Blanket Immunity in the Face of COVID-19: Disparate Public Policy Impact for North Carolina Nursing Home Residents

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As COVID-19 began to sweep the nation in the Spring of 2020, many state governments began taking measures to protect the nation’s health care workforce during such unprecedented times. Among these measures were actions taken by state officials from both the executive and legislative branches that aimed to mitigate health care workforce barriers, slow the spread of COVID-19, and shield health care providers from civil liability for COVID-19-related claims. Many argue that these state actions, particularly those applicable to nursing homes, were enacted with far too much breadth, and could ultimately be found unconstitutional.

Background: Immunity and Emergencies

Prior to the pandemic, all fifty states had adopted some variant of a State Emergency Management Act, which provides immunities to private actors who render assistance or advice at the request of the State during a declared state of emergency. Yet as the threat of the pandemic became clearer, state governors and legislators across the nation began enacting new, additional forms of liability waivers specifically related to the COVID-19 pandemic. The new waivers provided broader immunity protections to health care workers in an effort to temper the concerns of health care providers and assure that persons affected by the virus would receive much-needed treatment. As of August 2020, twenty-seven states had enacted some additional form of COVID-19 liability waiver, some introduced by legislation, but most introduced by temporary executive order. Among these newly enacted liability waivers were various grants of civil immunity afforded to health care providers rendering direct care during the pandemic. The scope of the immunity granted in the waivers, however, varied significantly among states, with some states only affording liability protection to emergency volunteer workers or those providing direct care to COVID-19 patients, and others, like North Carolina, providing all health care providers with blanket immunity for the duration of the public health emergency.

Varied Scope Among State-enacted Liability Shields

The effectiveness and appropriateness, and perhaps even the constitutionality, of COVID-19 liability shield laws turn on their scope. These laws were written during a rapidly emerging pandemic; accordingly, they are not always clear as to their (usually limited) intent, nor do they all use common language. Overall, the intent of most of the early 2020 legislative actions is reasonably clear; they are designed to protect front-line health care workers and facilities from negligence liability. Almost exclusively, state COVID-19 liability shields negate the immunity in cases of willful, criminal, or reckless conduct. But where the various state laws differ significantly is in the breadth and the extent to which the law immunizes medical negligence that did not arise from treatment of COVID-19 but occurred during the duration of the COVID-19 public health emergency. Not surprisingly, it is in the portions of the laws that outline this scope that read the most ambiguous.  The scope questions most likely to arise for judicial determination are which cohorts are protected and the extent to which the defendant’s conduct must arise from COVID-19 emergency treatment or state-ordered mitigation.

North Carolina’s Legislative Response to COVID-19: The Emergency or Disaster Treatment Protection Act

On May 4, 2020, North Carolina Governor, Roy Cooper, signed into law Senate Bill 704, which, among many other things, greatly expanded upon health care liability immunities previously enacted in an April 2020 executive order. Section 3D.7.(a) of Senate Bill 704 broadens the immunities by amending Chapter 90 of the North Carolina General Statutes (N.C.G.S.) to add Article 1L, the Emergency or Disaster Treatment Protection Act (“the Act”), codified as N.C.G.S. §§ 90-21.130 – 134.  The purpose, as laid out in the Act, is “to promote the public health, safety, and welfare of all citizens by broadly protecting the health care facilities and health care providers in this State from liability that may result from treatment of individuals during the COVID-19 public health emergency under conditions resulting from circumstances associated with the COVID-19 public health emergency.” The Act provides in relevant part:

(a)       Notwithstanding any law to the contrary, except as provided in subsection (b) of this section, any health care facility, health care provider, or entity that has legal responsibility for the acts or omissions of a health care provider shall have immunity from any civil liability for any harm or damages alleged to have been sustained as a result of an act or omission in the course of arranging for or providing health care services only if all of the following apply:

(1)       The health care facility, health care provider, or entity is arranging for or providing health care services during the period of the COVID-19 emergency declaration, including, but not limited to, the arrangement or provision of those services pursuant to a COVID-19 emergency rule.

(2)       The arrangement or provision of health care services is impacted, directly or indirectly:

  1. By a health care facility, health care provider, or entity’s decisions or activities in response to or as a result of the COVID-19 pandemic; or
  2. By the decisions or activities, in response to or as a result of the COVID-19 pandemic, of a health care facility or entity where a health care provider provides health care services.

