In common usage a "shylock" is a money-lender who lends money at an exorbitant rate and who employs collection tactics that are neither legal nor genteel. The term originates from Shakespeare's Merchant of Venice, where the lead character takes security for his loans in terms of a "pound of flesh."

While much has been written recently about credit card companies and big banks that issue credit cards, less has been written about a completely different group of fringe moneylenders who, like Shylock, would like nothing more than to get their pound of flesh.  They are called "third tier" collectors and some background is necessary to understand them.

Let's suppose Tom goes to his local bank and gets a credit card with a $500 credit limit. Over time that limit goes up to $10,000 because Tom makes his payments on time. Then the loss of his job due to layoffs or tough economic times makes it hard for Tom to make his payments.  Most local banks that issue cards will freeze Tom's credit and lower his borrowing ability, but will usually accept less than the full amount if Tom is truly struggling. This is the advantage of dealing with a bank in your own back yard.

Larger "mega banks" that issue credit cards do not have ties to a particular community, and treat every cardholder as just another one of several million customers. So when payments are late, the card gets cancelled, and if payments are not caught up, frequently the matter is turned over to a collection agency if the in-house collectors can't induce payment.

Most collection agencies are run by basically good people who have a tough job:  convince someone without enough income to make ends meet to pay some of that precious income over to them. Many set up payment plans and monitor debtors compliance with frequent encouragement and phone calls. These are good people with a  tough job. Most do it well, and the vast majority conform to the Fair Debt Collection Practices Act, the federal law that governs their conduct.

When a collection agency can't get a debt paid, one of two things happens. If the debt is of an amount that will support a lawsuit (usually more than $1,000), the debtor gets sued in their local court, their limited wages get garnished, and the bank gets its money over time. Often, however, and sometimes even with significant accounts over $5,000, the bank simply writes off the card debt as "bad debt" if it thinks that the chances of collecting the debt from the debtor are very small. The bank no longer attempts to collect the debt, and in many cases the debt is reported to the IRS as income because the debtor is relieved of paying the obligation.

This is where the third (and very ugly) tier of debt collectors come in. These are speculators who are gambling on making huge profits on debts the banks don't want to try to collect. It works like this. Contract law allows a party to assign their rights to a third person.  Thus a bank can assign its right to collect on a credit card account to a third party. So Acme Credit Solutions (to use a fictional name) buys Tom's credit card account (where Tom owe's $3,000 in principal, and another $3,400 in interest) from Big Ol Megabank for the sum of $100. The bank assigns its right to collect to Acme. Even though the bank quit trying to collect two years ago, the new owner of the debt starts sending letters and phone calls offering to settle the debt for half of the $6,400 it says Tom owes. Tom, who now has a new job and is working hard to right his financial ship, is aghast! He doesn't have $3,200 to pay Acme.

After about six weeks of collection calls Acme sends the file to its collection lawyer who decides that $6,400 is worth the time to collect. He sues Tom in the local circuit court.

Most of the people who get sued for credit card debt either never show up for the hearing (where the collector takes a default judgment) or if they do show up, they don't argue about the debt and the collector takes a consent judgment. The effect is the same:  their wages are going to be garnished for a very long time until the debt is paid in full. The only really good thing is that by getting a judgment the debtor now has to pay only 9% simple interest instead of 21% compound interest on the unpaid amount. Still it may be ten years or more before the debt is paid, and another seven before the event is removed from the debtor's credit report. The impact of a bad credit report on future employability, and on the ability to buy reasonably-priced insurance is significant.

But, now lets rewind this story and plug in the facts of an actual case, which because it is still in litigation cannot be disclosed by name.  In many cases there are defenses to paying old debts called statutes of limitation. But because debtors don't know about them, they often make the mistake of making payments.

Karen and Don got a credit card from a major home store while they lived in North Carolina. After a job loss, in 2004, they stopped paying on the card. In 2006 they moved to Missouri and got new jobs and bought a house. One day in 2008 they got a phone call from Acme Financial Group suggesting they would take half of the $5,000 they owed in exchange for full settlement of the debt.    Knowing their rights under the Fair Debt Collection Practices Act, Karen asked the collector to verify the debt.  It sent an account statement, which does not satisfy the requirements of the statute. She again demanded that the collector show that it was authorized to pursue the debt, since she had never had any dealings with Acme.

Then one bright sunny morning in 2008 they had a sheriff show up at their door with a summons. They were being sued in their county for breach of contract. Unlike the other ten thousand people served that year by sheriffs all over Missouri, they hired an attorney.

The attorney quickly ascertained that the debt was barred by the statute of limitations. Although Missouri has a long statute of limitations (five years on a credit card debt, and 10 years on a promissory note), the debt was created in North Carolina, and was breached in North Carolina. The right to sue first arose in North Carolina, and the statute of limitations in North Carolina is three years. The law is clear. If a creditor has a right to pursue an action in one state and fails to take action in that state within the time allowed by law, they cannot sue in another state in order to take advantage of that state's statute of limitations.

Karen's lawyer spotted something else critical in the petition filed by Acme. It did not say when the debt had been created, when the last payment was made, or when the breach occurred. It did not mention that the debt was created in North Carolina.  Instead it said simply that Karen and Don owed the money and needed to pay it. In other words, it was designed from the outset to hide key facts that would have alerted a debtor or the debtor's attorney to a valid defense.

Karen's attorney filed a counterclaim.  A counterclaim is a lawsuit that asserts a claim against the plaintiff - in this case Acme Financial Group - for money damages. Karen's attorney said that Acme had violated the Fair Debt Collection Practices Act by suing for a debt it could not legally collect. The lawyer looked at the court filing system and found that Acme had filed over 1300 lawsuits in the last 18 months against debtors like Karen and Don. So the attorney made the counterclaim a class action complaint.

Across the country every year thousands of consumers are sued on debts that the law would normally prevent from being collected by the statute of limitations. If consumers take no action to challenge the lawsuit, the creditor gets a default judgment and in most cases even if they later hire a lawyer they often cannot get the judgment overturned. It is a collection lawyer's secret:  leave out the dates and collect on the defaults.

The take away from all of this is very simple: if you get sued for any reason, see a lawyer. Even though you may think you owe the money, the law may provide you with a defense that prevents the lawsuit from being successful. Better to pay an attorney $200 than to pay a bank $6,400 you don't need to!

If you are asked to pay money - especially a small amount - in order to stop phone calls, do not do it. Paying money on an old debt - one barred by the statute of limitations - restarts the clock. The collections person may tell you he is trying to just get something in to show your good faith, but he is actually tricking you. Never send money to anyone who is a collector unless and until it can be demonstrated that a court has said you owe the money.

One final word needs to be mentioned. Recently, with the economy having hit a rough patch, one of the few growth industries in this country is debt collection. A collector does not have to be a lawyer. His conduct is regulated by the Federal Trade Commission, but often these collectors do not care about these regulations.

If a creditor tells you he is going to send the sheriff out to arrest you, or threatens you with jail over a debt, that is unlawful and a violation of the Fair Debt Collection Practices Act. If a creditor tells you that the state will use evidence of non-payment of bills to take away your children, that too is a violation. Collectors have been known to threaten to come to a person's house with a gun if payment was not sent. All of these activities are unlawful, and may violate the criminal law depending on the jurisdiction.  If you run into one of these collections persons get a lawyer right away. There is a good chance that a collector who acts like this is going to be paying you money, not the other way around.

