In 1987, Congress passed a series of amendments known as the Nursing Home Reform Law into the Social Security Act. The Social Security Act is responsible for both Medicaid and Medicare. As a result, nursing homes in the United States are regulated by both federal and state laws. As a nursing home lawyer from a firm like Brown Kiely, LLP can explain, the Nursing Home Reform Law requires “nursing homes and skilled nursing homes to provide certain services to their residents and to meet certain standards, in order to receive Medicaid or Medicare payments”.
In 1986, the Institute of Medicine conducted a report at the request of Congress on the living conditions of nursing homes across the United States. The Institute concluded that “many nursing homes were of low quality, that stronger federal regulation was necessary because many states failed to adequately regulate nursing homes, and that many residents were dissatisfied with the care they received. The Nursing Home Reform Law was created in response to the conclusory data acquired. Unfortunately, nursing homes across the country still faces lawsuits due to issues of negligence and sometimes even personal injury.
One organization, Preferred Care Group, recently had thirty three of its nursing homes file for a Chapter 11 bankruptcy claim due to multiple personal injury lawsuits filed in Kentucky and New Mexico, adding up to millions in damages in total. The nursing home service company claims that their files for bankruptcy is attribute to the 163 personal injury cases the company has spent money to defend against. One of the lawsuits includes “a $28 million judgment in favor of the family of a man who was injured in one of [Preferred Care Group’s] nursing facilities in Kentucky.” The filing and final judgment order was held by the U.S. Bankruptcy Court in the Northern District of Texas.
The operators of each of Preferred Care Group’s nursing homes reasoned that the bankruptcy filings were legitimate approaches that would allow the care giving centers to continue their businesses, continue to pay their employees, continue to pay their vendors, and also care for the 2,900 residents living in the nursing home; all while allowing the homes to seek restructuring.
Following the Nursing Home Reform Law accordingly requires many elements to be checked off. Nursing homes must:
- Have sufficient staff
- Assess each resident’s particular needs
- Develop comprehensive care plans for each resident, including proper hygiene, nutrition and diet, and medication
- Ensure that residents are adequately supervised
- Promote their residents’ quality of life
- Maintain their residents’ dignity and respect
- Keep accurate and complete medical records for each resident
- Submit to unannounced inspections and allow resident interviews
As a result, it is no wonder why these nursing homes need to file for bankruptcy so that they can continue running these services for their elderly patients. However, this also demonstrates the need for nursing homes to provide better care for their patients so as to avoid future injuries.