How to avoid legal trouble: Tips for boards of senior care businesses

by | Feb 1, 2013

Litigation or threatened litigation in the senior care space is an ever-present facet of running a senior care business. An online panel discussion addressed ways in which boards of senior care businesses can avoid, or at least manage, legal trouble.

“In the face of uncertainty or risk, we may just instinctively want to stick our heads in the sand and say ‘not here, not now, not on my watch,’” said Rick Stiffney, president and CEO of Mennonite Health Services Alliance in Goshen, Ind., during the webcast sponsored by research and publishing firm Irving Levin Associates.

However, it is not a good idea for members of a board to put their collective heads in the sand said the webcast’s panelists.

“When things are troubled, (board) directors may think ‘if I resign I’m not going to have a problem.’ Well, that may be viewed as an abdication of your obligations,” said Joseph Hasson, a partner in law firm’s Ungaretti & Harris’ corporate and healthcare departments. “You can’t simply resign and think that this is going to go away. You need to hang in there, be involved, be engaged. And as long as you’re engaged and informed, your decisions are going to be protected.”

Communication is key, the panelists said.

“There needs to be a very good channel (of communication) between the staff and the board and the staff and residents and so on, and there has to be a strong feeling of accountability,” said Pamela Kaufmann, a lawyer representing senior housing and care providers at Hanson Bridgett. “Where I see clients getting into trouble is where the staff is very reluctant to report. It might be that these line staff are reluctant to report to the department heads, who in turn are reluctant to report to the executive staff, who are reluctant to report to the board. When you delay reports, you lose a lot of options and often can exacerbate that relationship between regulators and families.”

Some of the specific things boards can do to manage or avoid risk, the panelists said, include:

Make sure everyone on the board gets an orientation. An orientation increases solidarity, lets board members know what the expectations are and provides members with materials, such as the company bylaws and strategic plans and conflict of interest rules, which members need to be successful.

Boards need to research and understand what the risks are for their company and come up with a plan for managing those risks. Also, plan for risks that are uncommon, such as natural disasters.

Attend board meetings and read materials before making decisions. Don’t rubberstamp actions, and if any member objects to a board decision, he or she should make sure to register his or her dissent.

Make sure good policies are in place and that everyone knows and understands those policies.

Listen. Maintain an open dialogue with executive management, staff and residents and their families. Sometimes a resident or resident’s family just wants to be heard and a possible problem or lawsuit can be avoided by taking the time to talk things out. Sometimes, just say “I’m sorry.” “It’s very frightening to say ‘I’m sorry,’” said Kaufmann, “but (her clients) had some amazing results (doing so).”

Be clear in your communications. If managing a crisis situation, it may make sense to hire a public relations firm to handle public communications.

Dashboards are great if they are used as one of many tools to enhance knowledge or spur conversation among board members, but dashboards are not substitutes for “real talk” or in-depth understanding.

From: Healthcare Finance News

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