State Regulation of Long-Term Care: A Decade of Experience with Intermediate Sanctions

As of 1980, nearly all states had revised their nursing home licensing statute to add intermediate sanctions. ABA Commission on Legal Problems of the Elderly Model Recommendations: Intermediate Sanctions for Enforcement of Quality Care in Nursing Homes (American Bar Assn. Washington, D.C.) (1981) at 3 [hereinafter referred to as Model Recommendations]. A thorough analysis of several inter mediate sanctions is presented in Butler P.A. , Nursing Home Quality of Care Enforcement, Part II—State Agency Enforcement Remedies, Clearinghouse Review 14(7): 665–701 (October 1980).

For a complete discussion of transfer trauma resulting from involuntary transfer of elderly patients, see Comment, Involuntary Relocation of Nursing Home Residents and Transfer Trauma, Saint Louis University Law Journal 24(4): 758 (March 1981).

Although many health planning agencies have concluded that there is no shortage of nursing home beds, a shortage still exists when supply is adjusted by level of care, source of pay and location. More importantly, state agencies enforcing nursing home standards believe there is a shortage in most states and adjust their enforcement techniques in light of the perceived shortage.

A substantial body of criticism directed at license revocation is concerned with delays in effectuating the revocation. Once a state administrative agency revokes the operating license of a facility, the facility has the opportunity to pursue administrative appeals and then seek judicial review. During this time, revocation is stayed and the facility continues to operate. A 1973 report by the California Deputy Attorney General indicates that license revocation in that state had been taking as long as five and seven years. Cohen, Long-Term Care: A Challenge to Concerted Legal Techniques, Ohio University Law Review 2; 642, 667 (1975). The Connecticut state agency has imposed the revocation sanction only once in the past four years. That process consumed two years. Institute of Medicine, Case Study of Connecticut (Draft) at p. 20.

The Institute of Medicine project staff conducted case studies of the implementation of intermediate sanctions in the states of California, Connecticut, Georgia, and Texas. It also conducted public hearings on nursing home regulation. The author personally interviewed state agency administrators from five additional states not covered by the case studies and reviewed previously published case studies and legislative reports of other states. Footnotes in this article refer to drafts of the Institute case studies; final versions were not available at the time of the research.

See Johnson S. Terry N.P. Wolff M. , Nursing Homes and the Law: State Regulation and Private Litigation (Harrison Co., Norcross, Ga.) (full discussion of litigation involving a wide range of challenges to state enforcement of nursing home standards).

Most disputes involving state nursing home statutes occur in state administrative proceedings or in the lower state courts that infrequently report written opinions. Because the state statutes are similar, however, case law developed in one state is relevant to most others. When considered together, the reported cases, though few in number, form a coherent body of law.

Although state nursing home licensing statutes have been challenged as exceeding the state's police power, these challenges consistently have failed. See, e.g., Hoffman v. Moore, 420 N.Y.S. 2d 771 (N.Y. App. Div. 1979); Eagleton v. Patrick, 370 S.W.2d 254 (Mo. 1963).

See, e.g., Volunteers of America Care Facilities v. Village of Brown Deer, 294 N.W. 2d 44 (Wis. App. 1980).

See, e.g., Levine v. Whalen, 349 N.E.2d. 820 (N.Y. 1976).

Melbourne Corp. v. Hearing Board for Nursing Homes, 302 N.E.2d 729 (Ill. App. 1973), aff'd, 322 N.E.2d 481 (Ill. 1974).

Levine v. Whalen, supra note 10, at 824–25.

See Melbourne Corp. v. Hearing Board for Nursing Homes, 302 N.E.2d 729 (Ill. App. 1973). In High Ridge Mgmt. Corp. v. State, 354 So.2d 377 (Fla. 1977), the Supreme Court of Florida found Florida's five-tier rating scheme an unconstitutional delegation of power because the statute provided objective criteria for only one of the five possible ratings. The result in the case had no impact on the rating system as the legislature had redrafted the system to make it more specific prior to the court's decision. This may explain, in part, the court's result.

See, e.g., Lackner v. St. Joseph Convalescent Hosp. Inc., 165 Cal. Rptr. 198, 203–04 (Cal. App. 1980).

Illinois Legislative Investigating Commission, Regulation and Funding of Illinois Nursing Homes (1984) at 15.

Id. at 17.

