On July 15, a Superior Court panel filed its opinion in Scampone v. Grane. The opinion has been widely publicized as changing the landscape for nursing home liability in Pennsylvania — but to what extent? This article will review the Scampone case and its potential effect on nursing home litigation.
As a preliminary note, this article is not intended to comment on the potential challenges to the Superior Court’s opinion. There are several spirited issues that have been raised in favor of and against the decision. That may be the subject for another day, should the Supreme Court grant further review.
Madeline Scampone (the resident) was admitted to Highland Park Care Center, a skilled nursing facility, on Feb. 5, 1998. She had a number of co-morbidities, not unusual for her age and care level, including dementia, depression, hypertension, COPD, atrial fibrillation and osteoporosis. The claim focused on the time frame of December 2003 until her death in February 2004. It was alleged that as a result of neglect, primarily due to understaffing, the resident developed multiple urinary tract infections, dehydration, malnutrition and bed sores. It was further alleged that these conditions were substantial factors in causing cardiac arrest and death. She died at the age of 94.
The complaint alleged both vicarious and corporate liability. The plaintiff sought compensatory damages under wrongful death and survival statutes, as well as punitive damages.
Multiple parties were named in the lawsuit. By the time of trial, two remained — Highland and the management company, Grane Healthcare Company. At the conclusion of the plaintiff’s case, a compulsory nonsuit was granted as to Grane. The trial court also found insufficient evidence to support the punitive damage claim. Thereafter, the case was submitted to the jury on both vicarious and corporate liability theories. The jury returned a verdict in favor of the plaintiff for a total award of $193,000. All post-trial motions were denied and an appeal and cross-appeal were filed.
The Superior Court reversed and remanded the case for a new trial. In its opinion, the court held as follows:
• A skilled nursing facility can be held liable under a theory of corporate liability;
• A health care management company can also be subject to corporate liability;
• Chronic understaffing can form the basis for a corporate liability claim; and
• Sufficient evidence was presented to support a punitive damage claim against both Highland and Grane.
The First Holding
The court first held that a skilled nursing facility can be held liable under a theory of corporate liability. The viability of corporate liability was first recognized in the seminal 1991 case of Thompson v. Nason Hospital. Under the “corporate” theory, a health care entity owes four non-delegable duties directly to the patient: maintenance of safe and adequate facilities and equipment; duty to select and retain only competent physicians; duty to oversee all persons who practice medicine within its walls as to patient care; and duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for patients.
The threshold question is whether the health care organization plays a central role in the total health care of the patient. Unless this is answered in the affirmative, corporate liability does not apply. If corporate liability is applicable, then a claimant must establish that the health care provider not only breached one of the duties and had notice of the breach, but that the breach was causally related to the claimed injury.
Since the Thompson case, corporate liability has been extended beyond hospitals to HMOs and professional corporations providing in-patient rehabilitation. However, it has not been extended to other providers, including an out-patient physician office.
As to skilled nursing facilities (nursing homes), the lower courts have wrestled with the question of corporate liability for over a decade. Generally, the courts have overruled preliminary challenges, leaving the application of corporate liability as a factual issue subject to proof at time of trial. Scampone v. Grane Healthcare Company and Highland Park Care Center is the first appellate-level case to affirmatively extend the theory of corporate liability to a long-term skilled nursing model.
In so holding, the court acknowledged that independent attending physicians controlled portions of the residents’ health care. However, the court concluded that the degree of involvement of the nursing home in the care of its residents is akin to that of a hospital. As such, the court opined that corporate liability is applicable.
So while the claim of corporate liability against nursing homes is not a particularly new development, it has now been established as law through the Superior Court’s pen.
The Second Holding
In reaching its next conclusion, that a health care management company can also be subject to corporate liability, the court cited evidence that “Grane actually was in charge of managing the nursing home and its employees oversaw the quality of patient care.” Arguably, this is a more controversial finding as the management company, Grane, was not the licensed provider and did not provide the day-to-day care. It is anticipated that claimants will continue to push the corporate liability envelope to other non-licensed entities that may have a part in the operation of a nursing home.
However, the Superior Court’s holding was factually specific to the involvement of Grane. Based upon the record presented, the court opined that Grane had “assumed the responsibility of a comprehensive health center, arranging and coordinating the total health care of the [Highland] residents.” Thus, unlike the court’s generic extension of corporate liability to nursing homes, there was no blanket extension to management companies. As such, this will likely be an issue subject to further litigation on a case-by-case basis.
Parenthetically, the Scampone extension of corporate liability to both Highland and Grane raises a perplexing question: How many entities can concurrently play a “central role in the total healthcare of the patient”?
