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Improve care by limiting
lawsuits, jury awards in cases against nursing homes
Reutter, Business & Law Editor
CHAMPAIGN, Ill. —
Placing limits on lawsuits and jury awards against nursing homes would
improve the quality of care to elderly residents by reducing the skyrocketing
cost of liability insurance, an article in the Elder Law Journal argues.
In the wake of state laws that opened the door to lawsuits against poor
care in the 1980s, nursing homes have been beset by litigation that
threatens to sap the financial strength of the industry, according to
R. Patrick Bedell, articles editor for the journal, which is published
by the University of Illinois College
“Tort reform in nursing home litigation is desirable because the
current tort regime imposes costs on the long-term care industry, while
providing questionable benefits to patient care,” Bedell wrote.
Nursing home malpractice costs have risen sharply both because of the
number of lawsuits filed and the size of the damages awarded by juries.
“Nursing homes are a new target of the litigation system,”
and lawsuits have driven costs to crisis levels, causing insurance premiums
to rise to as much as $7,000 a bed in Florida in 2001.
Partly as a result of escalating costs, a growing minority of nursing
homes has stopped buying insurance. “Without liability insurance,
a nursing home is exposed to bankruptcy if a large monetary judgment
is rendered against it, leaving patients without care,” Bedell
Much of the historic problem of poor nursing home care is due to chronic
government underfunding, especially compared with the public funding
of acute care in hospitals. By default, Medicaid has become a primary
means for funding long-term care services.
These state-administered programs, which subsidize the medical bills
of the poor and elderly, are among the fastest growing expenditures
in state budgets. “Given the states’ financial contribution
to long-term care funding, it is in the interests of states to address
the costs that tort litigation imposes on nursing homes,” Bedell
The Florida Legislature, faced with the bankruptcy of many nursing homes,
capped in 2002 the award of attorneys’ fees and made it more difficult
for a plaintiff to prove that a nursing home was negligent. While a
nursing home could be considered liable in the past if it failed to
meet federal standards, the new law required a plaintiff to show that
the failure to meet the regulations resulted directly in injury or death.
A 2002 measure passed by the Ohio Legislature not only limited punitive
damages, but allowed a jury to consider the impact that any payout on
the ability of the nursing home to provide services for its patients.
“Tort reform should be encouraged to make litigation a more efficient
means of providing a right of action for nursing home abuse or negligence,”
the Illinois scholar wrote.
To make this happen, Congress should create incentives through increases
in Medicaid funding to states that pass tort reform laws promoting quality
“For instance, if Congress conditioned increased Medicaid funding
on some tort-reform plan, and did not insist upon particular tort reform
strategies, states could decide for themselves the elements of tort
reform. This discretion respects state autonomy, and state voters would
be able to hold state government accountable for the particular tort
reform plan it chooses to adopt,” the article concluded.
Bedell’s article is titled, “The Next Frontier in Tort Reform:
Promoting the Financial Solvency of Nursing Homes.”