The American College of Health Care Administrators presented statistical evidence at the Institute of Medicine hearings that indicated significant differences in rates of citations among states. The California case study reported that both the California Association of Homes for the Aged (CAHA) and California Association of Health Facilities (CAHF) complained of unfair variation among surveyors and the Licensing and Certification Division (LCD) districts. The CAHA is an organization of nonprofit providers. The CAHF is an association of proprietary long-term care facilities. The California case study noted that these complaints are “commonly given by providers.” Institute of Medicine, Case Study of California (Draft) at 46.

See, e.g., Iowa Code Ann. §135C.36 (West 1985) which served as a model for Mo. Rev. Stat. §198.085.1 (1983). As of 1980, ten states’ statutes provided for the classification of violations. See Model Recommendations, supra note 1.

Ore. Rev. Stat. §441.715 (1983) provides: “After a public hearing the Assistant Director for Health by rule shall adopt a schedule establishing the civil penalty that may be imposed….” The Assistant Director is limited, however, to a maximum of §500 for each violation.

See, e.g., Cal. Health & Safety Code §142-4 (West 1979) (a Class A violation is one highly likely to threaten death or serious injury to residents; a Class B violation is one that nevertheless seriously affects the welfare of residents). See also Ill. Ann. Stat. ch. 111 ½, §§4151-129 to 4151–131 (providing for Class A and Class B violations similar to those in California, as well as Class C violations which are those indirectly threatening the welfare of residents).

The benefits of this form were favorably noted in Commission on California State Government Organization and Economy, The Bureaucracy of Care: Continuing Policy Issues for Nursing Home Services and Regulation (1983) at 125 [hereinafter referred to as Bureaucracy of Care].

Iowa and Florida , among other states, rely extensively on the informal conference for resolution of fines and actually do collect fines through them without recourse to the courts. California had developed a “traffic citation” method by which the facility can pay the minimum fine for the class of violation rather than contesting the violation and risking a higher fine. Cal. Health & Safety Code §1428(b)(1979). The constitutionality of this provision was aggressively litigated and has been upheld. Lackner v. Perkins, 154 Cal. Rptr. 138 (Cal. App. 1979). See also Lackner v. St. Joseph Convalescent Hosp., 165 Cal. Rptr. 198 (Cal. App. 1980): Myers v. Astoria Convalescent Hosp., 164 Cal. Rptr. 495 (Cal. App. 1980). In 1984, the California legislature repealed the “traffic citation” system. Cal. Health & Safety Code §1428 (Supp. 1985).

Johnson S. , Nursing Home Receiverships: Design and Implementation, Saint Louis University Law Journal 24(4): 681. 700 (March 1981) [hereinafter referred to as Nursing Home Receiverships].

For example, as of Spring 1984, the Illinois agency had not begun active use of the civil penalty system that had been authorized by statute in 1980. This hesitancy to use fines has been attributed to the lack of legal staff. Regulation and Funding of Illinois Nursing Homes, supra note 15 at 97–98.

The enforcement problems in California are detailed in Bureaucracy of Care, supra note 21, at 112–31.

See generally Christianson J.B. , Long-Term Care Standards: Enforcement and Compliance, Journal of Health Politics, Policy, and Law 4(3): 414 (Fall 1979).

Case Study of California, supra note 17, at 48–49.

Id. at 45.

“Although the statute stresses the need for speedy resolution in … court, speed is hardly the hallmark of these cases. In Los Angeles County … in the first three months of 1983 citations dating back to 1980 and earlier were at various stages of the court process….” Bureaucracy of Care, supra note 21, at 155.

Mo. Ann. Stat. §198.067(2) (Vernon Supp. 1984).

Bureaucracy of Care, supra note 21, at 138.

See Model Recommendations, supra note 1, at 12.

See, e.g., Ore. Rev. Stat. §441.710(2) (1983).

See previous discussion of procedural requirements. See Aurelia Osborn Fox Memorial Hosp. Soc'y v. Whalen, 391 N.Y.S.2d 20 (N.Y. App. Div. 1977).

Case Study of Connecticut, supra note 14, at 19.

As of 1981, when the receivership was a very new sanction, at least three dozen receiverships had taken place. Jost T. , Intermediate Sanctions, in Long-Term Care and the Law ( Johnson ed.) (National Law Publishing Co., Owings Mills, Md.) (1983) at 325.

