May 6, 2001- Assisted-living Facilities Face Liabilities
Over the protests of trial lawyers and patient-rights advocates, the assisted-living industry is joining nursing homes in asking legislators to limit lawsuit awards. Florida's assisted-living industry says it is beginning to fall victim to the same dilemma that is threatening nursing homes. Trial lawyers are using a broadly written law to sue the industry for violating the rights of residents, they say.
As a result, many insurers have either stopped writing policies for assisted-living facilities or implemented double or triple-digit rate increases, assisted-living officials say. But the stakes may be higher for assisted-living facilities than for nursing homes, since, unlike nursing homes in the state, assisted-living facilities must carry liability insurance to stay in business.
The insurance industry generally does not distinguish between those facilities that have been sued and those that have not. To insurers, all assisted-living facilities operate in a risky legal climate. As a result, virtually every facility in the state faces a rate increase this year as their policies come up for renewal.
Already, the state has warned dozens of uninsured facilities that they will be shut down if they don't find coverage. While most have found insurance, at least one in Central Florida, Adams Home Care of Orlando, is still searching, according to state records. At least one in South Florida has shut down. Adams Home Care officials couldn't be reached for comment.
As a result, growth in the number of assisted-living facilities has slowed. New licenses granted by state regulators fell in 2000 to 206, after rising for each of the preceding three years, according to records kept by the Agency for Health Care Administration, which regulates the state's nursing homes and assisted-living centers. The slowdown appears to be continuing this year, with 41 licenses awarded in the first three months of 2001, down from 85 issued in the same period of 2000.
Nationwide, the assisted-living industry exploded in the 1990s, feeding off a pent-up demand for elderly services that would fill the gap between retirement communities and nursing homes. With assisted living, seniors with relatively minor medical problems could receive help taking their medications or getting physical therapy, but still maintain a semblance of independence. For those with the money, assisted-living facilities could delay or eliminate the need for a nursing-home stay.
Assisted-living facilities differ from nursing homes in that they usually are not equipped to provide medical care to seriously ill patients and they almost always require patients to pay for their stays out of their own pockets. Therefore, assisted-living residents usually are healthier and wealthier than nursing homes residents. The industry's growing popularity was evident in Florida, where the number of new facilities in Florida rose 51 percent to 2,374 statewide in 2000, from 1,568 in 1992. But now, industry officials say, that growth is threatened.
Like nursing homes, assisted-living facilities say they are being sued under a law called the Residents' Rights. Meant to guard patients of long-term-care facilities from harm, the statute provides protections such as freedom from physical and mental abuse, to more vaguely written standards as the right to dignity.
The problem, industry advocates say, is that the statute is so broadly written that lawsuits are almost impossible to defend. As a result, insurers would rather settle than take a chance on losing in court. The majority of suits are being filed in South Florida, where larger facilities with deeper pockets are concentrated.
Industry officials insist that assisted-living facilities rarely have the same quality problems that have plagued the nursing-home business. Several trial lawyers agreed that assisted-living facilities generally do not suffer quality problems as severe as those found in some nursing homes, if only because their residents are healthier. For instance, bedsores are far less common in assisted-living facilities, where patients are less likely to be bedridden.
However, assisted-living facilities get into trouble when they hold on to patients longer than they should, said Frank Petosa, a Boca Raton lawyer who lobbies for the Florida Academy of Trial Lawyers. That's happening more frequently as the proliferation of new facilities has heightened competition to ferocious levels, creating a battle for residents that causes some facilities to keep patients who should be passed on to nursing homes, he said.
So far, lawmakers have proposed a handful of bills, including one that would allow residents to seek punitive damages only if they prove the alleged negligence was "motivated solely by unreasonable financial gain," and another that would require a portion of punitive damages won by residents to be put back into improving care in nursing homes.
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