Could reimbursement cuts be the impetus for lawsuit reform?

Long-term care providers are justly lamenting the harsh 11.1 percent Medicare reimbursement cuts that took effect on October 1. But in the ever-moving Yin and Yang of Congress, could those cuts help provide the political push needed for federal caps on runaway jury awards?

Since the cuts were announced, LTC companies and advocates have predicted layoffs in excess of 20,000 employees, as approximately $79 billion will be sheared from skilled nursing facility payments over the next 10 years. With further Medicare and Medicaid cuts threatened, where will providers find the relief needed in order to retain employees and continue providing quality care?

Federal lawsuit reform—a perennial leader on the industry’s wish list of reforms—has been gaining momentum as Congress labors to reduce healthcare costs nationally. Pending in the House is H.R.5, known as the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 (known hereafter as “the Bill”). The Bill, which has garnered the support of 134 Republican cosponsors, would limit non-economic (e.g., pain and suffering) damages in medical malpractice cases to $250,000.

In addition, the Bill would impose time limits on when claims could be brought and would allow limits on the amount of attorney’s fees that could be charged to the patient. The sponsors of the Bill seek to foster “improved medical care by reducing the excessive burden the liability system places on the healthcare delivery system.”

With the reimbursement cuts, LTC providers need some avenue of relief. And more than any other healthcare group, nursing homes have been targeted by the plaintiffs’ bar for costly and repetitive litigation. To find the savings needed to retain employees and continue providing quality care, lawsuit reform may be crucial to the viability of the nursing home industry, especially as the first wave of Baby Boomers begins to access these critical services.

Although there was potential for the Joint Select Committee on Deficit Reduction, the so-called “super committee,” to include lawsuit reform among its cost cutting measures, its recent failure means the Bill will have to proceed to the floor independently. Unfortunately, the super committee clean-up process may consume the remainder of the Congressional term, but the industry should continue working to ensure that lawsuit reform remains part of the discussion for reforming healthcare and reducing the budget.

Jason E. Bring, Esq., is a member of the Healthcare Group of Arnall Golden Gregory LLP. Bring defends nursing facilities in medical liability and False Claims Act cases, as well as assists them in regulatory and reimbursement issues.

Topics: Medicare/Medicaid , Risk Management