Nursing Home Receiverships, supra note 23, at 693–705. The Cobble Hill Nursing Home in Brooklyn is also reported as upgraded during a receivership and then purchased by a community group. Doty P. Sullivan E.H. , Community Involvement in Combating Abuse, Neglect, and Mistreatment in Nursing Homes, Milbank Memorial Fund Quarterly/Health and Society 61(2): 222, 234 (Spring 1983). Most states, however, have not used the receivership for this purpose.

Id.

See, e.g., Mo. Ann. Stat. §198.099 (Vernon Supp. 1984); N.J. Stat. Ann. §26:2H-38 (West Supp. 1984–85).

N.J. Stat. Ann. §26:2H-39(b) (West Supp 1984–85).

See Johnson Terry & Wolff , supra note 6, §1–23 (1985).

See, e.g., N.Y. Pub. Health Law §2810 (2(a)) (Consol. 1984).

Prior to recent revisions, the California receivership statute required that a receiver be 3 licensed nursing home administrator. Cal. Health & Safety Code §1327 (West. Supp. 1984). The state was unable to get qualified private receivers for the receiverships it attempted. The CAHA (nonprofit facilities) has now supplied the state with a list of receivers. Further, the legislature has amended the statutes to allow as receiver any ‘responsible person or entity, as determined by the court.” Cal. Health & Safety Code §1327 (West Supp. 1985).

Long Term Care and the Law, ( Skiba J.W. , ed.) (Panel Publishers, Greenvale, N.Y.) (1979) at 209.

Fla. Stat. Ann. §§400.062(3), 400.063(1) (West Supp. 1985).

Nursing Home Receiverships, supra note 23, at 705–12.

Id. at 697.

Fla. Stat. Ann. §400.126(2) (West Supp. 1985).

See Cal. Health & Safety Code §1331 (a) (West Supp. 1985) (changing the receivership term to six months).

Even if the statute restricts the ability of the court to renew the term, the court has a residual power to appoint a common law equitable receiver and should be encouraged to do so. Of course, the statute itself may authorize an extension. See, e.g., Cal. Health & Safety Code §1331 (a) (1) (West Supp. 1985).

Equitable receivership derives from the common law power of courts of equity. Courts under this power appoint receivers to maintain and conserve property and assets. In preserving the property and assets the receiver owes a duty of ordinary care. Vander Vorste v. Northwestern Nat'l Bank, 138 N.W.2d 411 (S.D. 1965); see also Annot. 20 A.L.R. 3d 96” (1968). Eight states that provide for nursing home receivership by statute specifically provide that the receiver is personally liable for gross negligence only. Cal. Health & Safety Code §1328 (West 1985); Fla. Stat. Ann. §400.126(7) (West 1985); Ill. Ann. Stat. ch. 111 ½. §4153-513(b) (Smith-Hurd 1985); Me. Rev. Stat. Ann. tit. 22, §7936 (1984); Minn. Stat. Ann. §144A.15(4) (West 1985); N.Y. Pub. Health Law §2810(d) (McKinney 1977); Okla. Stat. Ann. tit. 63. §1-1935(A) (West 1984); Wis. Stat. Ann. §50.05 (12)(b) (West 1984–85).

See generally Johssos Terry & Wolff , supra note 6. chs. 3, 4, and 5.

The most comprehensive analysis of private litigation across a broad range of legal theories is presented in. Butler P.A. , Nursing Home Quality of Care Enforcement, Part I—Litigation by Private Parties. Clearinghouse Review 14(7): 622 (October 1980).

See, e.g., N.Y. Pub. Health Law §2801(d) (Consol. Supp. 1980); W. Va. Code §16-5c-15(c) (1977); N.J. Stat. Ann. §30:13-8 (West Supp. 1984–85).

See Vossmeyer S. Felix D. , The Missouri Omnibus Nursing Home Act of 1979: A Legislative History, Saint Louis University Law Journal 24(4): 617 (March 1981).

See, e.g., Okla. Stat. Ann, tit. 63, §11918F (West 1984).

For an overview of statutory private rights of actions in Missouri, see Hoffman A.B. Schreier K.E. , A Private Right of Action Under Missouri's Omnibus Nursing House Act, Saint Louis University Law Journal 24(4): 661, 665–67 (March 1981).

Mass. Gen. Laws. Ann. ch. 111, §70E (West 1983).

See Vossmeyer & Felix, supra note 55, at 644.

