OAKLAND, Calif. (CN) — A federal judge nixed a lawsuit claiming California’s public health bureaucracy failed to enforce its own readmission decisions against nursing homes that use hospital stays as a pretext to dump unprofitable Medi-Cal patients.
Federal Nursing Home Reform Act (FNHRA) of 1987 demands that states establish a hearing process to re-admit nursing home residents who are temporarily hospitalized, but the 2015 lawsuit claimed California’s public health agencies do not enforce the outcome of those hearings.
Bruce Anderson languished in the hospital for a year before he was able to find a new nursing home after Norwood Pines Alzheimer Center refused to readmit him. Anderson appealed his involuntary hospital transfer under the Nursing Home Reform Act and won, but the state failed to enforce the readmission order.
Essentially, the California Department of Health Care Services says that once it issues an order for nursing home readmission, it no longer has jurisdiction and “has no authority to enforce its own orders.”`
"Bruce had a terrible experience in the hospital. He didn’t go outside, he laid in bed all day, he was drugged,” said Anthony Chicotel, an attorney with California Advocates for Nursing Home Reform said on Thursday. Chicotel said Anderson is “much better off now,” but there are still many elderly Californians suffering in the same situation.
“We still get calls weekly about resident dumping cases. I’ve had two in the last week. The week before that we had one of these fair hearings where a resident had been in dumped in the hospital and refused readmission,” Chicotel said.
Anderson, CANHR and two other nursing home dumping victims are now fighting an uphill battle to force public health agencies to impose stiffer penalties on nursing homes who try to offload Medi-Cal patients in favor of those with private insurance.
U.S. District Judge Haywood Gilliam dismissed the case in 2016, finding FNHRA did not give individuals the right to sue states for not enforcing the law. It was later revived on appeal by the Ninth Circuit, and defeated another attempt at dismissal in 2020.
Meanwhile, Governor Gavin Newsom signed two laws in 2021 designed to pressure nursing homes into following the law.
The first, Assembly Bill 133, expands DHCS’s authority to enforce its own readmission orders and assess penalties of $750 for each day nursing homes fail to comply. Assembly Bill 849 allows a former resident’s legal representative, personal representative or legal heir to bring a civil suit against a facility that violates that resident’s civil rights, and it increases the amount of damages they can seek.
Gilliam found the laws to be sufficient remedies to protect elderly patients fighting their evictions.
“The bottom line is that California now provides for direct agency enforcement of a DHCS readmission order, and there is insufficient evidence in the record to create a genuine dispute about this enforcement mechanism’s effectiveness,” he wrote.
But Chicotel said they don’t go far enough, and the system still incentivizes nursing homes to break the law and ignore hearing decisions without consequences.
“The law is better in a couple of ways and I had a role in a lot of that legislative work. But ultimately we’re still in a situation where the state has discretion to not issue a fine in a case where a facility is flouting a hearing decision,” Chicotel said.
Attorney Matthew Borden of Braun Hagey & Borden, who represents the three patients and CANHR, said the new law has no teeth.
“Even if the $750/day fine were mandatory, it is less than facilities' profit from dumping, plus it is capped at $50,000. Our client Bruce Anderson lived in a hospital for over a year. If DHCS chose to impose a penalty under the new regulation, the facility would have made hundreds of thousands of dollars by ignoring the results of the DHCS hearing, and California taxpayers would be out however much it costs to house a perfectly healthy person in a hospital bed for a year,” Borden wrote in an email to Courthouse News.
He also noted that the law leaves enforcement up to DHCS discretion. “What it says is that DHCS may impose penalties,” he wrote.
“You have to have a system that makes it quite expensive to do an illegal discharge,” Chicotel said. “There’s got to be real disincentives and not squishy discretionary language that makes the consequences uncertain.”
Chicotel said few elderly residents know about their FNHRA appeal rights, let alone the new laws. Many lack the resources to find and hire a lawyer to fight for them.
“It’s not meaningful for a lot of residents,” he said. “We don’t want them to have to go through all that. We just want the facilities to comply with the law.”
Gilliam said it’s too speculative to assume that the new laws will be ineffective.
"Ultimately, the court is not tasked with determining whether the California Legislature could have devised a different or better system to end the practice of nursing homes ‘dumping' residents who participate in Medi-Cal. The question before the court is whether California provides ‘no mechanism whatsoever’ to enforce administrative readmission orders, and the factual record here leaves no room to reasonably dispute that such a mechanism exists,” he wrote.
Borden said he will likely appeal the ruling.
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