And remember: if money worries are ruining your life and souring your relationships, the Consumer Credit Counseling Service and related agencies are there to help.

Time and time again I have counseled medical professionals that if you want to be successful as a health care provider, and you want to avoid being sued, the best way to do that is to have a great relationship with your patients. I explain the golden rule of risk management for health care workers is that people don't sue people they like.

Now, some people approach this advice like snake oil, wanting to try just a little bit before they write it off as hokum. But they would be well advised to buy the one liter size bottle because the advice is really good medicine. Providers who establish great relationships with their patients tend to prosper.

When Dr. Siefker saw my wife, he could easily have done a perfunctory exam and told her she had nothing in her throat.  Instead, he used a fiberoptic scope and showed her instead. Then he listened patiently to her concerns, wrote a prescription, and treated her kindly. If he was in a hurry to get to the next patient, it didn't show. You would have thought that there was not another patient in the practice that day.

In every situation where a client comes to our office to sue a medical professional, that medical or nursing professional has violated Rule Number One. Rule Number One is "the patient comes first."  Sometimes this happens because the patient is rude or prickly. Sometimes it happens because the patient has the temerity to ask questions that challenge the provider's assumptions. And sometimes it simply is because the provider treats all of his or her patients like cattle. But the bottom line is that the patient walked out the door feeling very much like he or she had not been listened to, and that the provider was not in any way empathetic about what they were going through.

In any medical encounter there are only two potential outcomes: either the patient will improve, or the patient will get worse. If the patient improves, and no harm befalls them because of the care, there's no malpractice lawsuit.

When the patient does not get better, the physician who took the time to listen, and encouraged the patient's questions is the one who is in the better position. This is because the patient will not hesitate to call this doctor, and possible stave off a tragic result. But the provider who treats patients rudely and regards them as cattle doesn't get the call saying the chest pain has gotten worse. He doesn't get the call because his attitude has told the patient that he doesn't care if the patient gets worse. 

In other words, adopting an attitude toward patients tends to be synergistic. If you adopt a good attitude, encourage open communication, and display to the patient that you do care about them, you get better information, and make better decisions. But treat them badly and the first you learn of the patient's bad outcome may be in the form of a summons.

What good providers like Dr. Siefker understand, however, is that it takes no more time to be pleasant and compassionate than it does to be rude and surly. I am constantly amazed at the people who refer to television's Dr. House as a good doctor. The character House tends to be mildly sociopathic, Machiavellian in his demeanor, and to say all the wrong things to patients at all the wrong times. 

Doctor's like House get sued regularly because they routinely violate Rule Number One. The patient leaves them feeling bad about the encounter. When that happens, it sets up the corollary to the golden rule of risk management: people enjoy suing people they don't like. I can't tell you how many times I've heard a client say they wanted to sue the doctor because they knew it would cause him to suffer the same way they did. For what it is worth, I tell clients the only reason to sue is for compensation. We do not sue to ruin other people's lives, we sue to obtain justice for our clients. But I harbor the belief that secretly many of the clients revel in the knowledge that their lawsuit caused the health care providers some form of discomfort.

What does all this mean?

It means go out of your way to be kind, caring and compassionate, and the chance you'll face a jury because of a serious mistake is very small. 

Whether you're a fan of the liberal media or the right wing media, one thing you will probably agree with is that the media tends to take situations that escape public scrutiny and report on them in a sensational way.  In the 1900s this kind of reporting was called muckraking because of a speech by Theodore Roosevelt.  It is alive and well today, and get ready because health care is the next great unexplored landscape for muckrakers.  One need only turn to a recent Los Angeles Times story to see that.

In a recent story the Los Angeles Times told readers that inept nurses were free to work in new locales.  It then went on to document the dozens of cases where nurses who had been disciplined in one state remained free to practice without restriction in other states.  The newspaper story carried reports from Connecticut involving a nurse who panicked and who took a child under her care to the parent's home rather than the hospital when the child stopped breathing.  She had been involved in a similar patient death in Florida, and Florida had taken her license.

As a result of the Times' story, professional boards of nursing will be increasing their surveillance of new applicants as well as checking the status of currently licensed nurses.  When Louisiana did this last year it found a large number of nurses with licensure issues in other states.  What currently prevents most nursing boards from taking this action is the fact that other states don't always report to federal and state databases, and procedures vary between states for imposing discipline based on the discipline issued by other states.  In addition, the cost to check the database - a fee passed on to the individual states by the federal government - is not cheap.  Some states, already in a budget crisis, simply don't have the funding to do a full check.

While an employer may rely on the state board of nursing to certify to a nurse's competence, it should not always rely on the state board to ensure that a licensed nurse is a good hire.  Because the board may not do a thorough investigation, and because in many states all a nurse has to do is lie to the board, it is a good idea to independently verify if a nurse is in good standing in every other place where she is licensed.

The last thing a provider wants is to find out that its nurses are not properly licensed, or that they have issues with their licenses in other states.  Employers are wise to conduct not only background investigations regarding criminal and drug problems, but also to find out in what states their employees have been previously licensed so as to determine if those employees have discipline in other states.

From a risk management point of view, a review of the licenses of nurses is a good idea.  Some nurses may lose or have their license lapse for non-payment, but continue working.  Others may have discipline issues in other states that increase the facility's risk for litigation.  Consider the case of Randy Hopp, reported on by the Los Angeles Times.

Hopp, who was convicted in 2004 of assaulting a nursing home resident.  At the time he practiced in Minnesota. At the time of the assault conviction it was the fourth facility since 1998 at which he had been accused of mistreating a resident. The nursing boards in Minnesota and Missouri placed him on probation, and Kansas imposed restrictions on his practice. Hopp surrendered his license in Texas. In California, however, his license remains clear.  If a nursing home hired him and failed to discover his prior assaultive behavior, no jury in the world would consider that to be something other than gross negligence.

The best practices in personnel management mean getting the best information.  A nurse who is unwilling to describe his past employment, or who lists employment that cannot be verified, is suspect until proved legitimate, and should not gain access to patients until his background is verified.

From 1935 until 1982 the DuPont Corporation had a slogan that reminded consumers that it was all about "better things for betting living, through chemistry."  Over the years the phrase "better living through chemistry" came to symbolize how the advancements of science made life better.  But like all phrases, for some the phrase became a description of their slow descent into the ravages of drug addiction.

During a shift in a long term care hospital in 1992 I had a patient who was always quite fidgety and restive during the evening hours.  When I arrived at work that particular night, with an agency nurse on duty instead of the usual nurse I worked with, I commented on how Mr. X. seemed to be sleeping soundly.

"Better living through chemistry, I always say," remarked the nurse.  I reported the nurse, and the next night the patient was his usual self.  But the event left me watchful around patients who were frequently difficult to deal with.

Current nursing doctrine suggests that restraints are for the benefit of the patient, not for the benefit of the nurses.  It is for that reason that restraints of any kind, whether physical or chemical, must be employed only after other measures fail, and only on the order of a physician.  Chemically restraining a patient of any kind for the convenience of the nursing staff is outlawed by federal and state regulations in every jurisdiction.

Still, incredibly, it continues to happen.

That's what makes what happened in a California nursing home so shocking.  Prosecutors contend that when residents at the Kern Valley Nursing Home complained or annoyed Gwen Hughes, the Director of Nursing at the facility, Hughes dealt with them through chemistry.  According to prosecutors she chemically restrained patients with powerful anti-psychotic drugs; three of her patients died as a result.