See generally Johnson Terry & Wolff , supra note 6, at ch. 6.

See generally Doty & Sullivan , supra note 37, at 246–49 (Spring, 1983) (suggesting arbitration by an agency board).

See, e.g., Mo. Ann. Stat. §198.099 (Vernon Supp. 1984); N.J. Stat. Ann. §26:2H-38 (Wrest Supp. 1984–85).

See Spring v. Geriatric Authority of Holyoke, Sup. 475 N.E.2d 727 (Mass 1985) (plaintiff has statutory cause of action for invasion of privacy). Complaint is reproduced and trial decision is discussed in Goldberg Harkins , Recent Developments in Long-Term Care Litigation, in Long Term Care and the Law, supra note 36.

See, e.g., Stiffelman v. Abrams, 655 S.W.2d 522 (Mo. 1983) In this case, the Supreme Court of Missouri held that Missouri's statutory private right of action survived the resident's death and could be pursued by the resident's surviving family. This ruling allowed recover.- for injuries to the resident himself, including pain and suffering, even though Missouri's statute on wrongful death prohibited recovery for these damages once the resident had died. Id. at 534.

See, e.g., Mich. Stat. Ann. §14.15(21799C) (Callaghan 1980).

Institute of Medicine, Case Study of Georgia (Draft) at 16.

See Bureaucracy of Care, supra note 21, at 121–24.

Doty & Sullivan , supra note 37, at 231.

Smith D.B. , Long-Term Care in Transition: The Regulation of Nursing Homes (AUPHA Press, Washington, D.C.) (1981) at 141 [hereinafter referred to as Care in Transition].

Case study of Georgia, supra note 66, at 16.

Case Study of California, supra note 17, at 12.

Institute of Medicine, Case Study of Texas (Draft) at 6; Case study of Georgia, supra note 66, at 7–8.

Care in Transition, supra note 68, at 143.

Mich. Stat. Ann. §14.15(217763–4) (Callaghan 1980).

Esther Houser, Oklahoma State Long-Term Care Ombudsman, has stated that she does not support access to patient records by volunteers. Dorothy Erickson, director of a volunteer ombudsman program in St. Louis, stated that “I feel if the ombudsman pulls a record without the residents’ permission, the ombudsman is ripping off the residents’ rights.” Wolff Houser Erickson , Long-Term Care Ombudsmen, in Long-Term Care and the Law, supra note 36, at 196–97.

See Citizens for Better Care v. Reizen, 215 N.W.2d 576 (Mich. App. 1974) (plaintiffs used the state's administrative procedures act to gain access to state records).

The Missouri statute requires a facility to post a copy of the most recent inspection report when the facility has received a notice of non-compliance. This notice does not issue, however, until the agency has informed the facility of the deficiencies, the facility has had an opportunity to submit a plan of correction, and the facility has failed either to submit an adequate plan or fulfill an approved plan. These steps delay access to the information significantly. Mo. Ann. Stat. §198.026 (Vernon 1985).

Care in Transition, supra note 69, at 133.

See generally Hawes , Quality Assurance in Long-Term Care: Major Problems and Issues (1983) at 1 (Briefing Paper for the Institute of Medicine).

See, e.g., Case study of Georgia, supra note 66, at 27. This issue also surfaced in the public hearings conducted by the Institute.

Rango N. , Nursing-Home Care in the United States. Prevailing Conditions and Policy Implications, New England Journal of Medicine 307(14): 883, 884–85 (September 30, 1982).

Id. at 887.

Jost , supra note 36, at 326.

Johnson Terry Wolff , supra note 6, §1-17 (1985).

Model Recommendations, supra note 1, at 24–25.

Care in Transition, supra note 68, at 134.

Fla. Stat. Ann. §400.23 et seq. (Supp 1985).

Although the state licensing power could support a statute authorizing suspension of all admissions, California, at present, lacks the ability to suspend admissions of private-pay residents. See Bureaucracy of Care, supra note 21, at 177.

Case study of Georgia, supra note 66, at 6.

Regulation and Funding of Illinois Nursing Homes, supra note 15, at 91.

Case Study of California, supra note 17, at 12.

Id. at 116–17.

Id. at 152.

Regulation and Funding of Illinois Nursing Homes, supra note 15, at 71–75.

Id. at 71.

See 42 U.S.C. §1396a(1) (1982).