Dudensing Law Announces Reply To Plum Healthcare

SACRAMENTO, Calif., Feb. 20, 2023 /PRNewswire/ -- Recently, Plum Healthcare authored a press release regarding the verdict in Rios v. Plum that was false and misleading in numerous respects and must be addressed. First, Plum's suggestion that the jurors were split on the verdict is false. Every single juror found that Pine Creek had neglected Mr. Rios, that the neglect caused substantial harm to Mr. Rios, and that Pine Creek's conduct was malicious, oppressive and fraudulent. While a few jurors disagreed about corporate liability relating to defendants' malicious, oppressive and fraudulent conduct, the jury in total rejected defendants' defenses in this case.

Pine Creek did not present "strong medical evidence" that its neglect was not the cause of the stage IV to-the-bone pressure sore that Mr. Rios experienced and lived with for 330 days before his death. The jury unanimously rejected this premise. This was not surprising given that everyone agreed that the wound found on Mr. Rios after his discharge with 100% certainty would have been present at the time of Mr. Rios' discharge from Pine Creek. The only one who suggested otherwise was defendants' tarnished wound expert Dr. David Young, who wrote in his initial report that he believed the wounds happened before Mr. Rios was admitted to Pine Creek.

Plum's suggestion that the Court improperly granted an instruction that defendants engaged in a plan to maximize profits at the expense of patient care is patently deceptive and should be rejected. The Court imposed this evidence sanction pursuant to decades of legal precedent in California and based upon Plum's willful violation of more than 12 Court Orders. Even after imposition of this evidence sanction, Plum Healthcare withheld more than 30,000 pages of emails that had been previously ordered. Plaintiffs have brought a post-trial motion for terminating sanctions relating to this outrageous contempt of Court Orders. Further, the Court's instruction was a sliver of the evidence presented during the ten week trial relating to defendants' reckless plan to maximize profits at the expense of patient care. Pine Creek generated profits of 8 times the average nursing facility, all the while severely understaffing the facility relative to the acuity needs of its patients. The corporate overseers, which include private equity company GI Partners, Plum Management, and the Harmon Group, consistently pressed to maximize short-term returns to position the company for a short-term sale. Scores of emails presented at trial showed in full defendants' unyielding effort to squeeze every last penny of profit out of the Plum facilities. These documents are publicly available and we encourage anyone who has doubts to review them for themselves on the Court's online public website.

Plum's suggestion that Pine Creek's care of Mr. Rios "was reasonable, appropriate, and consistent with doctor's orders" is an absurd distortion of the truth. Every witness in the trial agreed that Mr. Rios was at high risk for the development of heel pressure sores and that the primary interventions of preventing them were floating his heels, repositioning him, using heel protectors, regularly inspecting his skin, and putting him on a low air loss mattress. All of these interventions were happening on an every shift basis at Kaiser Hospital before he was admitted to Pine Creek. Defendants utterly failed to do any of these things. They floated his heels 0 out of 42 shifts, repositioned him 1 out of 168 times, literally took off the heel protectors he arrived with and never used them again, did not regularly inspect his skin, and did not use a low air loss mattress. Defendants failed Mr. Rios across the board.

Plum's suggestion that Pine Creek is one of the premier skilled nursing facilities in the Sacramento area is similarly false. Witness after witness testified to rampant failures of care at the facility including a more than 30% per month fall rate, rampant in-house acquired pressure sores and ongoing failures to respond to call lights. The Court disallowed reference to 5 star because defendants had no witnesses to lay any foundation as to the reliability of 5 star and, in any event, 5 star was largely self-reported at the time and thus constituted inadmissible hearsay. Had the Court allowed referenced to 5 star, plaintiffs' expert would have testified – as he did in his deposition - to the manner in which Pine Creek gamed the 5 star system to secure a fraudulent 5 star rating. Plaintiffs' expert would have shown how as soon as Medicare required use of Payroll Based Journal data rather than self-reported staffing data, Pine Creek's staffing star rating dropped to 2 stars. Pine Creek's 5 star fraud was part of a host of fraud that was revealed during the trial including, as just one example, the Director of Nurses seeking to defraud Medicare by adding a care plan to the chart of a resident who had already discharged the building. 

Plum's attack on the jury for rendering a $25 million punitive damages verdict is again off base. The undisputed evidence at trial showed that Plum was a $1 billion company and the amount awarded was small relative to the value of the company. The suggestion that Providence is somehow being punished would only be true if Providence agreed to accept this contingent liability, which would have been a ridiculous business decision. Further, the Plum owners and Harmon Group owners still own the vast majority of the buildings on which the facilities at issue continue to operate. In addition, according to defendants' representations, it appears that defendants have at least $11 million in insurance, possibly more, and the punitive damages award is fully tax deductible. Finally, the purpose of punitive damages is to deter others from engaging in a similar course of conduct. This verdict should send a loud message to all in this practice area, including Providence, which is owned by former Plum administrators, that engaging in a plan to maximize profits at the expense of patient care is not only morally wrong but will not pay in the long run.

Finally, Plum's reference to the fact that plaintiffs dismissed GI Partners, the largest owner of Plum is in some way relevant is again false. Any verdict against a corporation is by definition a verdict against the owners of that corporation. As the single largest owner of Plum at the relevant time GI Partners is legally accountable. If GI Partners extricated itself via side agreements with other owners of Plum this certainly does not change the message the verdict sends to future private equity investors about the consequences that can result when they operate a nursing home company in the way GI Partners and the other owners did in this case. 

Plum's suggestion that verdicts like the one in Rios undermine the nursing home system could not be further from the truth. The jury – which consisted of three registered nurses, a research attorney from the California Court of Appeals, and other hard working and astute jurors – rendered a verdict that has held Plum accountable for its outrageous business practices and is what our community needs when nursing home operators make a conscious choice not to put patients first.

Media Contact: 
Joe Marchelewski
[email protected]

SOURCE Dudensing Law

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