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Appeals Court Authorizes Injunctive Relief Against Nursing Facilities

By: Courtney B. Amelung

In State of Maryland v. Neiswanger Management Services, LLC, et al., the Court of Appeals of Maryland was recently asked to decide whether the Attorney General has authority to seek injunctive relief against a nursing facility pursuant to two different provisions of the Patient’s Bill of Rights, a comprehensive statute enacted by the Maryland General Assembly to identify and protect the rights of individuals in nursing facilities. 

The suit was filed by the State of Maryland (the “State”) against Neiswanger Management Services, LLC (“Neiswanger”), which operates four Maryland nursing facilities.  The State alleged that Neiswanger had engaged in a widespread and unlawful pattern of involuntarily discharging patients from its nursing facilities to homeless shelters or “sham assisted living facilities.”  The State also claimed that Neiswanger unlawfully discharged its residents in order to benefit from the public-insurance payment system for nursing facility residents.  Particularly, the State asserted that Neiswanger intentionally discharged Medicaid recipients to make room for Medicare recipients, because Medicaid has a significantly lower reimbursement rate than Medicare.  In addition, the State alleged that Neiswanger committed multiple violations of its obligations under the Patient’s Bill of Rights and the Code of Maryland Regulations (“COMAR”), including the failure to provide the requisite discharge notices, the failure to document discharges properly, and the failure to engage in discharge planning, among other violations.  Moreover, the State claimed that Neiswanger violated the provision of the Patient’s Bill of Rights requiring it to “cooperate with and assist” residents and their agents in applying for long-term care coverage from the medical assistance program (the “C and A Clause”). 

The State’s Complaint sought an injunction to prohibit Neiswanger from: (1) further violations of the Patient’s Bill of Rights and COMAR; (2) issuing notices of involuntary discharge for failure to pay except under specifically delineated circumstances; (3) discharging a resident who is a Medicaid participant or is Medicaid-eligible, without documenting the resident’s or legal representative’s failure to cooperate in applying for benefits or arranging for reimbursement; (4) discharging, for non-payment, any resident who has a pending application for Medicaid benefits, unless Neiswanger had a good faith basis for believing that the resident is ineligible for benefits; (5) discharging any resident to an unlicensed assisted living facility or incorporating such a facility into a post-discharge plan of care; and (6) discharging any resident to a homeless shelter, or incorporating such a discharge into a post-discharge plan of care, or discharging a resident without an identified discharge destination.    

With respect to the discharge-related violations, the State sought relief pursuant to the Injunction Clause of the Patient’s Bill of Rights.  The Injunction Clause provides that “[a] resident, resident’s agent, or resident’s attorney, or the Attorney General on behalf of the resident, who believes that an involuntary discharge or transfer that violates the [Patient’s Bill of Rights] is imminent or has taken place may request injunctive relief from a circuit court.”  The State also sought relief under the Enforcement Clause, which gives the Attorney General responsibility for enforcing and prosecuting violations of the C and A clause. 

Neiswanger filed a motion to dismiss the Complaint, which was granted by the Circuit Court.  The Circuit Court concluded that the two provisions of the Patient’s Bill of Rights that the State relied upon – the Injunction Clause and the Enforcement Clause – did not authorize the relief sought by the State.  The Court of Appeals disagreed and overruled the decision of the Circuit Court.

First, the Court of Appeals held that the Injunction Clause permits the Attorney General to bring suit on behalf of multiple unnamed residents who have been subjected to, or await, imminent, unlawful involuntary discharges, provided at least one individual’s statutory rights have been violated.  Second, the Court held that the Attorney General has authority under the Enforcement Clause to seek injunctive relief to enforce the requirement in the C and A Clause that a facility “cooperate with and assist” a resident or applicant’s agent in seeking assistance from the medical assistance program. 

If you have any questions or would like additional information, please contact Courtney B. Amelung, Ferrier R. Stillman, or any other member of the Healthcare and Senior Housing Groups

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