Trial Magazine

Assisted living facilities (ALFs) are often a transitional step for the elderly after they stop living independently at home but before they enter a skilled nursing facility. They typically offer private or semi-private rooms, supervision, and assistance with everyday activities such as bathing, toileting, medication distribution, and dressing.

In the majority of states, ALFs are not licensed to provide medical care and are not required to have a licensed nurse or other licensed medical professional available or on staff.¹ Residents who require round-the-clock care, including, for example, tube feeding or infection control, generally do not and should not live in ALFs.

Although the number of ALFs ­nationwide is booming,² oversight of these facilities is very limited,³ and the regulations governing them vary by state.⁴ This lack of uniformity is also evident in how ALFs are funded: 43 states and the District of Columbia allow Medicaid funds to be used to pay for assisted living care, but the specific services that are funded vary across states. For example, some states may not provide coverage for medication administration and housekeeping services, while others do.⁵ Facilities in the remaining states are entirely private pay, which often leads to facility management making decisions about resident acceptance and retention with an eye toward increasing income over improving resident care.

In contrast to many smaller, independently run ALFs that charge a flat rate for services, many corporate ALFs housing more than 50 residents use a system that assigns points to each resident to quantify the amount and type of care the resident requires based on individual assessments. Facilities can use these individual assessments to estimate how much daily staff time must be devoted to each resident and the aggregate amount of time needed for all residents on any given day. For attorneys handling consumer fraud, elder abuse, personal injury, or wrongful death claims against ALFs, point system data can be strong evidence that facility management knew their staffing was inadequate to meet the residents’ needs.

Point Systems 

Upon admission to the ALF and periodically throughout the resident’s stay, at intervals sometimes specified by law,⁶ facility staff assess each resident’s individual needs, which are then translated into points through a software program. For example, one point may equal one minute of care provided. A resident may be assigned points for needing help with grooming, fall prevention, or other daily activities. The facility may then bill the resident a certain amount for each point ($15 per point per day, for example) or a certain amount based on the range of aggregated points ($60 per day for the range of five to 10 points), in addition to the monthly fees for room and board.

Facilities that use these point systems inform residents and their families in marketing materials and admission agreements that residents will receive the services they require from facility staff and that the number of care points reflects the amount of time it takes staff to perform each service. However, in reality, most ALFs do not use resident assessments and the related care points to set staffing levels—the care points are used solely for billing.

ALF staffing costs usually are the largest budget line item and are tightly controlled to ensure profitability. Corporate headquarters typically set the budgets for each facility and instruct administrators to stay within those budgets. ALFs staffed based on predetermined budgets with no connection to the results of the resident assessments generally do not have enough staff to meet residents’ needs. When facilities are understaffed, residents often testify that they do not receive the services they paid for, which puts them at risk of harm.

For example, in January 2017, the California Department of Social Services cited an ALF after 20 residents did not receive their medications because there was not enough staff to administer them.⁷ In June 2016, the same agency cited another facility for understaffing that led to dementia care residents wandering unattended throughout the facility during the night, including into other residents’ rooms and beds.⁸ In worst case scenarios, residents in understaffed facilities suffer from falls, elopement, decubitus ulcers, medication errors, other injuries, or even death.

Consumer Fraud 

When a resident or family member comes to you after an incident, what are your options? Based on consumer fraud theories, you might have a potential class action against understaffed ALFs that rely on these point systems.⁹ Consumer fraud cases are based on the consumer’s reasonable expectations, supported by standardized written representations, and corroborated by witnesses such as corporate employees, regional officers, marketing and sales staff, facility executives and clinical directors, and residents and their families. The primary allegation is that if residents had known that the care points were only a billing tool and that the results from their assessments would have no connection to staffing levels, they would not have chosen the facility.

During your case evaluation, scrutinize the ALF’s marketing materials, admission agreements, and assessment information from the residents’ files. These materials will give you a sense of what specific software is used to calculate points and how. Your client may have a right to copies of his or her resident file, which should include the admission agreement and assessment information.¹⁰ You often can obtain these documents through a direct request to the facility early in your investigation, and they are also generally available on the ALF’s website—and sometimes even in the lobby of the facility. Later, you typically can obtain marketing materials and residents’ files fairly easily via requests for production of documents.

Publicly available documents on file with the regulatory agency that oversees ALFs in each state (for example, the California Department of Social Services or the New York Department of Health)—including the facility plan of operation, policies and procedures, and proposed budgets—can also provide insight into the facility’s actual operations, as opposed to what information the marketing materials included. The facility’s policies and procedures may indicate that staffing is determined by the total number of residents as opposed to the residents’ individualized needs identified in the assessments. The proposed budgets may show that staffing is fixed one year in advance without any flexibility built in for rising acuity during the year. Compare the information in these documents with your potential class representatives’ and witnesses’ accounts of the actual staffing and of how corporate decision-making affected the facility. If you can prove that these written representations did not accurately reflect how the facility determined staffing levels, damages and injunctive relief may be recoverable on a classwide basis.

