Dec. 17, 2020 – A recent state appeals court decision has rejected the “conglomerate argument” when an adult child pursues wrongful death claims leveled against assisted living facilities owned and operated by a larger health care system.

Adult children can bring wrongful death claims, on their own behalf, if a parent’s death is allegedly caused by a party’s negligence. When claims involve medical malpractice against health care providers, however, adult children have no standing.

Under Wis. Stat. section 655.007 and Czapinski v. St. Francis Hospital, Inc., 2000 WI 80, 236 Wis. 2d 316, N.W.2d 120, adult children of a deceased parent lacks standing to bring wrongful death actions for pain and suffering based on medical malpractice.

Wis. Stat. Chapter 655 established the process to purse medical malpractice claims and as well as the Injured Patients and Families Compensation Fund.

Thus, when Kim Andruss filed a wrongful death claim against an assisted living facility, alleging negligence in the death of her mother, the circuit court dismissed the case on the basis that Andruss did not have standing to bring the claim as an adult child.

That decision was based on the conclusion that the assisted living facility, owned and operated by Divine Savior Healthcare Inc., was considered a “health care provider” under Wis. Stat. Chapter 655, which governs medical malpractice claims.

The circuit court had accepted Divine Savior Healthcare’s argument that even if the assisted living facility is not considered a “health care provider” under Chapter 655, it becomes a Chapter 655 healthcare provider as part of a larger health system.

Divine Savior also owns a hospital and a nursing home, which are “health care providers” under Chapter 655. As part of this conglomerate health system, Divine Savior Healthcare had argued, the assisted living facility could not be sued by Andruss.

But in Estate of Oros v. Divine Savior Healthcare Inc., 2020AP202 (Dec. 10, 2020), a three judge panel for the District IV Court of Appeals rejected Divine Savior’s “conglomerate argument” and reversed, which allows Andruss to pursue her claim.

Under this decision, Andruss can seek damages for personal suffering as a result of her mother’s death under Wis. Stat. section 895.04. The decision also rebuffs the “conglomerate argument” when an adult child pursues wrongful death claims leveled against assisted living facilities owned and operated by a larger health care system.

Chapter 655 Health Care Providers

Divine Savior’s assisted living facility and its nursing home are located on the same campus as Divine Savior’s hospital in Portage. Hospitals are “health care providers” under Chapter 655, and nursing homes are “health care providers” if the nursing home operations “are combined as a single entity with a hospital,” regardless of location.

However, the appeals court noted that “[n]one of the health care providers listed in § 655.002)1), even when one takes into account the activities and relationships described in some categories,” includes a stand-alone community-based residential facility.

A community based residential facility (CBRF), also known as an assisted living facility, is a place “where 5 or more adults who are not related to the operator or administrator and who do not require care above intermediate level nursing care reside and receive care, treatment or services that are above the level of room and board but that include no more than 3 hours of nursing care per week per resident.”

Divine Savior argued that any facilities or divisions that it operates are considered health care providers because Divine Savior operates a hospital and those divisions and facilities, such as the assisted living facility, are not distinct legal entities.

The appeals court rejected this argument, noting the allegations relate to activities of the assisted living facility, which is not a Chapter 655 health care provider.

“Put simply, what matters to the analysis under § 655.002(1) is that the Corporation operates the CBRF and that the allegations here address Oros’s care at the CBRF; it does not matter what else the Corporation operates,” wrote Judge Brian Blanchard.

“Put differently, the exclusive Wis. Stat. § 655.002(1) list of mandatory health care providers does not include a category that consists of corporations that operate CBRFs while also operating hospitals or nursing homes,” Blanchard continued.

“Here, some of the Corporation’s operations (notably, health care services provided by the hospital to its patients) would have been subject to Chapter 655 under § 655.002(1)(h), but that does not mean that all of the Corporation’s operations were—such as care provided by the CBRF to Oros.”

The three-judge panel said Divine Savior’s “conglomerate argument” is at odds with the legislature, which defined mandatory health care providers under Chapter 655.

“We conclude that any change in this area would have to come from the legislature, not the courts,” Judge Blanchard wrote.