Legal and Regulatory

Environment

Laws prescribe rules of conduct that are enforced by public authority

Violation is threatened with punishment

Laws serve mainly a protective purpose

Two main reasons why the long-term care sector is heavily regulated:

1. The government is a major payer

2. The clients are often frail and vulnerable

Two main categories of laws:

• Civil law

• Criminal law

Sources of Law1. Common law: Past court decisions

(legal precedents)

2. Statutory law: Laws made by the legislative branch

3. Administrative law: Rules and regulations crafted by the executive branch

Civil Law

Tort Law Contract Law

Tort: A civil wrong other than a breach of contract

Contract: A specific agreement between two parties

Civil law: Characteristics• Deals with relationships between private

parties

• When seeking remedy for injury, the plaintiff is a private party

• Penalties for wrongful acts are in the form of monetary damages

Criminal law: Characteristics• Defines crimes and provides for

punishments for crimes

• A crime is an offense against the general public

• Jail terms, fines, or both may be imposed

• The wrongdoer is prosecuted by a public prosecutor, but a harmed private party may also pursue civil action.

Crimes Specific to Health Care Delivery

• Billing programs for services not delivered

• Providing and billing for services that are not medically necessary

• Gross violation of commonly recognized standards of care

• Reckless disregard for the safety and well-being for patients

Tort Damages• Award of monetary damages to make the

person whole again

• Punitive (exemplary) damages for egregious conduct, such as– Malice– Gross negligence– Blatant violation of individual rights– Fraud

Contract• Legally binding agreement

• Between competent parties

• To carry out a legal purpose

• An agreement generally involves:

- offer and acceptance

- meeting of the minds

- consideration

Regulations• Classified as administrative law

• Crafted by administrative agencies of the government

• Interpret statutes and furnish details for implementing the statutes

• Carry the force of law

• Enforced by administrative agencies that crafted the regulations

Non-profit Ownership• Prohibited from distributing profits to

individuals

• Must serve a charitable purpose

• Tax exempt

• Private donors can claim charitable deductions on their tax returns

Proprietary OwnershipThree main types:

• Corporation

• Partnership– General– Limited

• Sole proprietorship

Desirable Qualifications of Board Members

• Respected community leaders

• Technical expertise in some area (health care, finance, law, etc.)

• Be able to bring community and client perspectives

Current NHA Issues

• Lack of uniform qualifications for licensure across states

• Most states do not mandate a bachelor’s or higher degree in health care management

• Shortage of qualified administrators

Licensing of Health Professionals• All states require nurses, therapists, and

physicians to be licensed

• Some states also license other health professionals

• Licensing laws govern to main areas:

- minimum qualifications

- scope of practice

Personal LiabilityThe administrator and other employees can

be held personally liable for

• Committing wrongful acts that cause harm

• Failure to do something they should have done and harm occurs as a result of the omission

• Unlawful acts regardless of whether harm occurs

Personal Tort Liability

Negligent acts Intentional acts

Breach of duty that results in injury

Willful actions in which the consequences are known and desired

Injury from NegligenceFour conditions must be present:

• A duty must be owed

• A breach of duty must occur

• An injury must result

• A direct cause-and-effect relationship must exist between the breach of duty and the resulting injury

Types of Intentional Torts• Assault and battery

• False imprisonment

• Invasion of privacy or breach of confidentiality

• Defamation: libel and slander

• Fraud

• Infliction of mental distress

Respondeat Superior• The nursing facility is held liable for the

wrongful acts of its employees

• Individuals may also be held personally liable

• The organization is liable even if it takes all reasonable steps to select, train, and supervise employees

• A supervisor is not an employer and cannot be held liable for the acts of employees he or she supervises

A facility may be held liable for the wrongful acts of contractors if:

• The facility exercises control

• Contractors are represented to clients as employees of the facility

• The facility fails to review the qualifications and credentials of independent contractors rendering services to patients

Facility Licensure• A nursing home cannot operate without

having been licensed by the state

• Licensure requires compliance with state nursing home standards and with the national Life Safety Code

• Generally, the license must be renewed annually

Facility Certification• Optional if the facility wants to serve

Medicare and/or Medicaid patients• The facility must comply with uniform

federal standards called Requirements of Participation

• The law requires substantial compliance rather than zero tolerance

• Three types: SNF, NF, ICF/MR• Dual certification: SNF and NF

Facility Accreditation• Optional

• Accrediting body: JCAHO

• Most nursing homes have chosen not to be accredited because

- deemed status is not conferred

- fees are high

• Research shows a high correlation between accreditation status and quality

Requirements of Participation(2) Equal access

• This requirement applies to certified facilities

• Such facilities are required to admit patients on a first-come-first-served basis regardless of the patient’s source of payment

• Patients in certified facilities must receive similar services

Enforcement of Certification Standards

• Survey process is the main tool

• Five different types of surveys: standard, abbreviated, extended, special, validation

• Citation of deficiencies

• Plan of correction

Deficiencies• Violation of a standard

• Resident-centered: violation affecting a single resident (e.g., an incontinent resident has not been cleaned).

• Facility-centered: violation affecting an operational system, such as infection control

• Severity and scope

Possible Sanctions• Directed plan of correction requiring

external consultation

• Denial of payment

• Fines

• Temporary management appointed by the state

• Termination from Medicare and Medicaid

Antidiscrimination Laws• Title VI of the Civil Rights Act of 1964

prohibits denial of benefits based on race, color, or national origin

• Section 504 of the Rehabilitation Act of 1973

prohibits discrimination based on physical or mental handicap

Also protects people with HIV/AIDS

Patient Rights• Governed by the Patient Self-

Determination Act of 1990

• To be informed of one’s rights

• Privacy and confidentiality

• Freedom from abuse, neglect, and misappropriation of property

• Option to make decisions about one’s own care

Substitute Decision-Making and Advance Directives

• Role of family members

• Legal guardian

• Advance directives:

– Living will

– Do-not-resuscitate order

– Durable power of attorney

HIPAA 1996• Governs the use and disclosure of patients’

protected healthcare information (PHI)• It is illegal to gain access to PHI except for

- delivering health care- carrying out facility operations- reimbursement

• Exceptions: Emergencies, patient’s transfer to another facility, legal requirements

• Other uses or disclosures require the patient’s written authorization

HIPAA (contd.)• Facility must protect transfer of PHI• Facility must have a privacy policy

detailing how the facility will use and disclose PHI

• A copy of the policy must be given to each patient or his/her guardian

• Policy must be posted in the facility• Violations are subject to civil and criminal

penalties