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Nursing home insurance rates soar as county closely watches

The county has numerous nursing homes and ALFs, so skyrocketing insurance rates are a hot issue here.


© St. Petersburg Times, published February 14, 2001

Providing long-term residential care for the elderly is big business in Citrus. The county has eight nursing homes that offer a combined 961 beds. A ninth home, with 120 beds, is scheduled to open this spring near Citrus Hills. Citrus also is home to at least 15 assisted living facilities, which provide a different level of care than nursing homes.

So when lawmakers and lobbyists talk about tackling the industry's problem with liability insurance, plenty of local people are paying attention. And when the Legislature addresses the issue this spring, as it has promised to do, the people who live and work in nursing homes and ALFs will have ample reason to tune in.

The problem: Insurance premiums have skyrocketed statewide, causing some homes to close their doors and others to worry they might face the same fate.

Why is insurance so difficult to obtain and afford? It depends on whom you ask.

Trial lawyers, who represent residents, say staff negligence and incompetence are prevalent and thus inspire high premiums and rates. Nursing homes say Florida law encourages lawsuits and has allowed lawyers to score huge court victories; in the process, insurers have become frightened and have withdrawn from the market or jacked up their rates.

One such court victory occurred in Citrus almost two years ago, when Winifred Martin won a $20-million verdict. Half of that judgment was lodged against Citrus Health and Rehabilitation Center, the Inverness nursing home where she was living when a toe infection spread and led to a partial leg amputation.

No matter what the reason, nursing home managers and operators say the problem is real and needs quick resolution.

Surrey Place, a 120-bed nursing home in Lecanto, is a good example of how the problem has manifested itself. The home had a clean claims record in summer 1999, when it sought to renew the insurance coverage it had held since 1993. But the carrier, the St. Paul Companies, was withdrawing from Florida.

Diane Wesch, the administrator at Surrey, said her business managed to secure a new policy at reasonable rates. But that carrier left Florida in July, leaving Surrey little choice but to sign with a company whose premiums were 250 percent more than what Surrey had been paying.

"You can be the best facility in the world, and you (a disgruntled resident) get the best attorney and they can take you for anything. It's downright scary," Wesch said.

"It's a real challenge to try and find money to pay all the other bills that come through, because resident care is the most important thing," Wesch said.

Trial lawyers and people who advocate on behalf of nursing home clients present a different view.

"The problem is we have a crisis of care in Florida, and the industry is in denial about it," said Ken Connor, a trial lawyer, during a recent meeting of a state task force designed to address long-term care.

The state studied the legal landscape last year and determined that fewer and fewer companies were issuing liability coverage for Florida nursing homes and ALFs. It presented its findings to the state task force.

Tom Gallagher, the state's newly elected insurance commissioner and treasurer, said through a spokeswoman that the federal government could help nursing homes by increasing the Medicare reimbursement rate that those homes receive.

Closer to home, he said, state government should teach young people the importance of long-term care insurance and perhaps explore a move to require large employers to provide, or at least help provide, such coverage to their employees.

If people who live and work in nursing homes and ALFs have an obvious reason to monitor the Legislature's efforts this spring, other Citrus residents might want to pay attention, as well, since a local lawmaker, state Rep. Nancy Argenziano, will be in the thick of the battle.

Argenziano, R-Crystal River, chairs the House Healthy Communities Council, which puts her in position to guide legislation related to long-term care. She also served on the state task force and, in the process, managed to alienate some people in the nursing home industry by accusing them of lying and saying they had failed to demonstrate any insurance crisis.

Argenziano has locked horns in particular with the Florida Health Care Association, an industry trade group. The group has said she failed to exhibit proper leadership when she declined to vote on a series of recommendations that would have marked the first step in providing lawsuit relief.

Argenziano said the recommendations came from the task force's active staff and should be presented as such. Other task force members shared that view.

"What they're trying to do now, especially the Florida Health Care Association, if you don't agree with them, they try to paint you as the trial lawyers' girl. Well, I'm not anybody's girl," Argenziano said. "The person I most want to protect are the people in those nursing homes."

Argenziano pointed to the new Citrus Hills home, being built by Woodlands Care Center of Citrus County Inc., and its president, Morris Esformes, as evidence that the "crisis" might be exaggerated.

"Why the hell are you doing that if this is such a bad place to be?" Argenziano asked.

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