With their profits threatened by what they claim as a bevy of money-hungry, out-of-state trial lawyers, the nursing home industry is trying to impose limits on damages a court could award their patients for pain and suffering.
But their efforts to pass legislation have run into a buzz saw of opposition from trial lawyers and the AARP, who say the nursing home industry is just trying to protect itself in a time when violations at nursing home facilities are high.
As a result, the powerful nursing home industry has already had to change course.
Originally, “The Nursing Home Patient Protection Act of 2008” would limit non-economic, or pain and suffering, awards a court could award to nursing home patients to $300,000.
Last week though, those caps were increased to $500,000.
In addition, language opposed by AARP was taken out of the bill that would have allowed nursing homes to require their patients to sign arbitration agreements to keep lawsuits out of the courtroom as well as requiring nursing home suits to have the same legal restrictions as medical malpractice claims.
Rep. Randy Rinks (D-Savannah), the sponsor of the bill, said that change was a “fig leaf” to encourage negotiations with opponents of the legislation.
“So far, what we’ve been doing, there’s not been much compromise going on,” Rinks said in an interview. “I think the trial lawyers have got their position, and they haven’t been willing to change.”
Trial lawyers may feel comfortable because of strong opposition from some members of the House subcommittee in which the bill must pass through, including the panel’s chair, Rep. Henry Fincher (D-Cookeville).
Fincher, a lawyer, calls the measure the “kill old people cheap act of 2008.”
But this week, for the first time, the nursing home industry and trial lawyers will sit down at the negotiating table. Rep. Rob Briley (D-Nashville), a trial lawyer who has tried to reach compromise on tort reform legislation in the past, encouraged the move.
Helping patients, or the industry?
The nursing home industry is willing to negotiate because the bill is “too important” for nursing home patients, said Gerald Coggin, a Senior Vice-President for National HealthCare Corp., a Murfreesboro-based company that operates 32 facilities in Tennessee.
Coggin says that the high costs nursing homes are paying to defend lawsuits, many times brought by out-of-state trial lawyers, is preventing nursing homes from investing more in patient care.
A study, conducted for the nursing home industry by Aon Risk Consultants, showed that nursing homes in Tennessee paid $4,880 per patient on liability costs while states that had tort reform laws averaged $1,240 per patient.
In addition, proponents of the legislation say the average Tennessee nursing home spends $500,000 per year on liability costs, which is the equivalent of hiring 10 nurses.
“This truly does protect our patients by putting more money into providing patient care and less money into the pockets of trial lawyers,” Coggin said.
Trial lawyers though say the measure is just trying to protect the nursing home industry and not its patients.
Daniel Clayton, the president-elect of the trial lawyer group called the Tennessee Association for Justice, said despite the bill’s title, the legislation does not have “one word” that protects patients.”
Clayton also disputed the notion that nursing homes would save money from defending lawsuits and use it for patient care.
“Where is there any provision in the bill that says that’s what they’re going to do?” Clayton asked rhetorically.
The state Department of Health, which oversees nursing homes, suspended admissions at 22 facilities in 2007, up from 10 in 2006, as a result of violations found.
The incident that has caused the biggest set of recent nursing home lawsuits resulted from the 2003 fire at a Nashville nursing home, which killed 16 people. NHC, which ran the nursing home, settled 32 lawsuits related to the fire.
Need to keep doors open?
Incidences like the 2003 tragic fire in Nashville bolster Rep. Mike Turner’s opposition to the bill.
Turner (D-Old Hickory) is a firefighter who fought the 2003 fire and pulled people out “with tears in our eyes because it was so bad.”
Turner said the nursing home tort reform bill would “open the door” to negligent nursing homes to get away with “treating people wrongly.”
“I’m not necessarily for lawyers making big fees, but these are our most vulnerable people and they earned the right to be treated with dignity in their old age,” Turner said. “I just think by capping it, we’ve done a disservice to them.”
Other lawmakers though, like Lt. Gov. Ron Ramsey (R-Blountville), believe nursing homes need something from the state to help them with liability.
If they don’t, proponents of the tort reform legislation say some nursing homes could be forced to close their doors. NHC’s Coggin pointed to 123 nursing homes being sold in Florida between 2000 and 2003 before tort reform was passed.
In Tennessee, Kindred Health Care sold half of its nursing homes located in the state, Coggin said.
“I do believe that we’re getting to the point of a crisis here in the state of Tennessee,” Ramsey, a co-sponsor of the bill, said.