Myths About Nursing Home Tort Reforms

The following is an executive summary. You can also view the full report here and the appendices here in .pdf form.

The Center for Medicare Advocacy performed a study entitled Tort Reform and Nursing Homes that deflates the myths that pervade the nursing home industry’s discussion of tort litigation. It found that cases about nursing home abuses are not frivolous.

The civil justice system compensates victims of grossly inadequate care or gross failures of care. When nursing home care kills or injures vulnerable elderly nursing home residents, tort litigation is necessary to hold facilities accountable. The civil justice system also complements the public regulatory system in its efforts to improve the quality of care for all residents, current and future. Tort litigation can lead to significant changes in facilities’ care practices and can remove providers that refuse to give residents good care.

Myths About Civil Litigation Against Nursing Homes Are Deflated By The Study’s Findings

  • Cases are not frivolous

First and foremost, the cases are not frivolous. Cases represent situations where residents have been seriously injured and died. They involve deaths by strangulation on bedrails or other physical restraints, pressure sores, malnutrition, and dehydration.

  • There is no explosion of litigation

While the number of cases has increased, there has not been an explosion in tort litigation, as the industry contends. The Center’s evaluation of litigation in Maryland found few filings statewide and no reported decisions at all at the appellate level.

Moreover, while a handful of facilities have many cases filed against them, most have few or none. The Orlando Sun found that litigation is generally concentrated in relatively few facilities.

Compared to the amount of abuse, neglect, and grossly poor care suffered by residents each day, as documented by the General Accounting Office and others, the number of cases filed against nursing homes in fact remains small.

  • Recoveries are not astronomical

While cases involving hundred million dollar jury verdicts receive attention in the media, these verdicts are publicized because they are in fact both large and unusual. The study finds that actual settlements and pay-outs are considerably lower than these multi-million dollar verdicts. Judges may reduce large verdicts in post-trial motions and cases are often settled for lower amounts during appeal. As a consequence, one insurer reported that its average claim payment increased nationally from $25,599 in 1995 to $59,370 in 2000, considerably less than the multi-million dollar verdicts publicly reported in the press.

  • Litigation supplements the public regulatory system

The distribution of cases against facilities is not random. Facilities with large numbers of verdicts and settlements recorded against them are the same facilities that have been the subject of significant public enforcement activity. Frequently-sued facilities have usually been cited with large numbers of deficiencies by state survey agencies. Civil litigation may also bring about quasi-regulatory results in specific facilities and permanent changes to facility practices, benefitting future residents.

Viewed in this light, civil litigation is an important adjunct of the public regulatory system. Like the public enforcement system, it serves an important public function of improving care for all residents.

  • Civil litigation is not the cause of rising liability insurance premiums

Finally, the Center’s study demonstrates that tort litigation is not the cause of rising liability insurance premiums. Various analyses identify multiple causes for increased rates that include, but go far beyond, tort litigation:

  • The profit-motivated insurance industry, which has minimal experience with nursing homes and little competition for business;
  • The insurance industry’s unregulated status with respect to pricing nursing home liability policies;
  • The insurance industry’s not finding in nursing homes the types of risk management programs that are standard in other health care settings;
  • Poor quality nursing home care;
  • Insurance companies’ raising premiums based on national, rather than state-specific, nursing home pay-out experience (so that states without significant tort litigation nevertheless experience significant rate increases);
  • Rising commercial insurance rates, as a general matter; and
  • The cyclical pattern in the insurance industry, so that insurance companies raise premiums based on financial matters unrelated to claims (e.g., (1) insurance industry invests premiums in the stock market to generate revenues; declining stock prices affect insurance companies’ profitability; (2) insurance companies had substantial payouts as a result of September 11, 2001).

Study Consistent with Other Findings

The Center’s findings about the serious failures of care reflected in tort litigation are consistent with findings of others who have looked specifically at civil justice litigation against nursing homes. As the Florida Task Force on the Availability and Affordability of Long-Term Care reported in December 2000, “the lawsuits are fundamentally about pressure sores, falls, dehydration, and malnutrition or weight loss.” Cases described in the Appendix amply supported the finding. For example, the Florida Task Force described a May 20, 1999 settlement for $1.5 million in Leon County:

Admitted 3/95; good condition. By spring 1995, contractures resulting in fetal position; falls, traumas, multiple bedsores (1/96); 3/96 gross mismanagement of feeding tube; weight loss of 43 pounds over the next 67 days. Died 10/11/96. Fraudulent and inconsistent charting entries included entries showing care during hospitalizations and day after death.

The Florida Task Force’s findings were echoed by the Harvard study reported in Health Affairs (March 2003), which recently documented that more than half the cases in civil justice litigation against nursing homes involved residents’ deaths.