At stake: ‘Multiple millions'
'Multiple millions' at stake for state care centers

By Randy Ellis

Published: March 24, 2008

The Oklahoma Court of Civil Appeals has granted class action status to a lawsuit that claims Oklahoma nursing home owners are owed millions of dollars because Medicaid reimbursement rates have failed to cover operating costs.

"Multiple millions of dollars” and perhaps even "hundreds of millions of dollars” are at stake, according to attorneys and a witness involved in the lawsuit.

The ultimate outcome of the case will affect state and federal taxpayers since the state pays about 30 percent of nursing home Medicaid expenses and the federal government covers the other 70 percent.

The state likely will request a rehearing or appeal the March 12 class action decision to the Oklahoma Supreme Court, said Howard Pallotta, general counsel for the Oklahoma Health Care Authority, which administers the Medicaid program for the state.

The state denies that nursing homes have not been adequately reimbursed, Pallotta said.

Daily reimbursement rates have increased steadily from $66.75 in January 2000 to $103.97 in January 2006, state attorneys reported in court documents.

Nursing home attorneys countered that rates have not been adequate to cover increased costs and mandates.

About 70 Oklahoma nursing homes have gone out of business in the past few years because the rates haven't covered costs, said Marjorie Galt, one of the attorneys representing the nursing homes.

Pallotta, however, said nursing homes closing and going bankrupt doesn't necessarily mean rates are inadequate.

"There are a lot of reasons nursing home go out of business — bad management, mortgages they can't pay,” Pallotta said.

Galt said low reimbursement rates also are linked to recent reports that dozens of nursing homes have stopped carrying medical liability insurance.

Becky Moore, executive director of the Oklahoma Association of Healthcare Providers, said low reimbursement rates have forced nursing home operators to choose between providing coverage and taking care of residents.

However, attorney L. Ray Maples, who has sued nursing homes for poor care, said at a news conference last week that he knows of a nursing home that has dropped insurance even though the owner has million dollar beach houses, a plane and multiple Mercedes.

The Court of Civil Appeals' decision to grant class action status to Oklahoma nursing homes reverses an earlier ruling by Oklahoma County District Judge Dan Owens. Owens had denied class action status.

Making the lawsuit a class action would give attorneys the ability to represent all 370 or so Oklahoma nursing homes that provide care to Medicaid patients in one lawsuit, so the nursing homes wouldn't have to file separate lawsuits to plead their cases.

The government mandates and regulates the level of care that Medicaid patients must receive, so the law requires the government to provide sufficient funding to cover the cost of providing those services, Galt said.

Comments