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Legislators study nursing home lawsuit reforms

By: Emily Bregel
(Contact)

Included in this article

TFP Editoral Board discussing the Tennessee Nursing Home Patient Protection Act of 2008

PDF:Senate_Bill_4075

Some members of the state House Judiciary Committee say they are torn about a bill that would limit the liability of nursing homes in abuse and neglect lawsuits.

“I have mixed feelings about it,” said committee member Rep. Frank Buck, D-Dowelltown. “I don’t have any doubt that there are some overzealous plaintiffs out there, but the question is what do we do about them.”

The legislation — sponsored by Sen. Jim Tracy, R-Shelbyville, and Rep. Randy Rinks, D-Savannah — would limit noneconomic and punitive damages, such as “pain and suffering” payments, awarded in nursing home lawsuits.

The law would not limit economic damages, such as compensation for medical bills, but it would allow nursing homes to require that new patients sign an arbitration agreement before entering the facility. That means the parties involved would agree to use a professional arbitrator instead of a trial in the case of a lawsuit.

Nursing home industry officials and attorneys supported the bill during a a meeting with editors and reporters with the Chattanooga Times Free Press on Monday.

In Tennessee, nursing home liability costs have skyrocketed, as out-of-state lawyers move in to take advantage of the lack of regulation in nursing home lawsuits here, said Steve Flatt, senior vice president of development with National HealthCare Corp.

Meanwhile, critics say the legislation would restrict the rights of nursing home patients and their families. They also point to the recent spike in nursing home violations in Tennessee as a reason that the threat of liability is needed.

In 2007 the number of admissions suspensions at Tennessee nursing homes more than doubled from 2006.

Committee member Rob Briley, D-Nashville, said some legislative action is needed to rein in liability costs for nursing homes, but he is unsure about the recently proposed legislation.

“I don’t know about caps on damages,” Rep. Briley said. “I’ve never really favored that, but I’m willing to take a look at it.”

Thirty-two states have passed legal reform for long-term care in the past decade, driving trial lawyers into states such as Tennessee, where there is little regulation, Mr. Flatt said.

In Tennessee the average nursing home’s cost for defending liability cases increased from $90 per occupied bed in 1996 to $4,880 per bed in 2006, Mr. Flatt said. The U.S. average was $1,610 per bed in 2006, he said.

“The liability costs ... are right now at the tipping point where it becomes extremely difficult for the very best nursing homes to stay in business,” he said.

Rep. Henry Fincher, D-Cookeville, a House Judiciary Committee member, said the bill is an overreaction to a McMinnville, Tenn., court ruling in a negligence case against National HealthCare Corp.

A jury verdict last year recommended that NHC pay $4.2 million to the family of a nursing home patient and more than $29 million in punitive damages, but the ruling is under appeal. The judge vacated the punitive damages, Mr. Flatt said.

“I don’t think the justice system working is a justification for crippling patients who deserve to be protected,” Rep. Fincher said.

Gov. Phil Bredesen’s office declined to comment on the bill.

Staff reporter Andy Sher contributed to this article.

Lawsuit frequency rate in Tennessee

* 2001 — 7 lawsuits per 1,000 beds

* 2006 — 12.1 lawsuits per 1,000 beds

SOURCE: 2006 General Liability and Professional Liability Actuarial Analysis by AON Global Risk Consulting