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Inadequate nurse staffing is the most significant predictor of poor care in nursing facilities.  Despite the fact that understaffing is a pervasive and nationwide problem,[1] understaffing is rarely cited by state survey agencies.[2]  One reason for the lack of deficiencies and enforcement actions is that the federal standard for nurse staffing is vague.  Aside from requiring a registered nurse eight hours per day and licensed nurses 24 hours per day,[3] federal law and regulations require only that facilities have “sufficient staff” to meet residents’ needs.[4]

In a lawsuit filed December 5, 2014, State of New Mexico ex rel. King v. Preferred Care Inc. et al., the New Mexico Attorney General charges the twelfth largest nursing home company in the United States, Preferred Care, Inc., with providing inadequate care to its residents by understaffing its New Mexico nursing facilities.[5]  What is unique about the case is that, in addition to witnesses from the company’s New Mexico nursing facilities, the Attorney General uses industrial simulation to identify how long it takes to complete various basic tasks and then, relying on the facilities’ own resident assessment and staffing data, to demonstrate that the facilities did not have sufficient staff to perform the basic tasks.  The New Mexico litigation, if successful, could be a model for litigation in other states nationwide because it combines information from industrial simulation with facilities’ self-reported staffing and resident assessment data. 

The Lawsuit

In an introductory section, the 116-page Complaint describes defendants’ “scheme to generate outsized revenues at the expense of the physical well-being of vulnerable nursing home residents through false representations to the State’s Medicaid program and consumers about the level and quality of services they provided from July 1, 2007 to the present.”  Complaint ¶5.  Cathedral Rock Corporation sold its New Mexico nursing facilities to Preferred Care, Inc. in or around November 2012, following its criminal felony plea bargains and civil settlement of False Claims Act litigation involving its Missouri nursing facilities.  Id. ¶1.  The New Mexico facilities have generated more than $229 million in revenues since 2008.  Most of the more than one million resident days are paid by Medicare and Medicaid, although some residents pay privately out-of-pocket.  ¶¶3-4.

Although residents have needs for Basic Care (¶¶6-7), “Defendants limited the number of [certified nurse assistant] CNA staff on duty . . . and rendered the facilities incapable of delivering the Basic Care that residents needed.”  ¶9.  The Complaint alleges, “The profound difference between the amount of services that Defendants promised and claimed to provide and the amount of services that the Defendant Nursing Facilities could have provided is at the heart of this case.”  ¶10.  It continues:

During the Relevant Period the Facilities completed, certified, and submitted to the state and federal governments individualized date-specific assessments – known as a Minimum Data Set or “MDS” – of the Basic Care required by and provided to every resident.  Using these MDS resident assessments and a widely-accepted industrial engineering simulation, the Office of the Attorney General (“OAG”) was able to determine the minimum CNA time required to care for these residents.  Using the Defendant Nursing Facilities’ self-reported staffing data, the OAG then calculated the total CNA hours available in the Defendant Nursing Facilities to provide this care.

¶10.  In addition,

Interviews with residents’ families and former employees, review of complaints received by the OAG, and analysis of survey results reported by the New Mexico Department of Health (“DOH”) all confirm the chronic understaffing of the Defendant Nursing Facilities and their failure to provide the Basic Care services that they were paid to provide.

¶11.  The Complaint identifies “the very human toll of understaffing . . . [which] cost residents their dignity and comfort, and jeopardized their safety” and “degraded residents and increased their risk of serious negative health consequences.”  ¶13.  The services “were not provided or were “fundamentally worthless.”  Id.

The Complaint then identifies the parties, including each of the facilities and its management company.  ¶¶16-46.

Omissions of care: The OAG calculated, for each facility, “the gap between the basic care needed and required and the basic care delivered.”  ¶51.A.  First, the OAG acquired from the Centers for Medicare & Medicaid Services the “[activities of daily living] ADL data for every resident in the Defendant Nursing Facilities on the last day of each quarter for the period of 2008-2013.”  ¶55.  It coded the care needs of residents into “one of seven recognized workload categories.”  Id.  Then, “utilizing these scientifically-established labor times and the minimum frequency each Basic Care service is required daily,” it developed “a workload score for each nursing home” on a quarterly basis.”  ¶59.  However, because “industrial engineering has long recognized that this formula significantly underestimates the total labor time actually required,” the OAG used a “more sophisticated industrial engineering tool – computer simulation – . . . to precisely calculate the total amount of labor required to provide the Basic Care claimed in residents’ MDSs.”  ¶59.  Combining “the workload category and 2-person assist data” derived from the facilities’ MDS data, the OAG developed “an objective basis for calculating the work demands placed on the Defendant Nursing Facilities’ CNAs.”  ¶62.

