General and professional liability claims costs for long-term care operators are projected to increase by 6% in 2019, according to the findings of an analysis recently released by professional services firm Aon.
The projected national 2019 loss rate is estimated to be $2,410, according to the 16th published edition of the 2018 Aon General and Professional Liability Benchmark for Long Term Care Providers. That means that a facility with 100 occupied beds can expect approximately $241,000 in liability expenses next year.
Twenty-nine long-term care providers participated in the study, which looked at 17,400 non-zero claims, Aon said. The exposure base consisted of 185,600 long-term care beds, primarily skilled nursing facility beds but also several independent living, assisted living, home healthcare and rehabilitation beds. The database represents approximately 14% of the beds in the United States, Aon said.
“In the context of liability costs, assisted living operators are subject to a similar regulatory landscape as skilled nursing homes. Therefore, these costs can be expected to vary significantly across states for assisted living facilities, also,” Kanika Vats, associate director and actuary, U.S., at Aon, told McKnight’s Senior Living.
Mirroring last year’s results, falls-related injuries (42%) and pressure ulcers (33%) were the two top claims cost categories. Pressure ulcer/wounds claims represented the highest claim cost, at approximately $251,000, followed by adverse treatment/procedure outcomes ($190,000) and falls with injury ($165,000).
The report also examined the effects of arbitration agreements on liability costs, finding that the use of arbitration has increased over time. Of the claims that closed between 2015 and 2017, 63%, on average, had an arbitration agreement in place, compared with an average of 51% between 2008 and 2014. On average, according to Aon, claims that resolved with arbitration agreements closed more than two months faster than other claims.
“Operators may be able to control costs by entering into arbitration agreements with their clients at the time of their admission into the assisted living facilities,” Vats said.