Long-Term Care Facilities to Have Shorter Profit Margins in 2016
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Long-term care liability costs are projected to increase by five percent for the third straight year, according to a new report released by the American Health Care Association. Between Medicaid and Medicare reimbursement cuts – and what feels like ambush of attorneys on television describing all the horrific things that can occur in an understaffed nursing home – this statistic should shock no one.
Tort reform is by far and always will be the best solution to this issue. After enacting substantive reform in Texas, bed rates are down to just $410. Compare that to Kentucky at $9,820. I rest my case. But since we can’t count on tort reform in places like Kentucky or Illinois, we have to take matters into our own hands. How can a facility do so? Check out me four tips below:
- Push back on “cost of defense” settlements. These settlements have made frivolous nursing home lawsuits a very lucrative business model for many plaintiff attorneys. While early resolution to save on defense costs should always be considered, don’t fall into the trap of paying more on indemnity just to save a little on expense. Taking a stand might make them think twice about targeting your organization again.
- When claimed specials are minimal, explore the possible small claim or municipal division options to maximize your defense. In Cook County, IL for example, if damages claimed are less than $30,000, the case can be motioned down to the municipal division where the case is then decided by binding arbitration. This will save on defense costs and cap the damages.
- Organizations with a high volume of claims should have an internal litigation manager. Defense counsel can run up significant costs from having to track down records and staff that should be easily accessible. A dedicated litigation manager can help control the flow of information to ensure it is complete and efficient.
- Tap into free risk management resources. While you may have to pay for “boots on the ground” type risk management, chances are your insurance carrier or insurance broker will provide a variety of other risk management tools, most of which are free. There are blog posts (like this one!) webinars and seminars, videos and sample policies and procedures just to name a few.
- 2016 Industry Outlook Video: Senior Living
- Long-Term Care Facilities Electronic Monitoring Act Webinar Replay
- How Baby Boomers are Defining the Long-Term Care Space
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