Salas v. Grancare, Inc. (22 P.3d 568)

elderly-man-colorado-nursing-home-abuse-200x300Articles: Colorado

Salas v. Grancare, Inc. (22 P.3d 568)

Salas v. Grancare, Inc. (22 P.3d 568)
Plaintiff (Appellee) – Salas, representing a class of nursing home residents (both deceased and living)
Defendant (Appellant) – Grancare, Inc.
Colorado Court of Appeals (2001)
Nursing home residents brought tort and breach of contract class action against nursing home for allegedly improper care. The District Court dismissed residents’ tort claims. Residents appealed.
Defendants owned, operated, and managed Cedars, a nursing home in Lakewood, CO. Plaintiffs (or their decedents) were residents of Cedars. Prior to receiving services from Cedars, each of the residents entered into separate resident admission agreements indicating that Cedars participates in the Medicare and Medicaid programs. Dissatisfied with Cedars’ services, plaintiffs filed an action claiming they had received “inadequate care and services, including: 1) medical and nursing services that are inadequate to promote the maintenance or enhancement of the quality of life of each resident; 2) care that does not currently comply with the state and federal regulations; 3) an unclean, unsanitary, and unsafe environment; 4) an overworked and underpaid staff; 5) the improper use of physical and chemical restraints; and 6) other improper care.”Following a hearing on the issue of class certification, the trial court defined one class and two subclasses. As part of its class certification order, the court found that plaintiffs seek a refund of the amounts that they paid, or that were paid on their behalf, while they were residents at Cedars and that they do not seek damages for any individual physical harm they may have suffered as a result of the alleged mistreatment.


The Defendants filed a motion to dismiss all of the plaintiffs’ claims asserting that the trial court lacked jurisdiction under the applicable state and federal statutes to hear disputes involving Medicare and Medicaid. Defendants also filed a motion for summary judgment precluding recovery of Medicaid funds.


The Trial Court dismissed the Plaintiffs’ claims because the claims arose under the Medicare and Medicaid Acts and the Plaintiffs’ failed to exhaust administrative remedies.The Court then dismissed for lack of jurisdiction the claims of all plaintiffs who were at all times Medicare or Medicaid patients and who did not contribute any of their own private funds toward their care. The court concluded that the remaining plaintiffs could seek restitution and damages for emotional distress only for the period beginning with their stay at Cedars and ending when they first received Medicare or Medicaid benefits.


Were residents required to exhaust their administrative remedies under the Medicare and Medicaid acts prior to bringing suit in court?
No. The Court found that exhaustion of administrative remedies generally involve requests for reimbursement of benefits brought by individuals seeking coverage for benefits or expenses under Medicare or Medicaid. The court differentiated the plaintiffs’ situation because they were not seeking reimbursement. Rather, they were seeking to recover monies paid by them or on their behalf.
Even had the plaintiffs’ claims arose under the Medicare or Medicaid Acts, the remedies they sought were not available under the acts so resorting to the administrative process would have been futile, and could not operate as a precondition to their suit.

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