Ownership of Nursing Homes by Private Equity Investors Challenged

Representing Orlando, Tampa, Miami and Nearby Areas of Florida

In the last several months, the ownership of nursing homes by wealthy private equity companies has come under scrutiny. State legislatures and the federal government are conducting hearings addressing concerns that the purchase of nursing homes by these groups of wealthy investors decreases the quality of care provided to residents. CGWC partner Nathan P. Carter was asked to testify at Florida Senate hearings this past week and was quoted in an Associated Press article distributed widely by most media outlets, including CNN and major Florida newspapers.

 

Mr. Carter testified that wealthy investment groups set up complex layers of corporations and limited liability companies or partnerships in order to make it harder for injured or abused residents to sue them. Mr. Carter says the elimination of real legal accountability in turn removes incentive to operate nursing homes safely and provide the highest quality of care.

In Florida, this is particularly ominous since most nursing homes operate with no real liability insurance to cover injuries or deaths caused by negligence, neglect or abuse by their staff. This is true despite a state law enacted in 2001 requiring liability insurance. This is because loopholes in the law have not been closed by the governor’s office or the Agency for Health Care Administration. AHCA, a part of the administrative branch answerable to the Florida Governor, has failed to enact or implement regulations imposing minimum levels of liability insurance, so this law is largely ignored. Instead, nursing home operators are entering into complex agreements with investment companies to avoid accountability to residents for injuries and to Medicare and Medicaid for fraudulent or illegal billing.