Florida's nursing home industry would get some relief from the resident-liability lawsuits that it claims are putting nursing homes across the state perilously close to bankruptcy under a bill approved earlier this month by the Republican-dominated state Legislature.
The comprehensive bill would set some caps on resident-liability lawsuit awards and boost staffing requirements, but it also would provide Medicaid reimbursements to pay for some of the staffing increases.
Gov. Jeb Bush, a Republican, is widely expected to sign the bill into law.
"I think it's a win for everybody," said Erwin Bodo, M.D., senior vice president of the Florida Association of Homes for the Aging, which represents 280 not-for-profit facilities. "The residents get higher care, more regulatory oversight (and) more staff, and the nursing homes get some relief from tort (liabilities) and some additional monies."
For national chains, which claim to have been a particular target of aggressive plaintiffs' lawyers, the relief may have come too late. Citing liability concerns, Extendicare Health Services, Milwaukee, and National HealthCare Corp., Murfreesboro, Tenn., have exited the state (See story below).
Beverly Enterprises, Fort Smith, Ark., is looking to sell its 53 Florida facilities as well, and the company last week announced an $86 million charge to write down the value of the facilities. The charge led to a first-quarter loss of $52.3 million, or 50 cents per share, compared with a profit of $6.3 million, or 6 cents per share, in the year-ago period. A $21.6 million charge for restructuring also hit the company's earnings. Revenue was up 2% to $659.9 million. Beverly said it is in discussions with a potential buyer of all the facilities and has talked with other parties interested in buying the Florida operations.
If the bill becomes law, it would set limits on punitive damages based on a tiered system, unless a plaintiff can prove actual intent to harm the resident. Also, nursing homes would no longer be liable to pay plaintiffs' attorney fees. And the legal standard under which claims are judged would be tightened to more closely reflect that used in medical malpractice cases.
The bill also would boost staffing requirements, and the state Agency for Health Care Administration would increase its scrutiny of both nursing and assisted-living facilities.
Ed Towey, a spokesman for the Florida Health Care Association, which represents primarily for-profit homes, said the bill is comprehensive. "It was not just a lawsuit-relief bill; it was not just a regulatory bill; it was not just an increased staff bill. It looked at all aspects of this," Towey said.