Judgment Caps for Nursing Home Lawsuits

January 10, 2009

Tennessee state legislators introduced a bill last month seeking to limit the payout awards for negligent care lawsuits against nursing homes.  If signed into law, this bill would put an effective cap on the pain and suffering piece of the court’s judgment, either at a whole dollar amount (the Tennessee bill suggests $300,000) or a percentage of the so-called actual damages (e.g. medical bills, lost income, etc.).  The sides of the debate on these type of bills line up approximately this way:

Against Caps:

1) To limit the judgment amount in negligent care cases chills the deterrent effect of such lawsuits.  Or, simply put, nursing home owners will not try harder to deliver non-negligent care unless they are convinced to do so with serious lawsuit damages.

2) Lawsuits involving seniors at nursing homes almost inevitably have lower actual damage awards than other negligent care (i.e. medical malpractice) suits because the victims are no-longer working, their loved ones have a greater expectation of their dying(and thus, presumably suffer less at their death), and they are less likely to have a recovering spouse (the presence of a surviving spouse generally increases wrongful death/pain and suffering lawsuits).  Thus, to cap the pain and suffering awards makes such suits less effective at a) compensating the plaintiff/plaintiff’s family and b) deterring the same bad acts in the future (see point 1 above).

For Caps:

1) Analogy to Medical (i.e. hospital and physician) Malpractice: Many states (though notably not Tennessee) limit medical malpractice lawsuits in a number of interesting and creative ways.  The most common of which is to place some kind of cap on the pain and suffering awards of such suits, but another good option is to have an appointed board of specialists review every medical malpractice complaint and evaluate it for merit before the suit goes on to the court.  The rationale is that medical services are in short supply and such measures prevent physicians from leaving one state for another because of “frivolous lawsuits.”  Long Term Care is as well a necessary and limited resource.  Placing these type of caps on judgment amounts will ensure the perpetuity of LTC facilities, but at the same time strike the necessary balance of compensating plaintiffs/improving the delivery of care.  

2) Long Term Care is so heavily regulated, that it is unjust to allow so-called free-judgment lawsuits against LTC facilities.  The state has taken it upon itself to regulate nursing homes, and fine them, sometimes heavily, for violations of those regulations.  Plaintiffs should not be allowed to seek extravagant compensation on top of this statutory punishment when negligent care occurs.  A judgment cap is exactly the right maneuver to seek a just balance between compensating plaintiffs and preserving a highly regulated industry.  

Conclusion

Tough one.  There are more (and more subtle arguments) out there on this debate.  But, it is interesting to think through.  On some bottom level it comes down to how nursing homes are going to be considered in the future.  Are LTC facilities businesses like retailers and dealerships, delivering care for cash, preserving the bottom line for shareholders?  Are they a public trust, something to be preserved as a community resource above most every other consideration?  Should they be considered something all-together different?  Some combining balance?  

It is a good discussion.

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