Law360 (July 22, 2020, 3:56 PM EDT) -- In this edition of Coronavirus Q&A, top Baker Donelson health lawyers discuss efforts to thwart an "onslaught of litigation" alleging improper COVID-19 care, why the pandemic will make large hospital systems even more dominant, and how the relentless crisis is pushing caregivers and nursing home residents toward the breaking point.
Christy Tosh Crider
Both of the shareholders sit on Baker Donelson's board of directors and work extensively with health care providers in the Southeast, which is wrestling with widespread coronavirus outbreaks. Cowart and Crider shared their perspectives as part of a series of interviews Law360 is conducting with prominent attorneys regarding the legal and business fallout from COVID-19.
This interview has been edited for length and clarity.
You're both based in Tennessee, which like other Southeastern states is seeing cases rise sharply. How are your clients doing?
Cowart: My personal practice is the large nonprofit health systems in the Southeast. We saw our clients in New Orleans and Louisiana have the spring surge, but the surge right now is in east Tennessee, west Tennessee and north Alabama.
We're reaching capacity, and we're back to supply chain issues. Fortunately [personal protective equipment] is not the issue that it used to be. But remdesivir [for treatment] and reagents [for testing] are scarce and hard to get.
Crider: Like Dick, my primary client base is across the country but with a heavy focus on the Southeast. It's primarily long-term care that I've spent the most time with over the past four to five months. And what they're facing is seemingly impossible.
Their reimbursement rates were at razor-thin margins prior to COVID. And then you put on top of that severe staffing challenges, skyrocketing PPE and testing costs, reduced census [count of patients], increased regulatory oversight, and then the significant emotional toll on the staff of risking their lives to do their jobs every day.
It has presented a scenario that on some days seems like more than many of them can manage.
What COVID-19 issues are you working on most right now?
Crider: In spring, we spent a lot of time with clients on risk management to prepare for what will likely be an onslaught of litigation, which has already started. We've spent a really significant amount of time challenging unjust regulatory citations from [the Centers for Medicare & Medicaid Services] and others, and have been victorious on those.
We have counseled clients on novel billing issues, particularly related to testing. And for many clients who have been with us for 20 years, a lot of what we have counseled them on recently is just being their partner in getting to the other side of this.
Cowart: The early days were supply chain and employment issues. And we've been doing disaster relief for major health care systems. We've collected about $800 million of disaster relief for clients in the past 90 days. We're able to help them with what they need, which are the resources to stay open and operate.
Dick, you handle transactional work. What pandemic-related M&A are you expecting?
Cowart: My experience from crisis events is that the strong get stronger. So at the back end of this, there will be another series of combinations, because that's the nature of public emergencies as people migrate to strength.
When you're larger, you have more resources. You've also had to shift very quickly to digital products, and having a digital team that is already up and operating helps considerably.
Size and scale also helps you with being able to talk to Congress and [the U.S. Department of Health and Human Services] about the [Coronavirus Aid, Relief and Economic Security] Act distribution formulas. And it gives you the ability to shift resources to other hot spots.
Where does that leave smaller hospitals?
Cowart: The rural hospitals were already struggling. And when you shut down their elective cases, which many of those stay-at-home orders did, it put them in a very precarious situation.
And so the construction of regional systems — where you have emergency rooms and outpatients and light inpatient volume in the rural area, but it's connected digitally and with transport systems and specialty care to a major hub — is what's starting to work in the hospital and health system world.
I've heard other attorneys say they expect COVID-19 to make the hub-and-spoke model even more popular. Is that what you're anticipating?
Cowart: Geographically, the hub-and-spoke model is the sustainable model right now. The circumstances will depend on local facts, but assuming that a locality can sustain a medical group, an emergency room, maybe some [pregnancy] services, then having it connected to a more resourceful system is likely to occur. That's the natural flow of gravity right now.
Christy, what are your expectations for litigation against providers of long-term care? It seems like a lot depends on whether Congress creates some type of limited immunity for COVID-19 care.
Crider: The ability of many providers, especially smaller providers, to survive this financially is going to turn on immunity. And we need that not just at the state level, but as you mentioned, at the federal level as well.
I manage litigation for providers across the country, and attorneys are already advertising heavily to take COVID cases against long-term care providers. I just finished a regulatory hearing where we were victorious, and one of our experts was an infectious disease doctor from Johns Hopkins. And after we won, she commented to me and said, "I just cannot believe how much time and resources and emotional toll that it took away from that long-term care provider to fight a regulatory citation." And my response to her was, "That is the tip of the iceberg."
There's been pushback from plaintiffs attorneys who say very few personal injury or wrongful death cases involving COVID-19 care have been filed. I take it you expect that to change over time?
