Nursing homes should expect to see a 6% increase in liability claims next year, which, for a 100-bed facility would total about $241,000 in expenses, after the uptick.
That’s according to a new analysis, released Tuesday by the American Health Care Association and professional services firm Aon. Based on a survey of nearly 30 long-term care providers and more than 18,000 claims, the firm estimates that operators should expect to see a 3% uptick in total claims frequency, coupled with another 3% climb in the average size of each claim.
Aon estimates an average loss rate of $2,410 per bed, which can quickly add up for operators, noted Kanika Vats, an associate director and actuary with Aon.
“These costs are a significant portion of long-term care providers’ operating budget,” Vats told McKnight’s. “A 6 percent year-over-year increase is not immaterial. So, from our viewpoint, it would continue to serve providers’ interests to manage these claims as best as they can to keep costs in check.”
Vats noted that, same as last year, falls-related injuries (42%) and pressure ulcers (33%) were the two leading claims cost categories. Pressure ulcer/wounds claims tallied the highest claim cost at about $251,000, followed by adverse treatment/procedure outcomes ($190,000) and falls with injury ($165,000).
Arbitration has proven favorable to providers in recent years, and use of this method to resolve disputes has increased, Aon found. Of claims that closed between 2015 and 2017, about 63% had an arbitration agreement in place. That’s compared to 51% between 2008 and 2014. On average, claims that resolved with arbitration closed two months faster, the analysis found. Vats said it’s crucial that providers ensure their agreements are well-written and well-enforced to be able to reach those favorable outcomes in court.
“Liability costs are an ongoing problem for our providers. Despite the fact that quality of care has improved, this report confirms that long term care providers are still absorbing high liability costs,” Mark Parkinson, president and CEO of the AHCA, said in a press release accompanying the analysis. “Arbitration agreements and other reform efforts can help ensure that residents and providers have a way to effectively and efficiently resolve disputes.”