Media reports suggest that Hughes ordered a patient drugged just for glaring at her, and she administered chemical comeuppance to another for throwing a carton of milk. Residents suffered dehydration, malnutrition, and ultimately, death as a result of being so badly restrained that they had no will.  Prosecutors contend that in a couple cases, residents were physically held down, restrained against their will, and given excessive amounts of medicine to keep them quiet.

All of this would be bad, and possibly even survivable for the nursing home, were it not for the fact that Hughes had reportedly been fired from another nursing home for exactly the same behavior.  Hughes and two confederates are on trial now on felony elder abuse charges.  One of those confederates is the staff physician who apparently ordered the anti-psychotic medications for Hughes' patients without evaluating their approprirateness.

What set of circumstances leads a nursing home to the place where its DON and its medical director conspire to chemically induce coma in patients they label as disruptive?  Experience suggests several factors play a role.  The most notable of these is the ever-present "budget" and the need to keep payroll hours to a minimum.  While reducing staff is a sound business practice to the extent patient care is not affected, sometimes reducing staff leads otherwise good people to do things they would never do otherwise.

In 1971 psychologists at Stanford University conducted the Stanford Prison Experiment.  Although originally set up to run for two weeks, the experiment shut down after only six day when problems with the experiment - and what turned out to be the chief finding of the experiment - caused significant psychological damage to the volunteers.

The Stanford experience randomized men between the ages of 18 to 25 into two groups: guards and prisoners.  The guards were given rules within which they were required to operate, and the experiment took off with prisoners being stripped, isolated, and held in captivity.

Even though everyone in the study apparently recognized they could leave the study at any time, the conditions of confinement and the actions of the guards led to feelings of hopelessness among the "prisoners," while the guards morphed into people who used and abused their own power for their own benefit.  The findings of the experiment seem to confirm that absolute power corrupts absolutely, because at least with respect to the experiment's leaders, they became as corrupt as their guards during the administration of the project.

When you create a situation where nurses have more patients than they can deal with, and have insufficient resources, you create a danger.  When you reduce oversight by cutting staff, and employ managers who care more about financial matters and payroll than about patient care, you create a situation where abuses are bound to occur.  Nurses who would not normally overmedicate patients do so for their comfort in order to meet the demands of their job and their desire to avoid the conflicts that arise from having too many patients.  As has happened in the Hughes case, the results are often tragic, even though many of the guilty parties are doing no more than trying to make their eight hour shift more manageable.

Supervisory nurses and administrators should remain vigilant for changes in patterns of behavior.  If drug use and chemical restraint is suspected, a quick and thorough investigation should be initiated.  The failure to do so might result in sanctions by the state, and possibly a punitive damages award in state  or federal court.

Every now and again a case comes along where justice really does triumph in the end.  One such case involves the prosecution by the federal government of Arlan and Linda Kaufman of Wichita, Kansas who were convicted in 2006 in federal court for crimes arising out of their operation of a group home.

According to the Tenth United States Court of Appeals, in November 1999, Butler County, Kansas, deputy sheriffs observed two men working in the nude on a farm outside the town of Newton. As the deputies approached, the defendant, Arlan Kaufman, a doctor of social work who owned the farm and was fully clothed, directed the two workers into a nearby van, where they put on their clothes. Dr. Kaufman explained that the workers were residents of the Kaufman House Residential Care Treatment Center (the Kaufman House), an unlicensed group home for the mentally ill that he owned and operated with his wife, the defendant Linda Kaufman, a licensed nurse.

The deputies' discovery led to an extended investigation of the Kaufman House by county, state, and federal authorities. They learned that, over a period of more than fifteen years, the Kaufmans had directed the severely mentally ill residents of the Kaufman House to perform sexually explicit acts and farm labor in the nude while maintaining that these acts constituted legitimate psychotherapy for the residents' mental illnesses. Moreover, the Kaufmans billed Medicare and the residents' families for the therapy. Some of the patients had a stun gun applied to their genitalia.  

Like most defendants after a conviction, the Kaufmans appealed their convictions (but not their sentences) because they claimed their right to confront the witnesses was violated).  The government appealed Mrs. Kaufman's sentence.  Arlan, the social worker, got 30 years from the trial judge while Linda Kaufman got only 7 years.  The Tenth Circuit Court of Appeals upheld the convictions, finding that the Kaufman's could not show any prejudice from the trial court's various orders and agreed with the government that Mrs. Kaufman's sentence was too lenient.  In remanding for a new sentence the Tenth Circuit said that Mrs. Kaufman's sentence was "procedurally unreasonable."  The court concluded this because the "record contains evidence supporting the "dangerous weapon" and "large number of vulnerable victims" enhancements.  Under federal sentencing guidelines, the judge could enhance the sentence for Mrs. Kaufman for this reason. The district court judge sentenced Linda Kaufman to 15 years on remand.

Tanya Treadway prosecuted the case for the US Government.  A smart, tough, no-nonsense prosecutor, her aim was to send a message on behalf of the vulnerable victims in the case.  So it is a bit ironic that one of the family members of Linda Kaufman told the Associated Press that adding eight years to the seven year sentence served no legitimate purpose.

To be fair, the adult children of the convicted criminals naturally don't want to visit their mom and dad in prison on holidays, and likely did feel there was some unfairness in the judge getting a second chance to impose additional time.  But there was a key fact that the judge overlooked on the original sentencing.  The stun gun used by Kaufman was in fact a "deadly weapon" and the victims were especially vulnerable. This gave the court ample room to ramp up the sentence to fit the crime.

In Kansas it would seem that the judiciary is sending a message to those who would turn their duty of watching and protecting the very young, the mentally challenged, and the very old into their own perverted playground.  That message is, prepare to give up your freedom for the remainder of your natural life.  Kaufman was 63 in 2006 and the additional time will mean that she won't get out of federal prison until she is 78 years old, and a vulnerable elder herself.  Sometimes legal justice can also be poetic justice.

In bankruptcy law there's good, bad and ugly. So few people understand bankruptcy and how it affects people who never take that option, that a quick refresher here on what the law does is important.

Bankruptcy forgives the debts of a debtor and can be taken every 7 to 10 years if you don't get the message the first time. There are several kinds of bankruptcy. Chapter 7 bankruptcy means you lose all your property not specifically exempt under state law, and you get an absolutely clean slate. Chapter 11 (normally reserved for businesses) permits you to reorganize (or refinance) your debts. Chapter 13 requires you to enter into a program of 3 to 5 years duration where the federal court takes a percentage of your paycheck and pays of your debts for pennies on the dollar. For the cost of going to credit counseling and whatever the lawyer charges you can be free of all your debts, and all those harassing phone calls, in about 45 to 60 days.

Bankruptcy doesn't work on some things. Student loans, for example, can't be ditched in bankruptcy. Neither can punitive damages imposed because of intentional conduct. But almost everything else can be. So much for the good.

The bad news is that bankruptcy scars your credit for ten years, and may affect your ability to get a security clearance or in some cases a better job.

Now the ugly. You can be completely innocent of any wrongdoing, and a bankruptcy court can, in effect, ruin your life. Consider people who put down refundable deposits of $150,000 into "retirement communities" to obtain a retirement apartment, and who have paid their $5,000 rent every month without fail for the last ten years. Those folks have done nothing wrong. But if they put down that deposit with a company that later takes bankruptcy, they are in most cases going to lose that deposit. They may see their rent, previously locked in at $5,000, double or sometimes triple when a new company buys the old company, but as they are permitted to do in bankrupty, refuses to accept responsibility for the old company's debts. Erickson Retirement Communities, a public company that  manages more than a dozen retirement communities recently declared bankruptcy. Similarly, Sunrise Senior Living Inc. lost $82 million last year and recently said it would sell some of its assisted-living centers. Given the state of the economy, it is a pretty good bet that additional failures loom on the horizon.