Crider: The statutes of limitations vary from one year to three or four years, and it is a frequent occurrence that we see a lawsuit filed just before the running of the statute of limitations.
We're seeing lawsuits filed within two or three months of the passing of the resident — that's really rocket fast, and that is a strong predictor of what we are going to see coming a year and two years from now.
Also Christy, will the pandemic usher in any regulatory changes for providers of long-term care?
Crider: There is a presidential task force of 25 members who are on the COVID task force and are going to make recommendations back to CMS about how to help providers during this time. And we are working with a few members of that committee to help get them information that would be helpful in easing the regulatory burden on our clients.
What specifically are you seeking?
Crider: One is some sort of limited immunity. Another is to have CMS issue some sort of memorandum to address the fact that we can't judge providers during a crisis time against standards that were set when we were not in crisis. And perhaps an easing of the regulatory penalties and fines, even when there's not technical compliance during this time period.
As Dick mentioned, the shortage of PPE was a very real thing during the first several months. And in some areas, it's a very real thing again now. Judging providers for not having the resources they needed during a time when they weren't available, it just absolutely makes no sense. Those are the sorts of things that we're looking at.
Dick, you've written about debates over the structure of the nation's health care system. What sort of structural changes might result from the pandemic?
Cowart: First, this has been a definitive accelerator of all digital health, not just telehealth. Literally, people are going to be taking their thermometer and putting it to their iPhones as part of the testing protocols we're developing. So it's much broader than just telehealth, although that had a 10-year advance in about three weeks.
Another is scope of practice: the role of non-physicians, the ability of a nurse practitioner to order a test because the doctor's not available, the ability of a pharmacist to change a prescription because a drug is scarce. That scope of practice is clearly going to get blurred more.
A third area is supply chain security. We learned pretty quickly that we've got to be a lot more focused on that. I know somebody who's cranking up a billion-dollar PPE plan in a southern state. We're not going to have this happen again.
And then also, on a larger scale, there is the movement away from employer-based health insurance. About 160 million of our 330 million Americans get their health insurance through their employer. [Because of job losses], several states are cranking back up their [Affordable Care Act] exchanges. And it's not about if you're a Democrat or a Republican. It's about people needing a place to buy insurance.
If even more people had lost their jobs — if it hadn't been for [the Paycheck Protection Program] and some of the other tax credits and programs — we could have had all those people losing their health insurance too and unable to afford it under COBRA. So that, I think, has created another wake-up moment.
In closing, have you two seen any notable impact of the pandemic that hasn't received as much attention as it deserves?
Cowart: The health care workforce is fatigued and fragile. They expected a break in the summer. Their ability to sustain this for months and not compromise their own health is very concerning.
And there's no contract labor available right now [to ease workforce burdens]. Some of the pricing I've heard on contract nursing is like $30,000 a month. So the assembled workforce, and its emotional and physical well-being, is really strained right now.
I assume the fix would be to stop the virus's spread?
Cowart: Part of your ability to sustain yourself is if you can see the finish line and say, "OK, I can do this a little bit more." The absence of a finish line right now is very demoralizing.
We all know that the finish line is when we have a vaccine. But these vaccines are coming maybe in the fourth quarter, or in the first quarter of next year. Those are very long periods of time to sustain this intensity of effort.
Crider: To Dick's point about the emotional toll on our workforce, I've been able to see firsthand what this has done to long-term care providers.
One, because of the frailty of their populations, the loss of life there has hit them more significantly than any other piece of the health care industry. And second, because of the length of stays, which on average are measured in years, the people that they are losing are like family members to them.
And so the emotional toll of losing 15 of your family members in a one-month period — as Dick said, that is not sustainable long-term. I've had more calls with providers in the last three months where tears were shed than I did in the first 20 years of my career.
Another piece of that is the isolation of long-term care residents. I don't think people outside the long-term care world really understand not only the emotional toll but the resulting physical toll when you take frail elderly people and you remove the familiarity of those they love during this really scary and dark period.
So do we need a way to preserve safety but restore social connections?
Crider: Providers have done a heroic job of figuring out how to do virtual visitations with iPads, of figuring out how to post pictures on social media so that daughters and sons can see their moms and dads. But at some point, there is just no substitution for being able to put your arms around them.
And as a society we're going to have to make some choices about how many of those choices we're going to leave to families individually. Because it may not be safe. There may be a transmission of the virus when that happens. But the alternative is many of these people living out the rest of their lives without being able to touch the people that they love. We're going to have to make difficult decisions about when we're going to give the right to make that decision back to families.
--Editing by Kelly Duncan.
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