In Winans v. Emeritus Corp., for example, the plaintiff class alleged that the defendant ALF chain misrepresented to consumers that it used the results from its points system software program to determine facility staffing when staffing was actually determined based on “labor budgets and profit objectives.”¹¹ The court approved a class action settlement that included injunctive relief requiring the defendant to phase out the assessment system and to stop making affirmative representations to prospective residents that the software system is used to determine facility staffing.¹²

Elder Abuse and Neglect 

You can also use the facility’s point system as evidence in an individual action for injury or wrongful death based on elder abuse or neglect. Whether the injury at issue resulted from a bedsore, a fall, or a sexual assault, showing that the facility was understaffed—and that the ALF’s point system had no relation to the number of staff it employed—can often be the basis for proving the ALF’s managing agents (for example, the resident services director, administrator, or regional manager) were reckless and acted with a conscious disregard for the rights and safety of the ALF’s residents. Typical evidence of reckless conduct is showing that the facility’s management had access to data outlining the aggregate needs for residents during your client’s admission but chose not to use that data to make staffing decisions.

Depending on the jurisdiction, you may be able to assert a statutory violation. Under California law, for example, ALF residents have a right to live in a facility that has sufficient staff to meet all the residents’ needs.¹³ Through documentation and deposition testimony, you then have to show that at the time your client’s injury occurred, there was not sufficient staff to meet your client’s needs or those of the other ALF residents; thus, this regulation was violated. By contrast, in Florida and several other states, specific staffing ratios must be maintained based on the number of residents, the time of day, or the type of resident needs (for example, a patient with dementia).¹⁴

Building Your Case

Whether assisted living care is paid for privately or through Medicaid reimbursements, an inherent conflict exists for the ALF’s management, who must weigh the cost of additional resident care against the bottom line. If they assess your client as having higher needs, they can charge more and increase their cash flow. But they then must provide additional staff to meet those needs. If the facility failed to do this, you will need the documents and the deposition testimony to prove it.

Get the right documents. Obtaining the point system data through discovery is one way to show that the ALF did not meet staffing obligations it knew were necessary. In addition to the documents previously mentioned, you should also request the administrative policies regarding the budget and any paperwork requesting variances from the budget and staffing, as well as job descriptions, plans of operations, marketing scripts, and other documents that may provide insight into the specific system used to analyze resident care needs or determine staffing at the defendant facility. 

You will need to conduct targeted discovery through depositions, interrogatories, or other means to obtain the specific names of documents and the points system ­software used. Be prepared to file motions to compel when faced with objections about the relevance of such requests, especially in an individual injury case. You can lay a foundation for your broader staffing argument by making specific allegations of understaffing in your complaint and referring to them when arguing your discovery motions. 

Depositions. Facility staff and ­caregiver testimony is crucial to illustrate the connection between the point system and understaffing. Question caregivers about the level of staffing at the facility. Did it remain static? If yes, this is evidence that staffing levels are not adjusted to reflect the constantly fluctuating needs of the resident population. Did the facility provide staff with information regarding the points assigned to each resident? If the answer is no, it indicates that this information is being used for billing purposes only and not to create an individualized plan to meet the needs of your client who could have been charged for assistance with bathing or ambulation without receiving the additional care. 

Facility administrators should be able to testify about what data was available regarding the point system program used to assess the needs of your client and the residents in the facility on the date(s) in question. They can also testify about the objective data they used in determining staffing levels in the building during the relevant time period—this may be a resident’s stay, the date of an injury, or the date of your class period, depending on your particular case. 

You can ask staffing coordinators, marketing directors, and other corporate agents about what data was used to determine staffing levels, what was conveyed to the residents and their families, what training they received from their supervisors on setting staffing levels and completing resident assessments, and what they were directed to tell ALF residents and their families regarding these matters. 

Your client’s deposition testimony is just as important. For example, it can support a claim that when your client’s assessments indicated increased need, the ALF did not provide corresponding increases in the level of care. It can also help demonstrate that points were increased at times when the resident’s condition was static—a clear sign the facility was using the system as a tool for billing, not staffing. 

ALFs should be honest and transparent in their use of the objective assessment data they collect. If they do not use the data to adequately staff their facilities, you can bring this misuse to light and hold them accountable. 

Kathryn Stebner is the founder of Stebner & Associates in San Francisco. Karman Guadagni is a managing associate and Kelly Knapp is an associate at the firm. They can be reached at kathryn@stebnerassociates.com, karman@stebnerassociates.com, and kelly@stebnerassociates.com.

