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New York Nursing Home Operators Beware: Trouble Looms In Albany

Author: Dominic Donato

Guest Editor: Kiran Gupta

April 2, 2021 9:00am

Just as the blizzards end in upstate New York, a new type of storm is brewing for New York’s nursing home operators. As the State Legislature in Albany advances legislation to repeal immunity protections, the prospect of a litigation frenzy rises.

New York State Governor Andrew Cuomo was mired in controversy surrounding the State’s handling and severe underreporting of COVID-19 deaths in New York nursing homes. While the nursing home controversy appears to have been overtaken in the court of public opinion, in New York’s courts of law, nursing home operators should be prepared for an uptick in litigation as recently reintroduced legislation seeking to roll back COVID-19 immunity protections has been gaining traction.

In March 2020, Governor Cuomo issued Executive Order 202.10, which created seemingly benign immunity protections for nursing home and healthcare providers in connection with COVID-19.i Executive Order 202.10 would eventually be signed into law on April 6, 2020. Drafted with the support and reported consultation of the state’s healthcare lobby, the Emergency Disaster Treatment Protection Act (EDPTA) was included as a last-minute amendment to New York’s vast budget bill and enacted.

The EDPTA grants immunity from civil and criminal liability for negligent acts or omissions if: (a) the health care facility was providing health care services in accordance with applicable law, or pursuant to a COVID-19 emergency rule; (b) the act[s] or omission[s] occur in the course of providing health care services and the treatment of the individual is impacted by the health care facility’s decisions or activities in response to or as a result of the COVID-19 outbreak and in support of the state’s directives; and (c) the health care facility is providing health care services in good faith.

While immunity does not apply to willful or intentional criminal misconduct, gross negligence, reckless misconduct, or intentional infliction of harm, the EDPTA created a loophole which explicitly excludes acts, omissions, or decisions resulting from a resource or staffing shortage. As a result, the EDPTA not only protected against liability for COVID-19 related care, but also blocked ordinary medical malpractice suits related to care in New York’s nursing homes as long as decisions or activities in response to COVID-19 impacted an individual’s treatment.

The practical effects this immunity protection had on nursing home treatment were reportedly deleterious to individual treatment during the height of the pandemic. Attorney General Leticia James’ noted in a report dated January 30, 2021 that for-profit nursing homes have a significant financial incentive to admit new residents while maintaining low staffing levels.ii Accordingly, many for-profit nursing homes appear to have knowingly admitted more patients while experiencing staff shortages. This was particularly true for Medicaid-eligible COVID-19 patients, as providers received a 20% premium on top of the typical Medicaid reimbursement. The end result in some instances, was negligent treatment for which there is currently no recourse.

Following revelations about the state’s complicity in covering up nursing home deaths, legislation was reintroduced in the State legislature proposing not only a rollback on the remaining immunity protections, but also retroactive impact. State Senator Alessandra Biaggi – a noted Cuomo adversary – reintroduced Senate Bill S.05177, co-sponsored by Assemblyman Ron Kim (A.03397), with the intent of fully repealing the EDPTA and its nursing home immunity provisions.iii The bill was reintroduced with the purpose of permitting the Attorney General’s office to prosecute nursing home operators and healthcare facilities in cases of criminal negligence where operators knowingly did not do enough to protect lives. Perhaps more importantly, establishing a violation of laws and regulations would constitute negligence, as well as allow lawsuits over non-economic loss. Not surprisingly, this could result in a frenzy of litigation, spelling trouble for nursing home operators across the state.

On March 18, 2021, the Assembly passed its version of the bill. Its Senate counterpart currently awaits a committee vote. If Senator Biaggi’s bill also passes and is reconciled, it is unclear whether Governor Cuomo will sign the bill into law or risk the possibility of a veto override. Given the current direction of the prevailing political winds, it is possible Governor Cuomo will attempt to salvage the handling of one controversy, while attempting to deflect another.

Takeaway

In any event, nursing home operators and their insurers should be wary and prepared to defend their interests as potential trouble looms in Albany. As always, Tyson & Mendes will be carefully following the progress of this legislation and the contents of this article to provide important updates as they progress.

i Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency (March 23, 2021) https://www.governor.ny.gov/news/no-20210-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency
ii Nursing Home Response to Covid-19 Pandemic (March 23, 2021) https://ag.ny.gov/sites/default/files/2021-nursinghomesreport.pdf33
iiiSenate Bill S5177, (March 23, 2021) https://www.nysenate.gov/legislation/bills/2021/s5177
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