The Act broadly defines “health care provider” and “health care facility” as essentially any and all conceivable medical providers and entities providing health care in the state, including nursing homes, health care facility administrators, executives, officers, directors, supervisors, board members, trustees, or any other individual in a managerial role, and COVID-19 volunteer organizations. It is clear that the Act’s intent is to protect all health care that is impacted by the COVID-19 pandemic for the duration of the pandemic, including health care to non-COVID-19 patients that is impacted by conditions created by the pandemic. This includes shortages of health care supplies and health care staff during the pandemic, as well as providers who provide good faith care during the pandemic but may lack the necessary training and experience typically required under normal circumstances to render such care. N.C.G.S. §§ 90-21-133(b) and (c) of the Act set forth limitations to the immunity; immunity does not apply to acts of gross negligence, reckless misconduct, or intentional infliction of harm. However, acts, omissions, or decisions resulting from resource or staffing shortages are specifically carved out in the Act and are not to be considered gross negligence, reckless misconduct, or intentional infliction of harm. Importantly, the Act does not define what constitutes gross negligence, only what does not. Thus, any court’s interpretation of what constitutes gross negligence will be decided in accordance with the state’s common law.

Implications of Liability Shields: The Case for Nursing Homes

COVID-19 response efforts by the North Carolina legislature and North Carolina Medicaid’s Division of Health Benefits (“DHB”) have provided for zero accountability on the behalf of nursing home operators, which has allowed nursing homes to evade liability in cases (particularly negligence cases) where the homes would have ordinarily been held liable, but for the protections afforded to them by the legislature. In this vein, the North Carolina Act has categorically deprived nursing home residents and their families of civil recourse arising from wrongs that occurred during the global pandemic. As the pandemic has revealed, the long-term care population is a population with extraordinary vulnerabilities to the virus due to age, underlying health conditions, and close living proximity. Since its onset, the pandemic has claimed over 182,228 lives in U.S. nursing homes. Notably, while less than one percent of Americans (.6%) live in nursing homes, this small fraction accounts for over thirty-eight percent of COVID-19 deaths in the United States. In North Carolina alone, there have been over 52,579 cases of COVID-19 in long-term care facilities resulting in over 5,314 deaths. In the case of nursing homes, the devastation wrought by the pandemic revealed longstanding systematic problems including understaffing, lack of resources, and serious infection control deficiencies, all of which existed and went relatively unnoticed prior to the pandemic. A study published in June found that lax enforcement of federal staffing requirements in nursing homes led to overall worse health and safety outcomes among all residents.

The state legislature’s blanket immunity for nursing homes sets a concerning precedent that could prevent providers from putting appropriate protocols into place to protect residents from the virus. The lack of accountability removes incentives for facilities to take preventative measures, including testing employees and ensuring an adequate supply of PPE. Of more concern, the immunity laws effectively shield genuinely bad actors in the nursing home industry from any sort of accountability. While the nursing home industry did not cause the pandemic, its poor infection control measures, inadequate staffing, irresponsible use of CARES Act funds, and sluggish mitigation created an environment that allowed the virus to proliferate—and a grant of blanket immunity signaled to the industry that these sorts of actions were permissible. Blanket immunity laws protect irresponsible bad actors at the expense not only of their residents, but also their responsible competitors.

In an industry that has become dominated by private equity and investment group-ownership, nursing homes have become just another investment in the firm’s portfolio, with little regard to the residents they serve. A recently published working paper revealed that private equity ownership in nursing homes leads to a 10% higher risk of death and an 11% increase in spending. In 2019, the ten largest nursing home chains across the country had combined profits that exceeded $20 billion; top executives make millions in salaries and bonuses. Yet at the same time, regulations on the industry have become less strict, likely as a result of a lobby of powerful interest groups.

COVID-19 response efforts by North Carolina Medicaid, too, failed to protect North Carolina nursing home residents during the pandemic, and if fact, might have contributed to a lack of incentive to control COVID-19 outbreaks in nursing homes. On April 27, 2020, Medicaid announced various reimbursement changes relative to nursing homes affected by COVID-19. For nursing homes that had at least two positive COVID-19 residents, the facility would receive an increased per patient base rate for all Medicaid residents in the facility. Moreover, for residents that are confirmed positive for COVID-19, the facility receives an additional rate increase per resident in an amount that is almost four times the standard daily reimbursement rate. In this regard, there is a perverse incentive for profit-driven nursing homeowners to profit off of the pandemic at the cost of tax payer dollars. Effectively, North Carolina has allowed, if not incentivized, a lack of accountability on the behalf of nursing homes by enticing nursing homes with increased payments for residents diagnosed with COVID-19, then insulating the nursing home from virtually all liability that could follow.

A Question for the Judiciary

Many of the health care provider liability shields present difficult questions of interpretation, particularly with regard to whether they are limited to emergency triage decisions, mitigation, or treatment efforts in contrast to broader acts or omissions that may have contributed to the COVID-19 outbreak, such a poor infection control measures, and inadequate staffing. Perhaps the issue most open to interpretation, and one most certain to be litigated, is the extent to which the immunity is tied to or arises from pandemic-related care or services.

The legislature’s intent to stand by the immunity protections was made clear when the North Carolina General Assembly voted on June 23, 2020, in an overwhelmingly bipartisan fashion, to expand the same immunity protections afforded to health care providers to all businesses and persons. Moreover, the General Assembly unanimously passed an amendment to the May 4, 2020 provider immunity law, eliminating the law’s sunset provision and clarifying that the immunity would remain in effect during the pendency of Executive Order No. 116 or any time period in which a state of emergency was declared in response to COVID-19. With the legislative push to continue expanding immunity, this issue may be one for the courts.