Notes

1. Twenty-four states require ALFs to have a licensed nurse or other licensed health care professional available; 14 states require them to have one on staff. Paula Carder, Janet O’Keefe & Christine O’Keefe, Compendium of Residential Care and Assisted Living Regulations and Policy, U.S. Dep’t of Health & Human Servs. (June 15, 2015), https://aspe.hhs.gov/basic-report/compendium-residential-care-and-assisted-living-regulations-and-policy-2015-edition#overview. Skilled nursing facilities, however, must have a licensed nurse on site at all times unless the facility applies for and is granted a waiver from the state. 42 C.F.R. §483.35 (2016).
2. “Between 2001 and 2013, the number of senior living establishments in the United States increased 36 percent.” Argentum, Getting to 2025: A Senior Living Roadmap, 14 (April 2016), https://www.argentum.org/images/Argentum2025.pdf. 
3. In California, for example, beginning in January 2018, the Department of Social Services will only be required to conduct unannounced inspections of ALFs once every two years. Cal. Health & Safety Code §1569.33(d)(3) (West 2017). The agency can only impose a maximum daily penalty of $150 for deficiencies that resulted in sickness, injury, or death. Cal. Code Regs. tit. 22, §87761(c) (West 2017). In contrast, a maximum daily penalty of $10,000 can be issued by the state Department of Public Health for nursing home deficiencies. Cal. State Operations Manual, Chapter 7, §7510, CMS.gov (September 2016), https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107c07.pdf; see also Justice in Aging, Making Up For Lost Time: Addressing Problems in California’s Assisted Living System (November 2014), http://www.justiceinaging.org/wp-content/uploads/2015/03/RE_Addressing-Problems-in-Californias-Assisted-Living-System.pdf.
4. For example, in California, assisted living facilities are governed by Cal. Code Regs. tit. 22, §§87100–87785 (West 2017); see also 651 Mass. Code Regs. §§12.00–12.14 (West 2017); 40 Tex. Admin. Code §§92.1–92.801 (West 2017); Ohio Admin. Code §§3701-17-50–3701-17-68 (West 2017); N.M. Code R. §§7.1.2–7.1.28 (West 2017).
5. See Am. Elder Care Research Org., Medicaid’s Assisted Living Benefits: Availability and Eligibility (May 2017), https://www.payingforseniorcare.com/medicaid-waivers/assisted-living.html. 
6. See, e.g., Cal. Code Regs. tit. 22 §87463 (“The pre-admission appraisal shall be updated, in writing as frequently as necessary to note significant changes and to keep the appraisal accurate.”); 6 Colo. Code Regs. §1011-1:VII-1.107(3)(c) (West 2017) (“The resident shall be reassessed yearly or more frequently, if necessary, to address significant changes in the resident’s physical, behavioral, cognitive and functional condition and identify the services that the facility shall provide to address the resident’s changing needs.”); Haw. Code R. §11-90-8 (West 2017) (facility staff must assess a resident to create a service plan prior to when the resident moves in and then review and update the plan at least annually); 651 Mass. Code Regs. §12.04(8)(c) (residents’ service plans should be reviewed and updated at least every six months); Ohio Admin. Code §3701-17-58(D) (residents must be assessed at least annually); N.M. Code R. §7.8.2.25(E) (residents’ evaluations should be reviewed and revised as needed at least every six months). 
7. Cal. Dep’t Soc. Servs., Brookdale Palm Springs Facility Evaluation Report (Jan. 11, 2017), https://secure.dss.ca.gov/ccld/TransparencyAPI/api/FacilityReports?facNum=336426478&inx=5. 
8. Cal. Dep’t Soc. Servs., Oakmont of Carmichael Complaint Investigation Report (June 23, 2016), https://secure.dss.ca.gov/ccld/TransparencyAPI/api/FacilityReports?facNum=347005426&inx=6. 
9. In addition to consumer fraud, elder financial abuse can be claimed in some states. See, e.g., Cal. Welf. & Inst. Code §15610.30 (West 2017).
10. See, e.g., Cal. Health & Safety Code §1569.269(a)(21) (West 2017); 40 Tex. Admin. Code §92.41(h)(3) (West 2017).
11. 2016 WL 107574, at *1 (N.D. Cal. Jan. 11, 2016).
12. Id. at *2, *7.
13. See Cal. Code Regs. tit. 22, §87411(a). 
14. See, e.g., Fla. Admin. Code R. 58A-5.019(1)(3) (West 2017); 651 Mass. Code Regs. §12.06(5)(b); N.M. Code R. §7.8.2.19.