Norris Cunningham

This month, the Supreme Court announced that it would review the Seventh Circuit’s recent ruling in Talevski v. Health and Hospital Corporation, et al. This case has potentially far-reaching implications and could significantly increase the number of claims against nursing homes and the cost of such claims. 

If SCOTUS affirms the Seventh Circuit ruling in this case, this provides a new cause of action, a new avenue for recovery outside of any statutory damage caps, for plaintiffs bringing suit against government-owned nursing homes in the Seventh Circuit, specifically in Indiana where the facility that is party to the lawsuit is located. Notably, this affects governmental or quasi-governmental entities like county hospitals. Since the majority of nursing homes in Indiana are licensed in a similar fashion to the facility that is a party to this suit, the impact would be widespread.  In fact, in Indiana, more than 90% of nursing homes are owned by county hospitals.

According to Centers for Medicare & Medicaid Services data, in the industry overall, more than 3,000 skilled nursing facilities experienced a change in ownership between 2016 and 2021.  Of the 15,560 Medicare-participating SNFs in the nation, roughly 7.1% (1,105) are owned by a government entity.  Many of those facilities may have increased liability risks depending upon the outcome of Talevski.  

Because HHC, the facility involved in the case, is publicly owned, it can be sued for damages under Section 1983 of the U.S. Code.  Section 1983 of Title 42 of the United States Code provides an individual the right to sue government employees and others acting “under color of state law” for civil rights violations.

Angela Rinehart

Right now, under the Seventh Circuit ruling, a plaintiff can bring a suit under section 1983 for an alleged violation of residents’ rights under the Federal Nursing Home Reform Act (“FNHRA”). Prior to that, residents could only file state law claims for negligence or medical malpractice unless there was a state law cause of action for violation of residents’ rights.

Parties have attempted to bring this very issue to the Supreme Court previously. Most recently Justices Alito, Gorsuch and Thomas voted to take up a similar case in 2018, which was not successful. As such, it appears that some of the more conservative members of SCOTUS would like to make a clear ruling on this issue.

If the lawsuit is allowed to proceed, meaning that SCOTUS affirms the Seventh Circuit ruling, that will mean essentially that the case will proceed on the merits of the claim in federal court as there will now be a new private right of action for Plaintiff’s to file section 1983 claims in federal court as opposed to bringing negligence/medical malpractice cases in state court. The impact of this is that these lawsuits allow for substantial financial awards, including attorney fees, and as mentioned above, will increase liability risks for many government-owned facilities. 

If SCOTUS overturns the Seventh Circuit’s ruling, that is a win for the nursing home industry. Given such a ruling, lawsuits alleging over-administration of medications, and various other allegations related to care and treatment, will continue to be brought via negligence, or malpractice actions in those states that do not allow a private cause of action for violations of resident’s rights.

Norris Cunningham is a founding shareholder and leads the Health Care Practice Group at Katz Korin Cunningham PC (KKC) in Indianapolis. Contact him at [email protected]

Angela Rinehart is an associate attorney in the Health Care Practice Group at KKC and focuses her practice on the defense of long-term care providers. Contact her at [email protected].

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.