The Third Holding
The court next held that chronic understaffing can form the basis for a corporate liability claim. Maintaining adequate staffing levels is not, per se, one of the four specifically enumerated duties articulated in the Thompson case. However, Scampone held that this theory was encapsulated under the duty to “formulate and enforce policies to ensure quality care.”
Notably, this was not the corporate liability question posed to the jury. Rather, the jury interrogatory was whether Highland “itself failed to oversee its nursing staff.”
A more contentious issue involves the proof necessary to establish understaffing. The federal regulations do not identify a specific staffing number. In contrast, the Pennsylvania regulations require enough staff to provide 2.7 hours ppd (per patient day) of care to the residents. Highland argued that it met these requirements.
In contrast, plaintiff proffered evidence through testimony of former employees that Highland staffing was abnormally low and only increased to necessary levels during state inspections. In short, it was claimed the nursing home misled the state surveyors. Based upon this record, the court stated, “[s]ince Plaintiff’s evidence indicated that Highland violated the government regulation governing minimum staffing levels, the cause of action in question herein is unquestionably viable.”
This conclusion raises an interesting issue regarding the role of state regulations in determining understaffing. Implicit in the above-cited language is that the regulations establish a benchmark for whether a facility is understaffed. Put another way, it can be argued that proof of meeting the 2.7 ppd staffing level creates a rebuttable presumption that a nursing home is not understaffed.
The court also stated that the “persistent lack of adequate staffing constituted a violation of Highland’s duty to formulate, adopt and enforce adequate rules and policies … .” Thus, it was the chronic nature of the understaffing that established the breach. That being said, the question becomes, “What evidence is necessary to establish a chronic situation that is causally related to the resident’s injury?” It is a fundamentally important consideration in prosecuting and defending an understaffing claim.
The Fourth Holding
Finally, the court found that sufficient evidence was presented to support a punitive damage claim against both Highland and Grane. The court was influenced by two categories of evidence proffered by the plaintiff. First was the aforementioned understaffing. The court felt that sufficient evidence was presented that Highland and Grane were aware of the staffing issue and that it was causing improper patient care. Second, the court cited testimony that Grane employees falsified charts, or instructed others to do so.
The court went on to state “[d]eliberately altering patient records to show care was rendered that was actually not is outrageous and warrants submission of the question of punitive damages to the jury.”
As to the issue of causation, the court commented that “the effects of understaffing was [sic] specifically connected to [the resident's] care.” Again, this was a factually specific determination based largely on the testimony of former employees.
Prior to Scampone, the primary method for establishing liability against a nursing home was through the actions of the nursing staff — that is, vicarious liability. Scampone has affirmed a new avenue for direct corporate liability against the licensed nursing home operator. Further, the hiring of sufficient staff to provide necessary care has been recognized as part of the generic corporate duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for patients. These holdings are the current legacy of Scampone.
Going forward, the focus will shift to the quantum and quality of evidence needed to establish a prima facie corporate liability claim. The claim of chronic understaffing is a primary example. There has been an increased emphasis on discovery related to staffing levels. From a claimant’s perspective, this includes testimonial and documentary evidence suggesting chronic, purposeful understaffing and its adverse effect on the resident in issue.
However, for the nursing-home industry, Scampone can also be viewed as a blueprint for proactive measures to limit liability exposure as well as to bolster the defense of the corporate liability case. For instance, carefully defining the relationship between the licensed operator and managing entity and clarifying the control over day-to-day care may reduce the risk of corporate liability extending beyond the facility level.
The impact of current and former staff members for both prosecuting and defending the nursing home case cannot be underestimated. The Scampone panel relied heavily on such anecdotal testimony. Providing long-term care is physically demanding, and often mentally and emotionally draining work. Comprehensive and ongoing communication with all staff and offering responsive forms of support can both improve the quality of care and may ultimately assist litigation defense.
Further, emphasis on staffing calculations, use of adjunct staff, efforts at addressing “call-offs” and other day-to-day challenges within nursing homes can be proffered and accentuated in many ways. A detailed staffing analysis can be an important source of hard data to counter what may be at times subjective, non-specific and biased testimony.
The long term impact of Scampone remains unknown. What is clear is that the methods to prosecute and defend nursing home cases will continue to evolve and will likely lead to additional appellate review.
Since Scampone was decided, the Superior Court has denied en banc review. A petition for allowance of appeal was filed by Highland and Grane. As of press time, the Supreme Court had not yet ruled on the petition. •
William J. Mundy is a partner at the firm of Burns White. He is co-chair of the firm’s health and long-term care practice group and serves as defense liaison counsel for the Philadelphia Court of Common Pleas Nursing Home Litigation Program. He can be contacted at email@example.com.
John M. Skrocki is a senior member of the firm’s health and long-term care practice group. He has focused his practice on long-term care litigation for the past 10 years. He can be contacted at firstname.lastname@example.org.