Those in the elder care industry need to be careful when dealing with these kinds of entities because there are lots of dangers in dealing with insolvent companies. If a debtor under either Chapter 7 or Chapter 11 pays off someone in the 90 days prior to a bankruptcy filing, in most cases the bankruptcy trustee can reclaim that money through a process known as the "avoidable preference." Thus even after you've received a check from someone, deposited it, and forgotten about it, the bankruptcy court can still come get the money. If the debtor pays a family member, for example, the $1,000 owed for an interest in season tickets, the bankruptcy court can get the money back up to a year later under what is called the rule of fraudulent transfers. Any payment to a relative in the 1 year period is thought to be void for fraud because the debtor prefers to pay his debts to his family first, rather than equitably to all creditors.

If a company you're dealing with takes bankruptcy, don't call and hound them for payment. Under the doctrine of the "automatic stay" the debtor is protected from lawsuits and from any act on the part of a creditor to collect money.  Commercial creditors who violate the rule can be sanctioned.

For the individual debtor bankruptcy is often not the best option. But for the innocent dealing with companies who take bankruptcy, the bankruptcy can be devastating. If you believe you have issues you should see an attorney immediately.

As caregivers, nursing home personnel have an obligation to exercise some protective oversight and supervision over their patients. While most nursing home patients do not have access to their own banking or financial records, and cannot send money or charge items, for the few that do it is imperative that facilities be on the lookout for common scams oriented to elders.

Recently my former mother-in-law received a call from someone who said "this is your grandson. I'm in New York and the police have me. I need you to wire me some bail money."

Note the cleverness in this approach. Rather than identify himself by name ("this is Billy...") the caller identified himself by title (grandson). So when Johanna responded to the phone call with "Geoff, this doesn't sound like you," the caller had additional information to use. He said "I've been in an accident grandma, and I have a cold.  That's why I sound different." 

Fortunately the scammer was dealing with someone who had all their faculties. She asked if the caller had talked to his mom or dad. She then told him that she wouldn't do anything unless mom or dad couldn't help him out.  The caller vented a few expletives and hung up.

When Johanna called me she was very upset. She very much loves all her grandchildren, and the idea that one would be in a jail in New York distressed her. She called me, and I got immediately to the bottom of things. I located her grandson, verified that he was fine, and called her back and told her not to worry, but if the caller called back, to forward his call to me. I then called the FBI.

The FBI didn't even bother to investigate. First, they were thrilled that for once the professional con men didn't make a score. Thus, although a crime was attempted, none was committed, and they do not frequently prosecute these matters. The FBI called the scam "a common one.' Frequently these scammers, working from lists of elders compiled through the internet, get thousands of dollars wired to offshore accounts, or charge thousands using credit card numbers.  According to FBI Agent Johsnon in the St. Louis FBI office, the scammers operate from tiny Caribbean islands and employ throw-away cell phones. Once they successfully get an elder to commit to sending them money, they smash and dispose of the cell phone. Even if the FBI could locate the scammers, many of the islands have less favorable extradition laws, and trial under the laws of any of the Dutch-held islands would likely be farcical, given the way the arrest and prosecution of the Natalie Holloway's confessed killer was handled by Dutch authorities.

The key thing to be alert to is calls that cause emotional distress in the elderly and have one or more of these characteristics:

1. Calls from area codes that are not located in the US.

2. Calls that ask for bank account information.

3. Calls that request credit card information.

4. Calls that request money be sent by PayPal.

5. Calls that request that the elder send money immediately.

Sometimes elders will receive mail that requests that they return phone calls to numbers outside the US. The FCC has warned consumers that these phone calls can generate high charges. 

If an elder under your care is approached by someone engaging in these kinds of frauds, the FBI or your state attorney general will likely have jurisdiction to investigate. Reporting these frauds to authorities helps the federal and state agencies work with foreign governments to stop them.

Decisions to terminate employees (whether those are described as firings, terminations, layoffs or the more politically-correct "downsizing") are never fun. They're hard on employees, and they're very hard on managers who may be assuming more duties as a result of losing staff.

When termination decisions are made, they are often made on bases that have little to do with job performance, for example, seniority. The newly-hired aide with a great attitude may be terminated instead of the fifteen-year employee who's not a stellar performer. However, in most states, you can terminate an employee for any reason or for no reason, as long as you don't terminate them for an improper reason. Improper reasons include decisions based on age, sex, race, religion, pregnancy and public policy.  So as long as a termination has a legitimate business reason, in most cases it will not be subject to sanction by a court.

Under U.S. federal employment law an employee has a right to bring a claim of discrimination to the federal courts if he or she is (1) a member of a protected class; and (2) suffers an adverse employment decision. 

Because everyone is a member of an identifiable race and sex, and many are members of an identifiable religion, satisfying the first obstacle is easy. A termination clearly satisfies the second obstacle. So, even though almost everyone could sue for wrongful termination, the vast majority do not. This is due to several reasons. The first reason is that in most cases employers handle the termination with tact and offer outplacement assistance and a good reference. The second reason is that most lawyers don't take an employment case unless there is credible evidence of discrimination in the form of "pretext." Pretext, simply stated, means that the reasons given for the termination don't turn out to be the real reasons.

For this reason I offer the following suggestions about what to do when terminating employees:

1.      Make it a Short Story, not a Novel.

A termination interview should be planned, not spontaneous. Have a checklist. Work through the checklist, end the interview, and move the former employee along. There are only a few things to tell an employee when they are terminated.  (1) Your last day of work is (or was) ___."  (2)  Your employment is terminated.  You are not subject to rehire.  (3)  You have COBRA benefits - here is a package of information about those benefits.  (4)  Have a nice life somewhere else.

Don't get into "the whys." You can fire an employee for any reason or no reason. If you have multiple reasons and don't list them all, the employee can claim pretext. The easiest thing to do is say "the decision has been made, it is not subject to review, and that's all I can tell you at this point." 

At this point, depending on the employee, you'll either get anger or tears. Both are understandable, and neither are appropriate for a response. Give the employee a moment to be angry or cry. If you have an angry employee, it is a good thing to have security available to escort them off premises.

The more that is said at such an exit interview, the more that can be used against you. The less you talk, the better it is. So remember: if you have to take a breath while telling an employee they're fired, you're talking too much.

2.      Crisp is not Heartless

I can hear you out there now:  "that's heartless!  People deserve to know the reason they were let go!" Actually, that's just not true. Volunteering a reason is never a good idea. And when a manager does so, it usually is to make the manager, not the employee, feel better.   

Everyone wants to be loved, but managers do not have that luxury. You have a job to do. You do the job crisply and efficiently, and in the end you will always be better off. It is much harder to defend an organization that puts its reasons and rationales in front of the employee, because it gives the employee room to argue, and that makes the manager feel like they have to respond.   Say one thing related to age, sex, race or religion, and you create a lawsuit where none existed.  Instead, be crisp. It is appropriate to say "good luck in your future endeavors," it is not appropriate to say "I'm sorry." An apology is required when someone has made a mistake or an error. If a termination is justified, there's no need for an apology.

