New Nursing Home Laws
Do Little for Florida's Elders

By Jim Messer, Partner

This year there has been a lot of press coverage concerning the need to improve quality of care in Florida nursing homes while at the same time keeping nursing homes financially solvent.

In response to a need to solve the perceived "nursing home crisis," a task force was established to study the "crisis" and recommend ways to reduce nursing home bankruptcies without compromising patient care and safety. Led by Lt. Governor Brogan, the Task Force on Availability and Affordability of Long-Term Care disbanded when members could not agree about the distribution of their findings to the Florida Legislature. Fearful that lawmakers would misinterpret their findings, they then sent 400 pages of assessments and opinions to the Florida Legislature with no specific recommendations or endorsements.

The result? The Legislature, unhampered by any Task Force "findings" passed "reforms" that primarily benefit owners of for-profit nursing homes and insurance companies marketing long-term care policies.

Lawmakers claim these new laws are necessary because nursing homes are finding it increasingly difficult to obtain affordable liability insurance. The Legislature claims a growing number of insurers have stopped writing policies in Florida because the cost of litigation is extraordinary. They blame the trial lawyers for bringing the lawsuits that cost the industry money.

The reality is trial lawyers do not make insurance companies covering nursing homes pay damages — juries do. And the claim that nursing homes and the insurance industry stand helpless before the trial lawyers is simply baseless. The insurance industry and nursing homes have the finest lawyers available at their beck and call. Lobbyists for nursing homes and the insurance industry would also have you believe there is a proliferation of multi-million dollar damage awards that are bankrupting their industry. The reality is that large verdicts are extraordinarily rare. When there is a large verdict, it garners an equally large amount of attention from the media. When juries do return large verdicts, however, the insurance company has the right to ask for a new trial, for a reduction in the verdict or they may appeal the verdict to a higher court. Unfortunately, there is very little press coverage about those lawsuits rejected by juries, or settled before they are tried in court for small amounts of money or that are reversed on appeal.

The truth is nursing home bankruptcies are a business tool used to counteract decreased revenues from reductions in state and federal reimbursements combined with poor business practices (staff negligence and incompetence). Just as clear is the truth about jury awards in favor of neglected and abused residents. Juries return awards when there is neglect and/or abuse to our most helpless citizens. Without these verdicts, the nursing home industry would run roughshod over the residents it is supposed to protect. Thankfully, in our judicial system any American, rich or poor, weak or strong, has the right to seek redress through our civil justice system. This year however, our Legislature took away certain of the judicial safeguards previously available to nursing home residents.

Those abused and neglected nursing home residents now must bring a lawsuit within two years of the violation, down from the previous four-year statute of limitations. This will certainly limit lawsuits as it often takes two years to investigate a claim after the grieving family learns that their loved one may have suffered at the hands of the provider. A new cap on damages doesn't benefit residents of nursing homes either. Punitive damages (those damages awarded to punish and deter wrongful conduct) are now capped at $1 million and will only be awarded when the evidence is clear and convincing that the defendant was guilty of gross negligence. There is a cap of $4 million when wrongful conduct by the defendant was motivated primarily by unreasonable financial gain (a nearly impossible burden to prove) and there is no limit when the defendant specifically intended to harm the resident and the resident did suffer harm. This final punitive level is virtually meaningless as the public policy of the State of Florida precludes any insurance coverage for an intentional act.

Against the onslaught of the media blitz by the nursing homes and the insurance industry, only AARP opposed liability caps. Eventually however they too relented and agreed to the legislation in terms of the requirement to improve quality of care. To be fair, parts of the law will eventually provide for better care for patients in nursing homes, including increases in the staffing levels of the nursing homes, additional training of nursing home personnel and the requirement that the nursing homes carry liability insurance.

So, what will really happen? Now that the industry has succeeded in passing new laws will these reforms alleviate the nursing home crisis? Early signs are not promising. One of the largest nursing home chains in the country, and one who lobbied hard for legislative changes in Florida, recently sold all of their nursing homes in Florida and left the state. Will insurance companies admit that it is easier to write policies for Florida nursing homes with fairer laws on the books? Probably not. The more likely outcome is that trial lawyers will continue to be the target of nursing homes and the insurance industry in an attempt to pass additional laws aimed at the ongoing "nursing home crisis."

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