Labor time available for Basic Care: To quantify the amount of time available for Basic Care, the OAG used the staffing data reported by defendant facilities (for the two-week period preceding the annual survey) “to calculate the CNA labor supply, or number of CNA hours, available to each resident on a daily basis.”  ¶64.

Quantifying omissions of care: Using these two data sets, the OAG quantified omissions of care and identified “a significant disparity between the CNA staffing hours required to provide the Basic Care services claimed by Defendants in the MDSs of residents and the actual staffing hours available.”  ¶66.  The state alleges, “The needs of residents for Basic Care routinely overwhelmed the limited staff at their facilities, making it physically and mathematically impossible for the Defendant Nursing Facilities to provide the Basic Care that was promised, required, and paid for by the State and consumers.”  ¶67.

Basic Care omissions were confirmed by “eyewitness accounts” of residents and former employees of

residents being left in their own waste for long periods, residents not receiving adequate baths or assistance with personal hygiene, residents waiting 20-30 minutes for responses to call-lights when they sought assistance, residents falling when they attempted to go to the bathroom on their own because no help was available, and residents not being able to get sufficient foods or liquids because no one was available to help them.  ¶68.

Basic Care Omissions were also confirmed by state survey reports, although the Complaint notes that these reports likely underestimate such omissions.  ¶69 and footnote 9.

The OAG next alleges, “Defendants improperly billed for care that was not provided,” citing complaints by residents, families, and their own employees to demonstrate that “Defendants knew that their staffing practices compromised the delivery of Basic Care services.”  ¶70.  MDS forms included false certifications.  Id.  The New Mexico Medicaid program paid for care that was not provided, was not compliant with requirements, did not meet professional standards of quality, and “was so deficient as to be worthless.”  ¶71.

Relying on “its review of staffing and workload data, interviews with former employees, residents, and resident families, complaints received by the OAG, and deficiencies found by DOH,” ¶73, the OAG then provides a series of charts and detailed witness information demonstrating the omissions of Basic Care at seven facilities.  ¶¶74-140.

Among other claims, the OAG alleges that defendant facilities submitted false claims for Medicaid payments, ¶¶141-166, and made deceptive statements to private payors and engaged in unconscionable conduct, ¶¶167-175.

The OAG also alleges that defendants knowingly failed to provide adequate CNA staffing, relying on the Institute of Medicine’s 2004 guidelines for nursing home staffing; defendants’ knowledge of their residents’ Basic Care needs; complaints from residents, families, and staff; deficiencies; and lawsuits.  ¶¶176-185.

The Complaint includes five claims for relief.

Conclusion

The New Mexico Attorney General is approaching the chronic and longstanding problem of inadequate nurse staffing in nursing facilities through a new and novel approach.  The Center for Medicare Advocacy will continue to follow this litigation.

T. Edelman, January 2015


[1] CMS, Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes (2001), finding that 97% of nursing facilities failed to meet one or more staffing requirements and, in a simulation study, that 91% lacked sufficient staff to meet five key processes required by the 1987 federal Nursing Home Reform Law.
[2] CMA, “Staffing Deficiencies in Nursing Facilities: Rarely Cited, Seldom Sanctioned” (Weekly Alert, March 7, 2014), https://www.medicareadvocacy.org/staffing-deficiencies-in-nursing-facilities-rarely-cited-seldom-sanctioned/.
[3] 42 U.S.C. §§1395i-3(b)(4)(C)(i), 1396r(b)(4)(C)(i)(II); 42 C.F.R. §483.30(b)(1) (RNs);  §§1395i-3(b)(4)(C)(i), 1396r(b)(4)(C)(i)(I); 42 C.F.R. §483.30(a)(1) (licensed nurses).
[4] 42 U.S.C. §§1395i-3(b)(4)(C)(i), 1396r(b)(4)(C)(i)(I); 42 C.F.R. §483.30(a)(1).  The law and regulations authorize waivers of nurse staffing requirements – waivers of 24-hour nurse staffing, 42 C.F.R. §483.30(c), and waivers of RN coverage, §483.30(d).
[5] State of New Mexico ex rel. King v. Preferred Care Inc. et al., Case Number D-101-CV-2014-02535 (First Judicial District Court, Santa Fe County, New Mexico, Dec. 5, 2014).  The Complaint is available from the Center for Medicare Advocacy, on request.  Jeff Horwitz and Susan Montoya (Associated Press), “New Mexico sues nursing home chain on care, staff,” Las Cruces Sun-News (Dec. 5, 2014), http://www.lcsun-news.com/las_cruces-news/ci_27076287/new-mexico-sues-nursing-home-chain-care-staff

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