Virginia State Senator Bill Stanley recently proposed legislation that will require nursing homes and assisted living facilities to carry enough insurance to compensate injured residents and their families. Nursing home abuse and neglect lawyers are hopeful that this legislation will gain ground and be quickly approved.
There is current legislation requiring homes for adults and adult day care facilities to have sufficient insurance coverage, but no such legislation exists for nursing homes and assisted living facilities. Similarly to other big industries, such as asbestos manufacturers, complicated corporate networks are protecting owners from paying legal claims. Many large nursing home chains have filed for bankruptcy to avoid expensive abuse and neglect litigation.
One such company, Haven Healthcare, filed for bankruptcy protection while in the midst of accusations that it diverted millions of dollars to a country music label in Nashville. According to the New York Times, Haven manages 15 nursing homes in Connecticut, and, prior to filing for bankruptcy, was accused of numerous incidents of resident mistreatment.
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Unfortunately, it is not uncommon for nursing homes and large chains to seek bankruptcy protection after such allegations. Many do so under the guise that the protection will guarantee better care for residents. The reality, however, is much more malicious. Over the past five years, at least eight other nursing homes entered into bankruptcy in Connecticut alone.
There have been many cases of lawsuits won by victims of nursing home abuse and neglect who are unable to receive the awards because the facilities had no assets and insufficient insurance coverage. One such case involved the death of an elderly woman at a Florida nursing home. The woman, wheelchair-bound and raddled with dementia, passed through a propped-open door to the facility’s stairwell, where she fell to her death. The door was left open by an employee going out for a smoke break. The jury awarded the woman’s family $200 million. The defendant, Pinellas Park Care Center, had recently dissolved and no longer existed. Ownership of Pinellas Park divided into layers of different companies. One researcher found that some of the nation’s largest for-profit chains have up to five layers of ownership.
These layers mean that decisions on staff and supplies are often not made by the facility administrator or even the local owner; they are being made by real estate investors or private equity firms. This lack of transparency directly contributes to low-quality care because companies have no incentive to provide high-quality care. State officials have much difficulty levying fines and sanctions if they cannot work out who ultimately makes the decisions. The family of the woman awarded $200 million is still awaiting payment.
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Senator Stanley personally investigated similar cases. In one instance, a nursing home resident was physically assaulted by another resident known to be dangerous. The man later died from the injuries, and when his family sued, they found that the facility had no assets and only $100,000 in insurance, which went mostly to court costs. In another instance, the parents of an adult with cerebral palsy sued the facility after her death. The woman died from suffocation due to improper breathing equipment maintenance and lack of supervision. That facility had only $50,000 in coverage, which were, again, used to cover court costs. The parents said that they would never have admitted their daughter into the nursing home if they had known about the facility’s insufficient insurance coverage.
Stanley’s bill will also require nursing and assisted living facilities to notify residents and their families about whether or not they carry liability insurance, and the extent of the coverage. This will be an important addition to the Patient’s Bill of Rights.
Senior abuse and neglect lawyers at Pintas & Mullins are hopeful that this bill will pass through the Senate Education and Health Committee to be considered by the full Senate. Elder abuse is already far too common in the United States, and we must take all measures to ensure that those victimized by nursing home abuse receive full and just compensation for their injuries.