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Changes in Florida’s Nursing Home Laws: Restricting the Ability to Transfer or Renew a Nursing Home License if a Judgment Goes Unpaid

According to the 2010 census, not surprisingly, Florida is the state with the highest percentage of senior citizens with 17.3% of the population over the age of 65. It would follow that Florida has progressive laws ensuring the safety of its nursing home residents. Unfortunately, this is not the case.

For example, Florida law requires that nursing homes carry liability insurance for injuries or death resulting from nursing home neglect. Sound like a good idea? It is, however, the Florida Statutes do not require a certain minimum amount of coverage. As a result, nursing homes often carry insurance policies with less than $10,000.00 in coverage per home. Technically, one dollar in coverage satisfies the requirement of the statute. Think about it: every single owner of a vehicle must carry a minimum of $10,000.00 in coverage in the event of an accident, yet nursing homes – being paid to take care of a hundred or more vulnerable adults – do not.

Earlier this year, Florida revised its nursing home laws in several ways that impact claims for negligence, abuse or wrongful death against nursing homes.

For years, nursing homes in Florida have engaged in a “shell game” of corporate ownership. The nursing homes are typically broken into many limited liability companies – one for the licensee, one for a management company, and another for the owner of the real estate, just to name a few.

The owners (called “members”) of each LLC are themselves LLCs, which in turn have other LLCs as their owners. The result is a myriad of interwoven and related companies, none of which are individually and ultimately responsible for the residents’ injuries or deaths. Even worse, a large judgment against any one of the LLCs will result in that LLC becoming insolvent. At that point, if necessary, the LLC holding the license with the State of Florida could simply transfer the license to a new LLC. Not surprisingly, the new licensee usually turns out to be owned by the same people as before.

What is really going on here is that, with large chain nursing homes, decisions about how well the nursing home is staffed – which translates to how much money is spent – actually come from the corporate owners of the entire chain. However, these individuals can make these decisions without regard for liability because they are shielded by the complex maze of LLCs.

In the event their “profits over patients” motive is exposed to a jury, the resulting verdicts can be huge. However, the owners and decision makers have effectively “walled off” the one nursing home at issue and insulated the rest of their businesses from liability. If the owners are then allowed to transfer the license from such a nursing home to a new LLC that they create, while leaving the judgment unpaid, there becomes very little incentive for them to hire more nurses and provide better care.

The new law takes steps to avoid this injustice. Florida Statute Section 400.024 titled, Failure to satisfy a judgment or settlement agreement, provides that a licensee must pay a judgment, arbitration award or negotiated settlement within sixty days, or else the Agency for Healthcare Administration can revoke the nursing home’s license, deny its renewal application or deny a change of ownership application.

Despite statements to the contrary from some nursing home operators, nursing homes are very profitable in Florida. One reason for this is that the total number of nursing home beds in the state is highly regulated. As a result, nursing home occupancy rates are close to 100%. Because of this, the new restriction in renewing or transferring a license will either result in payment to the plaintiff or the closing of the nursing home.

If you have any questions about Florida’s nursing home laws, please contact our Jacksonville nursing home injury law firm.