Managers often want to cushion the blow. They want to go easy on an employee at a difficult time. They say things like "you're a great person, you'll do fine." Worse, they say things like "this wasn't about your performance, we were just cutting fat."  All of these things are admissions. If you tell an employee "this is not about your performance" in the exit interview, and then discovery reveals that she was fired for her poor work performance, it begins to look like at least one of those statements was a lie.  If you limit what you say, you limit liability exposure. 

It is also worthwhile to consider that there is really nothing you can do to ease the blow of losing a job. Being fired is being fired. There's just no way to sugar-coat that. Instead of worrying about the employee's pain, worry about your own. The last thing you want to do is being explaining in a lawsuit what you meant when you said you were "cutting fat" and your former employee is a 50 year old 260 pound employee who can cry on command. In terminations the KISS method (keep it short and simple) is the best way.

3.      Two is a lawsuit, Three's a Defense

In almost every instance when terminating an employee, stack the odds in your favor. Have a witness. Have the witness take notes. Have those notes marked "Notes Prepared in Anticipation of Litigation" at the top, and have them forwarded to corporate counsel upon completion of the interview. Make sure you will always have a record of what you did and (more importantly) what you did not say. Marking the notes as work product makes them almost impossible for the employee to gain access to them in discovery.

But choose your witness well. Don't use a secretary or other hourly worker who might be later subject to a layoff, or someone whose loyalty to the organization is suspect. The best person to have in attendance is a person from Human Resources, assuming the organization is large enough to have an HR staff. Also keep in mind that you need someone who won't later talk about the exit interview with others. In other words, choose carefully.

4.      No Manager Ever Documented Too Much

If performance is truly the reason for termination, it is better to have too much performance information in the file than too little. And that means that the documentation should be historical and accurate. If an employee has gold-star evaluations for sixteen years, and suddenly has two infractions followed by termination, the argument for pretext is much stronger. 

Follow the policy explicitly on terminations, even if it means keeping an employee longer than you'd like. Set reasonable deadlines, hold people accountable, and don't let managers be forgiving. Sometimes an employee will screw up in January, and by July, when evaluations are due, the supervisor has forgotten all about it. Hold supervisors accountable to include in their evaluations those incidents where an employee has gotten into trouble. The most indefensible part of a discrimination case is where an employee can show years of great evalutions followed by a short course (six weeks) of harassment from a new supervisor. Juries do not like employers who are not fair.

5.      To Fire is Human, To Make Them Leave, Divine

In most cases if you hold an employee accountable strictly for their performance, and you let them know they are under the gun, even the most long-term employee will leave the organization. When an employee who has been a disciplinary issue leaves, make sure to document the exit interview.  At that interview you accept their resignation and wish them good luck. You also document that the resignation was not requested, and that the employee left voluntarily.  Always get resignations in writing. Always confirm them with a very simple letter: 

"Dear Martha:

You have indicated that you are resigning on April 4, 2009. You have submitted your voluntary resignation effective that date, and the organization accepts your resignation. You were not asked to resign, and your employment record will reflect that leaving was your decision."

Although an employee can claim "constructive termination" it is a much more difficult for them to win these cases.

6.      Severance and Release is Better than Severance

Severance, the payment of a month or two of salary to a departing managerial level employee, is always a good bet for an organization if it is accompanied by, and conditioned upon a release of all claims. Almost any good law firm can draw up a release that extinguishes the rights of the employee in litigation.  The release should extinguish the employees rights to sue in state and federal court for all the possible causes of action. While a release won't affect an employee's right to bring a False Claims Act case (in most cases), it will extinguish their right to sue for discrimination. Most employees trade a small amount of real money obtained real quickly for a large amount of money that might come in a later lawsuit, if the situation arises. This is particularly true in a down economy.

One thing soldiers with recent combat experience say is that frequently it's the non-combatants who suffer the worst in battle. This is something like the observation my daughter, a pediatrician, makes about working in the ER:  it's the innocent bystanders that are always hurt the worst.

The same is true when end-of-life issues clash with expectancies arising from a parent's wealth. Issues usually arise in one of several ways:  either (1) a family member believes that another person, acting under a durable power of attorney, is looting the estate of the elder; (2) the family members bicker over how care should be provided but no one has the power to made decisions;  or (3) one family member or another decides that their parent needs a guardian or conservator, often fearing that without such action the estate will be looted by others.  In these cases it is often hard to tell who the good guys really are.

A guardianship is a court-ordered takeover of a person's right to make decisions about their life and health. A guardian has a ward. The guardian can confine that ward in a nursing home, make decisions about what care is to be provided and what care is to be withheld, and if they also have the power of the conservator, they can say how the ward's money is to be spent. These are awesome powers and the guardian can become, and in some cases actually does become the ward's jailer.

In most states a guardianship is declared only where a person is not competent to make their own decisions.  Usually medical testimony is used to determine competence, although sometimes a protectee may simply be examined by the Court. Where the Court feels that the protectee cannot function so as to protect himself or herself, the Court appoints a guardian (to manage the health care and living decisions) and a conservator to look after the finances.

As health care providers its normal to have opinions about whether a client is competent to manage his or her affairs. It is never a good idea, however, to share those opinions with family members because sometimes this results in being called by one side or another to testify about a person's competence. And worse, it is often difficult to determine if a person acting under a guardianship actually intends to help or harm the elder.

Consider the case from the Dallas area where local media jumped on a local court and health care providers after a former producer form the television station was "incarcerated" in a nursing home. Although the use of the synonym for jailed indicates some strong feelings on the part of the media, it also indicates that nursing homes are perceived to be in some cases worse than jails.  In that case after the ward called his former employers and begged for help, new lawyers and new doctors were called in to undo the guardianship.

The danger for the nursing home is in siding with one party or another in a guardianship proceeding. If a family member obtains guardianship and thereafter loots the estate or makes decisions contrary to the best interests of the ward, the nursing home may have a duty to report this to the Court. If the guardian is later alleged to have been working in sync with the nursing home staff, liability for any financial losses might be shared by the nursing facility.

As a general rule the smartest approach is to stay out of the line of fire in a guardianship where multiple parties think they know what is best.  Until the matter is decided by the courts, the nursing home may have trouble complying with multiple requests by multiple parties, and may want to consider asking the Court for the appointment of a temporary guardian (often called a public administrator) so that care issues can be properly managed while the family fights out the guardianship battle.  Having an interim source for the resolution of conflicts about care can help keep caregivers from becoming collateral damage in a family war.

Nearly every nursing home has labor problems related to getting and keeping good staff members. Good help is exceptionally hard to find. Good-hearted nurses and aides, who are willing to work long hours under difficult conditions are often hard to find.  Too many employees means the bottom line of the facility suffers. Too few and sanctions and state citations can result.  Sometimes the line between the two is very thin.

Over the past few years some owner-operators have tried a different solution to their staffing problems. Registered nurses brought over from the Philippines have an exceptional work ethic and most speak English (English is the official language of the Philippines even though Tagalog is the language most often spoken). Most of these nurses can get visas, and most can quickly obtain licensure. For that reason some facilities have entered into recruiting agreements with services in the Philippines to supply them with nurses.

The problem with such an international arrangement is that you often don't know who you're working with on the other end of an international telephone call. You have little, if any, control over what is being told to the recruited nurses, and what promises are being made. The facility may ultimately become responsible for the promises that are made during recruitment.

