Karla Hewitt

Nursing home operators will have to wait at least another year for a chance at getting some relief from what they say are out-of-control liability costs.

As this year’s legislative session winds down, state lawmakers last week decided to put off a bill that would limit the liability of nursing homes accused of mistreating residents.

“There was an urgency on the part of the nursing home industry to pass this bill out,” said Rep. Henry Fincher, D-Cookeville, chairman of the House judiciary civil practice subcommittee, which considered the bill. “Several (committee) members, including myself, felt that what they were asking for wasn’t justified by the evidence.”

The bill will be moved to a study committee for further discussion this summer and fall, Rep. Fincher said.

The legislation, introduced by state Sen. Jim Tracy, R-Shelbyville, and state Rep. Randy Rinks, D-Savannah, would set a $300,000 limit on noneconomic damages claimed in nursing home liability cases. Such damages include compensation for pain and suffering or other intangible losses. Under the bill, punitive damages could total no more than twice the amount of noneconomic damages.

The bill would not limit economic damages that can be awarded, such as compensation for medical bills, loss of earned income and funeral expenses.

Nursing home industry officials argue that rising liability costs for nursing homes in Tennessee eventually will make it difficult for homes in the state to stay in business.

Thirty-two states have passed liability reform for nursing homes. That leaves Tennessee as a “target for the plaintiff firms that know they can get unlimited settlements and judgments,” said Steve Flatt, senior vice president of development with Murfreesboro-based National Healthcare Corp., which operates dozens of nursing homes and home-care agencies in Tennessee and 11 other states.

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, according to an analysis by AON Global Risk Consulting.

The U.S. average was $1,610 per bed in 2006, according to the study, commissioned by the American Health Care Association, a group that represents long-term care providers.

Rep. Rob Briley, D-Nashville, said he was not satisfied with the figures cited by nursing home industry officials to back up their concerns of an impending “crisis.”

“I’m not disputing the accuracy of the AON report, but I would rather have more than one study upon which to base a decision as big as this is,” Rep. Briley said.

RISING VIOLATIONS

The nursing home bill comes at a time when violations have been on the rise in Tennessee, said Karla Hewitt, president of the board of directors of Tennessee Citizen Action, a consumer group based in Nashville.

Between 2006 and 2007, the number of Tennessee nursing homes ordered to stop accepting new patients more than doubled from 10 to 22, according to Tennessee Department of Health officials. Five nursing homes lost their federal funding in 2007 after reports of serious health and safety violations, the department said.

“Honestly, we don’t doubt that their litigation costs have gone up,” Ms. Hewitt said. “If you leave the heat up, your electric bill is gonna rise. That’s just kinda how it is.”

Advocacy groups including the Tennessee Disability Coalition, Tennessee Citizen Action, the Tennessee AARP and the Tennessee Association for Justice, formerly the Tennessee Trial Lawyers Association, lobbied in Nashville against the bill to limit nursing home liability.

QUESTION OF ARBITRATION

Another sticking point of the legislation is a clause that would let nursing homes require an arbitration agreement for each entering patient, not allowing patients to take them to a trial by jury. Instead, a professional arbitrator would rule on a case. This requirement would not affect patients already in nursing homes.

The nursing home industry argues that arbitration saves money and time for all parties involved, but critics counter that requiring arbitration is unfair to patients and their families who may not understand that they are giving up their right to a trial by jury.

Last week, two U.S. legislators introduced a bill to prohibit nursing homes from requiring an arbitration agreement to enter a nursing home.

“The decision to place a loved one into a nursing home is often made under desperate, even emergency, circumstances,” wrote Sen. Herb Kohl, D-Wis., one of the national bill’s sponsors, in an e-mail statement. “By including arbitration agreements in admission contracts, nursing homes are forcing residents and their families to sign away their rights to settle future disputes in court at a time when they are especially vulnerable.”