Aon analysts defined “loss rate” as “the annual amount per occupied bed required to defend, settle or litigate claims in a given year.”
Although long-term care providers in some states see claims amounting to 5% or more of the average Medicaid nursing home bed rate, providers in other states are holding the loss rate to less than 2% of the Medicaid daily reimbursement rate.
In Indiana, for example, where Republican Vice President-elect Mike Pence has been governor, the 2015 loss ratio was just 1.6% of the average Medicaid daily reimbursement rate. Kentucky has a high loss rate because its constitution bans limits on recoveries from suits seeking compensation from torts, or wrongful acts. Texas has held its loss rate to just 0.9% by putting a $257,000 cap on recoveries, Coleianne said.
In Texas, filing a claim “is much less attractive to plaintiffs’ attorneys,” Coleianne said. At acute care hospitals, loss rates tend to be lower and more stable, Coleianne said.
Coleianne said he wished Aon had been able to get more data from smaller care providers, and especially from providers in New York.
Chicago-based CNA Financial Corp., an insurer, has reported seeing some of its policyholders experiencing very large claims when patients confined to locked units elope from the units and get hurt, or die. Coleianne said Aon, a broker and consulting firm, has found that the most severe incidents in its database tend to result from bedsores. Bedsores are seen as a sign of patient neglect.