Two recent criminal prosecutions - one successful and one not - show the dangers of getting help from overseas. One case, known now as the Sentosa case, has been the focus of a lot of media scrutiny.

In the Sentosa case, originating out of New York, nurses from the Philippines were recruited with promises that they would have apartments living with a roommate. In fact the nurses were put six to eight in a 3 bedroom house. Nurses were told they would have normal work hours, but were actually required to work hours greatly in excess of what was promised. The nurses resisted these conditions and, because they were foreigners, were threatened with prosecution if they violated US law.

The nurses retained an attorney who advised them that they could not be prosecuted for breaching an employment contract.  The nurses made sure to give adequate notice, breached their contracts, and then the nurses and their lawyer were arrested for conspiracy to jeopardize the care of elderly persons and patient abandonment. The facility hoped to pressure the nurses into returning, but instead the nurses filed an action against the facility for breach of contract under US law.  The facility fired back by asking the New York Board of Nursing to get involved.

It did, and it exonerated the nurses. Then, after the nurses were cleared by the Nursing Board, the New York Court of Appeals, relying on the 13^th Amendment (the statute that bans slavery), held that the nurses could not be prosecuted for the legal act of quitting their employment. Just this last week a number of those nurses prevailed in a legal action in the Philippines related to the promises that were made to them during recruitment. The nurses have now initiated legal action against the prosecutor.  A lawsuit against the nursing home can't be far behind.

Then on Monday, October 19, 2009, a nursing home owner in Long Beach, California was sentenced to five years in federal prison on felony charges of forced labor and other unlawful conduct. When the owner was arrested in April of 2008, the FBI said that the victims - nurses recruited from the Philippines - were forced to work nearly 24 hours a day and were advised they would have to work for several years while they repaid their travel debts. The nursing home owner allegedly threatened victims by promising to falsely accuse them of crimes should they try to leave, and threatened to contact police and immigration officials, whom she said would deport the victims. She allegedly held the victims' passports and verbally abused them. Worse, she also instructed the victims to lie about the amount of hours they worked when questioned by officials with the Department of Social Services, who monitor the homes for the elderly. Clearly the conduct in this case is significantly outside what any legitimate home would do.

These cases illustrate how badly international recruitment efforts can fail, and how expensive they can become when they do. The best way to solve labor problems is to screen applicants carefully and hire qualified people. With millions out of work in a depressed economy, there are people who want to work in this country.  The trick is finding them.

In the nursing home setting most admission agreements have standard language that disclaims any intent on the part of the facility to be a "bailee" of goods. This language is important, but can be circumvented by individual employees if they act on their own for the benefit of patients.

Consider Mrs. Jones who has a big fluffy quilt on her bed that is a family heirloom. Mrs. Jones family rarely visits, and a nurse takes it upon herself to wash the quilt for her.  In the washing process, the quilt is damaged. The employee became a "bailee" because she was given a "chattel" or piece of property to care for. She had a duty of care and duty to return the goods. Her failure to be careful washing the quilt could make her liable for the damage. While the facility might still claim that it was not a bailee of the goods, it could probably not escape liability for negligent supervisor or vicarious liability.

There is another very critical reason that no employee of a skilled nursing facility should ever accept property from any resident for any reason -- even a benign one like washing a blanket - and that reason is found in the criminal law.  Nothing prevents a resident from claiming that the goods were stolen when they fail to remember entrusting a worker to take care of the goods. Family members who were not present when the resident entrusted the goods may believe that the item was stolen. Why would they believe this?

Consider the case of Micah O. Shatswell, a Missouri nursing home employee who took a painting from a Springfield, Missouri nursing home thinking it might be worth as much as $100. When he sold it online for $175,000, he was stunned that the painting was so valuable. One assumes he was equally stunned when the FBI arrested him and charged him with interstate transportation of stolen goods.

This raises the issue of whether residents should be allowed to bring high-value items with them to the skilled nursing facility. That should be permitted only where the facility has in writing an insurance agreement that covers the high-value items and indemnifies the facility against any loss for those goods in the event of theft, fire or accident.

On September 17, 2009, the Oklahoma State Supreme Court overruled a decision by the Court of Appeals involving a licensure proceeding filed against a former nurse's aide by the Department of Health.

In the proceeding, the Department of Health charged that the nurse's aide copied parts of a patient's medical record to bolster her employment discrimination claim and thereby misappropriated the patient's property by giving the information to the EEOC. The Department claimed the aide did not have permission to give photocopies to the EEOC. 

The Supreme Court in an 8 to 1 decision found that the aide did not violate the law. The decision is premised in the idea that a resident does not have a property right in their medical records, and that photocopying them and using them for evidence is not a violation of the state's property laws.

The aide at issue had been disciplined by the facility for acts of misconduct which she asserted were pretexts for acts of discrimination. She filed a complaint with the EEOC.  At some time while her complaint was pending she copied a medication report left in public view by Caucasian nurses who were not disciplined for their failure to safeguard the record.  She submitted the copy to the EEOC as evidence that blacks and whites were treated differently.

During the pendency of the discrimination case, the nursing home learned of the medication report, and terminated the aide, then reported her to the Department of Health in Oklahoma. The Department of Health sought to discipline her for misappropriation of the patient's property, not for violating HIPAA. They were going to place unfavorable information in the state's Nursing Aide Registry. This would have been the equivalent of revoking her license to practice as an aide.

The Department filed a legal pleading called a motion for summary judgment. It argued that the photocopied records were the resident's property, that the content was confidential under the Health Insurance Portability and Accountability Act of 1996 (HIPAA); that the aide took the medical information with neither any entitlement to the information nor the resident's consent and distributed it to a third party (The EEOC).  At the hearing on the motions, the Department clarified that its position was that the aide had transferred the resident's medical information to a third party. The aide responded by saying, among other things, that the state statutes and regulations governing the Registry cannot be extended to cover disclosures of patient information because such disclosures are governed by HIPPA. The court found that the aide had misappropriated property belonging to the resident, and the aide appealed. The Court of Appeals affirmed the verdict, and the aide appealed again, this time to the state Supreme Court.

In its opinion the Oklahoma Supreme Court looked at the controlling federal regulations which defined misappropriation as "the deliberate misplacement, exploitation, or wrongful, temporary or permanent use of a resident's belongings or money without the resident's consent." 42 C.F.R. § 488.301 (2003). The problem for the Department of Health was that the policies and procedures of the facility clearly stated that the medical records were the property not of the resident, but of the facility. The Court said:

Here, [the aide] may have disclosed resident medical information by divulging it to the EEOC, but she did not transfer a resident's property. The evidence is that  [the aide] took a resident's medical information and disclosed it to the EEOC, but there was no severance of the right to the information or of the information itself from the resident or from Epworth Villa. The Department's definition of misappropriation of property does not include the release or divulging of information. Thus the ALJ erred when it found that  [the aide] had misappropriated a resident's property by transferring information to the EEOC.

In a blistering dissent Justice Joseph Watt argued that the photocopying was a violation of the patient's rights.  The Supreme Court did not decide the case based on a violation of HIPAA, however. Instead, it was limited to reviewing the case based on what the Department of Health had charged, specifically, misappropriation of property. By making the wrong disciplinary charge, the Department of Health lost the case.

This does not mean that employees can take any medical record they find and copy it for their own use. It is a very narrow case under Oklahoma law. Had this case been in a federal court and had it been brought by or on behalf of the patient, the result may have been significantly different.

