Your best shot at keeping liability premiums down

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Marty Butler
Marty Butler

Over the past few years, more than a half-dozen insurance companies have exited from the senior living professional liability insurance marketplace due to high claim activity and financial loss. There are certain states and geographic areas — particularly metropolitan ones — where professional liability insurance is difficult to obtain. Insurance carriers in these areas typically offer insurance at a significantly high per-bed insurance rate.

The CNA's Aging Services 2016 Claim Report identifies that the setting does not significantly alter the cost per claim. The average total paid claim for assisted living is $221,496, for instance, which is higher than the average skilled nursing claim of $212,766. 

According to the same CNA report, resident falls and pressure ulcers (or pressure injuries) continue to be the most common claim allegations, accounting for 42.7% and 18.6%, respectfully, of the closed claims in the study. Professional liability insurance companies pay keen attention to the claim activity surrounding these two liability loss drivers. So what should organizations do to minimize risk and drive down insurance costs?

It is imperative that senior living providers are committed to a falls management program.

Resident falls continue to be a major concern for corporate management, assisted living and nursing home administrators, nursing staff, family members and residents. The total medical cost for nonfatal and fatal fall-related injuries was an estimated $28.2 billion in 2010, according to information from the American Occupational Therapy Association. And it keeps getting worse with time. By 2020, the cost associated with falls is projected to be $32 billion.

To help prevent claims and lower costs, include the following components in your fall management program:

  1. Methods to identify residents at risk (for instance, Fall Risk Assessment, MDS tool)
  2. Assessment time frames
  3. Methods to identify risk factors
  4. Implementation of Professional Standards of Practice
  5. Notification of physician, family/legal representative
  6. Documentation requirements
  7. Care plan development
  8. Communication methods to clinical and direct care staff
  9. Monthly risk management meetings (weekly, if the average of falls is higher than the state and national average)
  10. Quality assurance audits/records (tracking, trending, analysis)

Wound management also important

Protocols and procedures regarding pressure injuries can aid in the mitigation of claims, too. 

An effective wound management or pressure injury program should provide nursing standards for accurate assessment, prevention, treatment and implementation of protocols. The goal is to ensure that appropriate measures are taken to prevent skin breakdown and provide guidelines for treatment of any pressure injury that might develop.

Using the aforementioned CNA Claim Report as a gage, if a senior living community could move the needle on the loss drivers that are causing approximately 61.3% of claims, then it would inherently make liability insurance costs more affordable, not to mention enhance the quality of life for residents.

Regardless of the fall prevention program, strong communication between disciplines, work shifts and families are crucial as well. You may not be able to prevent every fall, but you can head off lawsuits by communicating with families and informing them of the steps that you are taking to provide their loved ones with the highest quality of living.

Marty Butler is senior vice president, practice leader, for Assurance's Senior Living and Nonprofit divisions. With more than 25 years of experience, she capitalizes on her expertise to help set the strategy and vision of both practice groups based on client needs, industry trends and regulations. Butler is involved in several associations, including Argentum, Leading Age and the American Health Care Association/National Center for Assisted Living.

McKnight's Senior Living welcomes marketplace columns on subjects of value to the industry. Please see our submission guidelines for more information.

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