Calif. patients score victory in nursing home transfer case

California must enforce a federal law that protects patients who are transferred from skilled-nursing facilities and unable to be readmitted, a federal appeals court ruled Thursday.

The plaintiffs—three Medi-Cal beneficiaries and the not-for-profit California Advocates for Nursing Home Reform—alleged that the state violated federal law by allowing nursing homes to transfer patients to hospitals and block their return, even after a hearing determined that the individuals must be readmitted. A 9th U.S. Circuit Court of Appeals judge forbade what she described as “meaningless show trials” since the state didn’t actively enforce SNFs to uphold previous hearing appeals on transfers and discharges that essentially act as a safety-net for patients.

“If you don’t enforce a hearing’s results, then why have a hearing?” said Matt Borden, plaintiffs’ counsel with Braun Hagey & Borden.

Nursing homes financially benefit by transferring low-reimbursed Medi-Cal patients and replacing them with Medicare beneficiaries or the commercially insured, he said. The Medi-Cal patients would then end up in the hospital for months at time, which jeopardized their health and cost the state tens of millions of dollars, Borden said.

“Patients can win the hearing and then the facility essentially says ‘we don’t care’ and the state didn’t enforce it,” said Borden, who described the case as one of the first of its kind. “This means California is going to have to do something to enforce the results of these decisions. This ruling doesn’t say how, but the fact they have to enforce it is a huge benefit to residents in California and hopefully other states are watching for rulings like this.”

Importantly, the court did not decide whether the state’s process was lawful or unlawful, said Mark Reagan, a managing shareholder at Hooper, Lundy & Bookman who represented the California Association of Health Facilities, which served as an amicus on the case. It does not foretell the ultimate result in the case, he said.

“We disagree with the narrative advanced by the plaintiffs as to a purported ‘dumping’ epidemic,” Reagan said in a statement. “Our experience has been that the vast majority of the transfers or discharges relate to residents who are well enough to return home, present needs that cannot be appropriately served in the SNF in which they reside or present behaviors that place other residents and staff at risk for their safety. We believe that the individual plaintiffs in this case fall within these categories.”

The appeals court overturned the lower court’s dismissal of the case, when it initially said that under the current statutes, Congress did not intend to create an enforceable right to a meaningful hearing.

Now, a successful appeal must have “some actual effect on the challenged action, here a transfer or discharge,” Judge Marsha Berzon wrote for the court. Residents have the right not only to appeal a discharge or transfer, but also to “an enforceable order overturning an invalid discharge or transfer,” she wrote.

Typically, state officials will fine a SNF several thousand dollars if the patient was found to be unnecessarily discharged to the hospital and the facility will agree to educate their staff. But the fine can be appealed and the process can drag out for months.

Meanwhile, the increase in the alleged “patient-dumping” trend over the past decade has cost the state more than $70 million, the plaintiffs wrote in their complaint.

Skilled-nursing facilities receive on average $190 per day for a Medi-Cal resident while the cost of a hospital bed is $1,800 a day, according to the complaint. One of the plaintiffs had spent 136 days in the hospital since he had won the right to be readmitted, which cost taxpayers nearly $220,000, the lawsuit alleged.