WSJ: Lawsuits Shake Nursing Home Industry

Allegations of harmful treatment in nursing homes are garnering large sums of money from jury awards, pushing operators to flee certain states.

Arkansas lawyer Brian Reddick tells The Wall Street Journal in a recent article he has amassed more than $100 million from jury awards in nursing-home suits. And now he and other lawyers are filing neglect and abuse cases in places like Pennsylvania, where the country’s fourth-largest concentration of residents aged 85 and older has spurred a litigation boom aimed largely at for-profit nursing-home operators.

“Two decades after its start in Florida, the legal strategy has moved into tort-friendly states and receded from others as patient care improves or lawmakers institute caps on noneconomic damages in court decisions,” The Wall Street Journal says.

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But major nursing-home operators and industry groups say many of the lawsuits line attorneys’ pockets while doing little to improve the quality of care, noting that some law firms use aggressive tactics.

In August, Canadian-owned Extendicare Health ServicesInc. said it would lease its 22 skilled-nursing homes in Pennsylvania, Delaware and West Virginia to a third-party operator. It cited a fourfold increase in liability claims in those states in recent years “despite a strong and improving quality record.” The company similarly pulled out of Kentucky in 2012. 

Lawyers for nursing-home operators say the concentration of cases filed in states with limited or nonexistent curbs on noneconomic damages means lawsuits that elsewhere might be settled for $50,000 can generate much larger settlements or verdicts.

More than 1.4 million people live in U.S. nursing homes, 69% of which are run by for-profit entities.

“This is a sector that is 80% reliant on state and federal payments,” Greg Crist, a spokesman for the American Health Care Association, which represents both for-profit and nonprofit nursing homes, tells The Wall Street Journal. “Our members are looking around, saying we need to survive.”

Previously, there wasn’t much money in suing nursing homes, but that changed in the 1990s when a pair of lawyers pioneered a strategy that involved a largely overlooked Florida law that set standards for nursing-home care and allowed plaintiffs to sue for legal fees.

Nursing-home operators began to settle, and the firm expanded operations, hiring more lawyers and pursuing cases across the country.

“Just about any state is good for nursing-home litigation if you have a good case,” Reddick says. “Jurors are very sympathetic.”

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Written by Cassandra Dowell

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