 281 nursing homes and 88 personal care homes. Combined, these facilities care for over 36,000 people, provide over 30,000 jobs and provide $200 million in state and local taxes, the group said.

Citing a recent study, Johnson said Kentucky’s long-term care providers are paying $9,350 per bed in liability insurance, the highest of any state. The study found Kentucky paid over $400,000 per claim in 2015, “the highest claims severity of all the states profiled in the Aon study,” Johnson said. Aon Risk Solutions is a risk-management and insurance company.

Kentucky also had the highest loss rate of Medicaid dollars in the study, which means that “14.66 percent of Medicaid reimbursement dollars that facilities receive end up going back out to cover losses,” Johnson said. “That is money that is not being used to provide care to the residents that we are committed to serving.”

Aon said in a statement, “Kentucky’s high cost of liability may be related to its lack of restrictions on tort actions. The state constitution prohibits limits on non-economic damages and there are no statutes concerning qualifications of expert witnesses, certificates of merit, pre-trial alternative dispute resolution or limits on attorney’s fees.”

For several years, nursing homes have been trying to get the legislature to require that medical-malpractice lawsuits be reviewed by a three-person panel to determine if a case has merit before the suit could proceed. Panel findings would be admissible in court, but not legally binding. The legislation has passed the Republican-led Senate, but has not been heard in the Democrat-led House.

Sen. Ralph Alvarado, R-Winchester, a physician, said after the meeting that he will likely introduce the bill again, pointing out that 43 other states have some sort of tort reform.

“The motivation for me to run for office to begin with was tort reform,” he said. “It is kind of what has gotten me here. So this is the big white whale that I am chasing and if I harpoon it and I get voted out of office, I can leave with a smile on my face. So, I am really hoping to get this accomplished.”