Skip to main content
Opens in a new tab External site
Aon/AHCA report: severity, frequency of claims to increase for long term care providers in 2018
New findings relate liability costs to the Center for Medicare and Medicaid Services’ quality measure

CHICAGO (Nov. 15, 2017) – An increase in frequency and severity of claims is causing the cost of liability to increase for the long term care profession, according to the findings of an analysis released today by the American Health Care Association (AHCA) and Aon (NYSE:AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions.

The 15th published edition of the Aon/AHCA 2017 Long Term Care General Liability and Professional Liability Actuarial Analysis provides estimates of loss rates, or the cost of liability to skilled nursing care centers on a per-bed basis. The projected national 2018 loss rate, which is a combination of claim severity and frequency, is expected to increase to $2,450 per occupied bed. This means that a nursing center with 100 occupied beds can expect approximately $245,000 in liability expenses in 2018.

“Rising costs of doing business are always a concern for the long term care profession. This report validates what many providers already know – liability costs are increasing and adding strain to those who are already struggling to keep their doors open,” said Mark Parkinson, President and CEO of the American Health Care Association. “This study reinforces why it is important to use tools like arbitration agreements to efficiently and effectively resolve disputes for resident and providers alike.”

“Because liability costs vary so much by geography, the findings in the report deliver tremendous value to providers in helping them effectively navigate the current, complex liability landscape,” added Christian Coleianne, associate director and actuary from Aon.

CMS Quality Measure

New to this year’s study, researchers looked at how liability costs relate to the Overall 5-Star Rating published by the Centers for Medicare and Medicaid Services (CMS). This rating is intended to help consumers make informed decisions when selecting a health care provider by distilling ratings on health inspections, staffing and eleven quality measures into a five tiered ranking.

“While we expected long term care providers with the lowest quality ratings to have the highest loss rates, the drivers behind this result surprised us,” said Coleianne. “The difference is actually driven by claim frequency. That is, the loss rate for facilities with a one-star rating tended to be higher because they had a higher frequency of claims, not because the size of the claims were larger. In fact, the average size of claims is similar regardless of rating.” 


The report examines arbitration use in long term care facilities and, as in previous years, findings reiterate that there are several advantages for care providers to use arbitration agreements to resolve claims. Principally, overall costs for claims resolved with arbitration agreements are 5 percent lower and settle three months faster than for claims resolved without such agreements. 

Statewide Results

In addition to the national projection, 16 states are profiled individually in this annual report. This year’s data finds three states projected to have higher-than-average loss rates per occupied bed in 2017. West Virginia, which has a favorable environment for large claims outcomes, has the highest projected loss rate at $7,890 per occupied bed. Florida has the second highest projected loss rate at $6,780 per occupied bed, followed by Kentucky with a projected $6,410 per occupied bed.

In contrast, Texas and Massachusetts are two of the lowest cost states. Massachusetts has an anticipated $500 loss rate per occupied bed, while Texas has an anticipated rate of $550 per occupied bed.

Note to editors

An abstract of the report and graphics illustrating results from the 2017 Aon/AHCA Long Term Care General Liability and Professional Liability Actuarial Analysis are available upon request. To access the report, visit The report is also available via registration at


Approximately 18,300 individual non-zero claims from long term care facilities were aggregated. The 28 providers represented in the national study operate approximately 211,200 long term care beds, consisting of skilled nursing facility beds and a number of independent living, assisted living, home health care and rehabilitation beds. They represent approximately 16 percent of the beds in the United States.

Follow Aon on Twitter:
Sign up for News Alerts:

About Aon

Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. For further information on our capabilities and to learn how we empower results for clients, please visit


The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) represents more than 12,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and development disabilities. By delivering solutions for quality care, AHCA/NCAL aims to improve the lives of the millions of frail, elderly and individuals with disabilities who receive long term or post-acute care in our member facilities each day. For more information, please visit or

#   #   #

Media Contact:
Meg Cotiguala

Media Resources

Access international media contacts, the full library of Aon media releases, and a media kit with fact sheet and executive bios, via links below.

Media Contacts
Media Releases
Media Kit
Featured Updates