There is a difference between a novel and a news story in a newspaper, even though both are printed on paper. Similarly, there is a difference between a legal drama like Law and Order, and what actually happens in the nation's criminal courts.  The fact is that those who practice in the criminal and civil justice systems know that these dramas badly depict the actual legal process.

In the early 1900s several daily newspapers battled for circulation in the New York City area.  Several used sensational news - where accounts were not objectively reported and lurid details of the events were sensationalized - to boost sales of their papers. This led to the newspaper reporters being called "yellow journalists" by their peers and critics because the job of the news media is to report the news, not serve it up as entertainment. Even today some New York newspapers serve up a daily dose of sensationalized news and lead with scandal whenever possible.

Television news is not immune to this phenomenon, and the buzzword around many a television news station is "if it bleeds, it leads." Because television is funded by advertising, and advertising depends on ratings, yellow journalism is a far greater threat in the electronic media than in the print media.

CNN, Fox News, and similar 24 hour cable news shows have, however, taken yellow journalism to a new height. They have elevated it to an art form. Instead of merely reporting the gory details of crime and punishment, they instead merge what appears to be investigative reporting with a focus on entertainment, and in so doing are setting the stage to ensure that defendants in criminal cases get much more than their 15 minutes of fame. For many this is a validation of their work.  Think Ted Kaczynski. For others, it could be a literal death sentence since the media so poisons the jury pool that a fair trial anywhere is likely impossible. It frequently takes 18 months to bring a case to trial.  Jurors everywhere watch cable news. How many are really going to be able to put facts heard on the media out of their head?

When did murder begin to entertain us as a culture? Those of us with a bias for life, and who've spent our lives trying to save lives, find this strange. How did the murder of a child and the anger we feel over that crime morph into a nightly "hang-em high" roundtable? Are we really that empty in our personal lives that we have to feed off the pain of others?

Consider the handling of the Casey Anthony case by CNN pundit Nancy Grace. Grace, a lawyer and former prosecutor should know better, and it's appalling that a lawyer would knowingly lend her status as an officer of the court to an enterprise that, while not necessarily designed to destroy the right of an accused to a fair trial, certainly is capable of achieving it.

To be sure the Casey Anthony case is certainly sensational.  What appears to be a rather narcissistic young mother, Casey, is accused of murdering her child, Caylee Marie, and hiding the body in a trash bag.  Importantly, while there is likely some physical evidence that the prosecutor has not disclosed, there are no witnesses, no smoking guns, and no direct evidence of the accused's guilt in that case. Yet, even on COPS, the Fox Entertainment Division's pseudo-reality series aimed and following real cops on real calls, the program begins with the advisory that "all suspects are considered innocent until proved guilty in a court of law."  Grace never reminds her listeners of this.  One assumes because, at least in Grace's mind, that matter is already settled.

Grace has all the charm of a spitting cobra as she "debates" with guests on her show.  Say something Nancy disagrees with and the venom and vitriol comes spewing out.  Whenever someone tries to suggest that an arrested suspect might actually be factually innocent, Grace nearly comes unglued.  Being a "guest" or panelist on Nancy Grace is an invitation to be abused.  And yet, somehow Grace, who built her reputation on her book Objection, which tries to lay the blame for defense verdicts in criminal trials at the feet of defense attorneys and the media, is the foremost member of the media at fault if a verdict gets overturned on the basis of pretrial publicity.  In some respects, Nancy Grace is a defense attorney's best friend on appeal.  But this is not the worst aspect of the show from a legal perspective, however.  It's the disregard for the legal process inside the courtroom.

In a court room, juries are not permitted to speculate. They are asked to decide the case on the basis of the evidence presented. This is designed to ensure that the jury bases its decision on relevant facts, and not on irrelevant facts.  For example, unless a defendant takes the stand in her own defense, the state cannot bring up the fact of any prior convictions, even if those convictions were for the same crime. So the fact that a bank robbery suspect may have twice robbed banks in the past is not admissible in the current bank robbery trial because a jury might speculate that once a person was once a bank robber, they were always a bank robber. Similarly, witnesses cannot speculate about why a person might have taken a particular action. If they know, they can tell.  But asking a witness to speculate - even an expert witness - violates the rules of evidence. 

Grace knows all this, of course, because she was a former prosecutor. But she routinely asks these "why" questions on her show, and even on her website where today's "headline" suggests a "major twist" in one of the cases the show has been covering. The teaser tells the viewers: "Does a letter from a jailed friend ... break the ... case wide open, outlining details of an alleged drug-fueled party the crucial night the little girl vanished? Nancy Grace has the latest breaking developments."

Now, often the viewing public never sees the alleged letter, and instead hears from "informed sources close to the investigation who requested anonymity." The contents of the letter are not disclosed, only the salacious information necessary to get the viewer at home to watch. Grace frequently reminds us to watch because we don't want to make her mad.  "Don't make me issue a warrant," she tells her viewers.  In spite of, or perhaps because of this peel-the-paint-off-a-battleship pugilistic style of interviewing, Grace is a ratings sensation for CNN.

Lawyers subscribe to an ethical creed that requires them to respect the right of any person to a fair trial. In fact, the Missouri Rule states "A lawyer who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial [out-of-court] statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter."

The prosecutor, then, can't go on television and talk about the case, and neither can the defense attorney, because they are bound by a rule that requires them to respect the rights of the accused. Every lawyer understands this rule.  Nancy Grace certainly understands it. And yet, while she is not within the explicit scope of the rule because she is a media person, she should certainly be within the spirit of it. Yet, Grace continues, night after night, to poison the pool of prospective jurors in criminal cases around the country with unfair speculation and innuendo because it makes for good ratings (Grace has the best ratings on Cable for her time slot, according to her page on CNN).  It also makes for great spin-offs.  Grace is preceded by Jane Velez-Mitchell who frequently teases Grace's lead stories, and frequently conducts the same "panel interviews" featuring lawyers and other experts. Mitchell, however, lacks the caustic attitude of Grace, and although probably not intentionally, comes across as perhaps a bit more fair in her questions.

Night after night cable news features the likes of Grace and Fox's Greta Van Susteren (also a lawyer) spin a think mix of invective and speculation about criminal cases with guests and even other lawyers calling suspects names like "scumbag" and "dirtbag." It isn't objective reporting of facts; it is nothing more than sensationalism of the social depravity inherent in all crime. As a nation we should clearly separate entertainment (Law and Order) from news (Nancy Grace).  That we don't speaks volumes about how media executives feel about the average viewer, and how captive television news is to ratings.

The patient's oxygen saturation on the pulse oximeter showed a dangerously low value. Narcan was administered.  Intubation equipment was readied. The patient was groggy, but did not appear to be in significant respiratory distress.  Another oximeter was obtained that showed a much better oxygen saturation value. The Rapid Response was called off, and the manufacturer of the medical device got a telephone call from a biomedical technician who was not happy.

Understandably the hospital personnel believed they had a bad pulse oximeter. They demanded that the unit be replaced. The manufacturer sent out a technical representative instead. He asked to see the sensor that was on the patient. Within a few moments he isolated the problem:  the sensor - originally manufactured by the oximeter maker - was defective.

The BMET read the technical representative the riot act, until the technical representative pointed out that the sensor was not as it had come from the factory. It was, instead, a remanufactured or reprocessed sensor that had been supplied by a vendor that buys used sensors, replaces the adhesives, and returns the sensors to the hospital. While the clinicians believed they were using a new sensor made by the original product manufacturer, the purchasing department had a dirty little secret:  it was cutting costs by re-using old equipment. This is a very common method of reducing costs.

