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Jury penalty against nursing home exceeds state's punishment

California Watch
By Christina Jewett
May 14, 2010

State regulators were far kinder to an Auburn nursing home last year than a Sacramento jury was yesterday.

The jury handed down $28 million in punitive damages over the death of one 79-year-old woman.

The state, after issuing citations over the facility's failures in three different patient deaths, dropped its bid to strip the facility of its operating license a year ago.

The Department of Public Health first moved to take away the license in 2007, in line with a state law that calls on health authorities to de-license a nursing home if it gets two "AA" citations within two years. Those citations are only issued when a nursing home's failures result in a patient's death.

On May 7, 2009, the department dropped the case in favor of a $120,000 fee and probation agreement. State officials decided that the facility had improved since the patients died. It had changed management, staff, training and policies, the settlement agreement said.

"The Department … believes that (Colonial Healthcare) has demonstrated its ability and commitment to achieve and maintain compliance with requirements," the settlement says.

The Colonial settlement was in the reams of files I compiled in recent months while writing about a 2004 state law that has since given the state's nursing homes an additional $880 million in funding.

The California Watch report found that despite the law's goals of improving staff or wages, more than 220 homes either cut staff or wages (or lagged below a staffing standard set in 2000) while earning additional funds from the state.

Colonial Healthcare, which was part of our analysis of hundreds of homes, made some boosts and cuts in staffing and improved nursing assistant wages as its Medi-Cal reimbursement generally grew from about $7.1 million in 2004 to $8.4 million in 2008, according to data provided by the Office of Statewide Health Planning and Development.

Those numbers were not part of the heartrending case presented to jurors. They heard details of a 2005 death that came before an additional three deaths cited by regulators.

The Sacramento Bee wrote about the case of Frances Tanner, 79:

Tanner was spirited and mobile but suffering from mild dementia, when she moved into the home in March 2005, Pao said. Seven months later, after a fall that resulted in a broken hip, she was dead from an infected bedsore.

During testimony before Judge Roland Candee, jurors heard accusations of chronic understaffing, poor medical documentation and corporate greed. One former Colonial staffer said he would not place a relative at the home.

When state officials dropped their case against Colonial, they did it in exchange for the facility dropping its appeals of the state's citations in three deaths.

Here are the basics of those cases. Typically, the state posts "AA" citations - its harshest - on its website. But they weren't apparent Thursday evening, so these accounts are based on summaries of the citations written by the advocacy group California Advocates for Nursing Home Reform:

  • On August 20, 2007 a patient fell and fractured several ribs. The patient was not taken to a hospital, but rather given a painkiller that decreased his oxygen saturation level. The patient died 50 minutes after he was given a final dose of the painkiller.
  • On Jan. 4, 2006, a patient with no history of diabetes was found choking. The patient had been given a diabetes drug meant to lower one's blood sugar, even though the patient did not have diabetes. The patient died days later in a hypoglycemic coma.
  • On Dec. 6, 2005, a patient who needed a machine to keep her airway open due to sleep apnea was not given one. The patient complained of feeling tired at 9 p.m. and was given medication to help her sleep. By 11 p.m. she was found unresponsive, but the facility did not perform CPR. Her family was notified of her death at 11:40 p.m.

In the case tried in Sacramento in recent weeks, Sacramento attorney Ed Dudensing accused Colonial and its parent company, Horizon West, of putting profits before patient care, the Bee reported.

The state's Medi-Cal agency, which reimburses nursing homes for care to low-income adults, did not use such blunt terms, but also found fault with the company along the same lines.

In a 2007 audit, state officials refused to reimburse the company for $85,391 it billed the state for an "executive retreat that is not related to patient care, involves lectures that focus on revenue enhancement and marketing, and includes alcoholic beverages."

(More on this kind of conduct in a story I posted about how the 2004 state law gave rise to some creative billing practices.)

The Bee reported that Horizon West, which owns 33 California nursing homes, vigorously defended its practices and treatment of Tanner.