Addressing the constitutionality of a state liability shield law is a daunting task, especially in a time where COVID-19 still continues to take lives, day after day. Nevertheless, courts will certainly have an important role in adjudicating disputes relative to the scope of the immunity shield law, along with its meaning and application to any particular case. In these cases, though, the more important role of the court might be in its boundary-setting role and ensuring that the law does not violate basic constitutional rights.

The North Carolina Act’s purported purpose is to protect public health. Yet it is difficult to see the public interest in broad grants of immunity when so many nursing home residents have fallen victim to this deadly virus, and when a requirement to merely use reasonable care would better serve the public. The public interest question goes to the heart of the normative questions raised by liability shields. Liability models reflect how society wishes to distribute risks between cohorts—between nursing homes and residents. But nursing homes as defendants have the ability to externalize some of those risks through liability insurance, while injured residents and their families have no equivalent mechanisms beyond the uncertainties surrounding their own health insurance. It would appear from the legislature’s actions that North Carolina lawmakers felt that a pandemic warranted recalibration of these models to further favor defendants.

Over 5,000 nursing home residents have died in the state, and the legislative response was to further expand liability protections, thus depriving more injured parties of their day in court. Yet, despite relatively strong public opinion against the immunity law, relatively few plaintiffs have attempted to challenge it. Whether this is because individuals are not aware that the law exists, or whether it is attributable to the general stall in society amidst the global pandemic, it is likely that in the near future individuals will begin turning to the courts in an effort to seek redress for wrongs that occurred during the pandemic.

Viable Constitutional Challenges

In light of the particularly devastating impact COVID-19 has had on nursing homes, broad provider immunity laws, like the one in North Carolina, may face constitutional challenges, particularly on due process grounds. Moreover, families of residents killed by the virus may very well have a claim that the immunity law violates their equal protection rights, as immunizing nursing homes from liability wipes out an entire class of people who have been harmed.  Further, there is already ample evidence that COVID-19 has disproportionately impacted already vulnerable populations and persons of color. The legislature’s actions—immunizing some actors—exasperates the disproportionate impact on these populations.

In many ways, the liability shield laws operate similarly to a cap on damages. Immunity shield laws could be challenged on state constitutional grounds under a theory that has proven successful in some states in striking down medical malpractice tort reform legislation. While a majority of State tort reform laws have survived due process and equal protection scrutiny, this view is not dispositive with regard to liability shield laws. A key distinction lies in the respective scope. Tort reform laws stop at adding procedural barriers or capping pain and suffering damages. These measures merely limit a plaintiff’s ability to impose civil liability. Liability shield laws, on the other hand, deprive plaintiffs of the ability to impose civil liability at all. Article 1, Section 18 of the North Carolina State Constitution provides, “all courts shall be open; every person for an injury done him in his lands, goods, person, or reputation shall have remedy by due course of law; and right and justice shall be administered without favor, denial, or delay.” It could be argued that the legislature and governor’s actions violate these core tenants of the North Carolina Constitution and provide an area ripe for litigation for North Carolinians affected by the law to seek recourse.

Prospect for Social Change

Ultimately, while constitutional challenges to the Provider Immunity law may be viable, the success of such challenges will hinge on a number of factors. During these unprecedented times, front-line workers treating COVID-19 patients are more than deserving of the protections afforded to them by the provider immunity law. COVID-19 is a novel virus, and with such unknown territory should come protections for brave providers risking their own lives to serve others. However, questions remain regarding whether corporate owners of nursing homes that were chronically understaffed, seriously underfunded, and consistently cited for neglect (even before the pandemic) should be entitled to those same protections. It is becoming abundantly clear that the legislature’s protections effectively removed all accountability which once deterred nursing homeowners from cutting corners in ways that jeopardize lives. Accordingly, the constitutionality of the legislature’s broad grant of immunity for these sorts of bad actors is a question that may ultimately have to be decided by the North Carolina judiciary.

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About Olivia Smith (4 Articles)
Olivia Smith is a third-year law student at Campbell University School of Law and serves as an Associate Editor for the Campbell Law Observer. Originally from Salisbury, NC, Olivia received her undergraduate degree from Furman University, majoring in Accounting, and minoring in Spanish. Prior to law school, Olivia worked for a tax accounting firm in Greenville, South Carolina. Her passion for healthcare law emerged from her experience working in Compliance at a large health system in South Carolina. Olivia currently serves as the Secretary for the Campbell Law Federal Bar Association and is a member of the Campbell Health Law Association. This summer, she will intern at Anders Newton, LLC. in Raleigh, North Carolina. Olivia’s professional interests include healthcare policy, healthcare regulatory law, tax law, and ERISA.