Equipment reprocessors take what they call semi-critical and non-critical medical devices and resterilize them. This includes DVT compression garments, pulse oximeter probes, blood pressure cufs, infuser bags, cervical collars and splints.  One prominent provider claims it uses High Level Disinfection procedures and Pasteurizes the equipment. It then affixes new adhesives and wraps the now-disinfected equipment for transport back to the facility. The cost for the service is usually less than the cost of a new probe, split, infuser bag, or DVT compression garment.

No responsible nurse would put Mr. Smith's barely used band-aid on Mr. Jones. No responsible nurse would take crumpled tissues from the trash bin, iron them, and stuff them back in a box for use. Yet every day across the country people take single-use patient items and in spite of clear warnings to the contrary either re-use them or send them to a reprocessor. They do this because there is a cost savings, and certainly over the short term that savings is real and measurable. But who is to blame when a medical error arises? And who shares the liability for using what amounts to hand-me-down medical goods?

Surely if the patient is harmed by a defective medical device - one that alarms when it should not, or fails to alarm when it should, the manufacturer might well have liability. But if a component of that monitoring system is something other than the original equipment manufactured by the medical device maker, liability may default to the facility using the equipment, or to the reprocessor. This because the manufacturer will be able to show the disclaimers that indicate it is not responsible for the results when used with anything other than original equipment.

In the situation where the reprocessor is actually the original product manufacturer this does not present a significant issue. If the manufacturer sells reprocessed devices, it also warrants them. The problem arises when Company A reprocesses Company B's sensor, but doesn't disclose that the sensor is reprocessed. Because the reprocessed sensor bears the name of original manufacturer, the original manufacturer often gets the blame. But it's the facility that is in for a surprise if there is a medical meltdown.

This because many reprocessors are small operations and do not have sufficient product liability insurance to cover their liability in the event that a defective sensor causes injury to a child or other patient. 

The far better approach, even though more expensive, is to use original equipment. If a facility uses original equipment it has only one source to turn to if the product fails. If a reprocessor is used, the facility should investigate the company and make sure that it has sufficient insurance. A smart facility would even require the vendor to include the facility as an additional insured, and would require the reprocessor to "indemnify and hold harmless" the facility in the event of product failure.

Its easy to think of saving money in the short term. But a facility can be pennywise and pound foolish if it uses reprocessed goods that do not meet the original equipment manufacturers specifications, and those goods cause patient injury.

Lawyers operate in a funny world. On one side of the law legislative governments write statutes.  On the other side of things, courts issue decisions and catalog them.  As a result, knowing the law means both knowing what the statutes say and what the decisions say and mean.  Sometimes "commentators" - a fancy term for law professors with nothing better to do - compile "restatements" of the law based on principles discerned from the cases.  One of the more famous restatements is the Restatement of Torts.

One of the many things you'd find in the Third Restatement is the doctrine of Negligent Entrustment.  Negligent Entrustment was designed to remedy the situation where a person places a dangerous instrument into the hands of another, and a third person is injured by reason of negligence.

Normally this arises in the context of a case involving automobile use.  A parent may permit their 15 year old unlicensed child to drive to the local Sonic to bring back supper, even though he knows that  the child has no driver's license.  He is "entrusting" his car to the child even though he knows that the child has not demonstrated competence with a vehicle by obtaining a license.  If the child runs over someone on the way to the Sonic, the parent who entrusted the car may be liable under the doctrine of negligent entrustment.  The cases speak about the three parties as the entrustee (the child in the example above), the entrustor (the parent), and the plaintiff.

In order to win a negligent entrustment case, the plaintiff must prove (1) the entrustee is incompetent by reason of age, inexperience, habitual recklessness, or otherwise; (2) the entrustor knew or had reason to know of the entrustee's incompetence; (3) there was an entrustment of the instrument that harmed the plaintiff; and (4) the negligence of the entrustor concurred with the conduct of the entrustee as a cause of the harm to the plaintiff.   Negligent entrustment cases involving power tools and firearms are also common.

Sometimes legal theories get applied in ways that don't fit nicely into one doctrine or another.  Under the law, a person is responsible for the negligence of another if they employ, supervise or direct that person.  This is called vicarious liability.   Under most circumstances absent some kind of employment or supervisory relationship, a party is not liable for the negligence of a truly independent contractor.  Thus, in most circumstances, a nursing home would not be liable if a patient was injured during an ambulance transport by a negligent ambulance driver.

However, where a relationship exists that creates a duty to protect another exists - for example, in the case of a SNF with a duty to ensure that its residents are protected for known harms - a duty arises that can create liability where the SNF places the patient into the hands of one incompetent, and known to be incompetent.  Health care entities owe a duty to their patients to protect them from harm.  This is why health care facilities have fire policies that begin with R for Rescue the patient.  When a patient is sick, or debilitated, they are often not able to protect themselves from harm.

Thus, when a SNF or a health care facility makes a choice of a particular provider, and places the patient into the hands of another provider, they have an obligation to make sure that the provider is  competent, or more accurately, to make sure that there is no indication that the provider is incompetent.

To make this clear, consider two possible scenarios.  Fast and Loose is an ambulance company known for speedy trips, but rarely employs licensed paramedics.  Everyone knows that the techs are unlicensed.   The ambulance that arrives to pick up the patient has only one gurney and no oxygen equipment.  There is no city or county license displayed on the ambulance.  A reasonable person in the position of the nursing home would know that the ambulance company is not complying with the licensure laws.  If the patient is injured because of F&L's negligence, there could be liability based on the duty to protect.

On the other hand, suppose another ambulance service, Fly By Night, has seven well-equipped coaches and crisply uniformed paramedics with shiny gold badges.  The service provides copies of its licenses to the facility upon request, but those licenses are clever forgeries.  The patient is injured when an unlicensed driver flips the ambulance.  Unless the facility had knowledge of FBN's problem before the event occurred, no liability attaches.

As another recent blog post pointed out, facilities want to reduce costs, and one way to do that is to seek bids and get lower prices for services.  One of the services frequently required is non-emergency ambulance transport.  It is very important that if you use something other than the local governmental or 911 services for patient transports, that you make sure that the service is fully licensed and insured.

Any time an ambulance service contracts with a facility, the contract should require the ambulance service to maintain all state, county and local ambulance licenses in active condition.  You should ask to see copies of the licenses, and should note when they come up for renewal.  At no time should a patient be transported in an ambulance that has not met all the requirements imposed by state and local government. 

The contract should also require that the nursing facility be covered as an "additional insured" by the ambulance service's liability policy against any claim of negligence or negligence in the entrustment of the patient to the service.  The contract should specify that the ambulance service "indemnifies and holds harmless" the service provider.  These magic words place the cost of defense for any action arising from negligent ambulance care squarely on the ambulance provider.

It is not enough, however, to simply require these contractual pieces.  The ambulance service must be checked every six months to ensure that it is still licensed and still insured.  If the service  drops its insurance carrier, even though the facility may have indemnity language in the contract, it may still have the deepest pockets and be the most likely lawsuit target if something goes wrong.  Normally when the principally-liable defendant is insolvent, that's when lawyers get creative with their allegations of negligence.

Protecting the facility from liability requires making sure that all ancillary providers, from nursing agencies to ambulance companies, meet all the requirements to do the job.