The Mississippi Business Journal’s quarterly health care issue contained an article on the unsuccessful efforts in the Mississippi Legislature to pass a bill requiring nursing homes to carry liability insurance. Here is a link to the digital issue. The article starts on page 32.

In the article Jackson attorney John Maxey speaks on behalf of the nursing home industry, which opposes efforts to require nursing homes to carry liability insurance. In an email to the MBJ on the issue, Maxey dropped this bombshell:

“The overwhelming majority of nursing homes already have liability coverage in place, and the remainder make provisions within their business model to satisfy any court-ordered financial obligations that might arise.”

Really? Thanks for the info. Mr. Maxey, because lawyers in your firm who are defending nursing home cases sing a different tune.

Maxey’s assertion that nursing homes can pay any judgment directly contradicts what lawyers in Maxey’s law firm tell plaintiff lawyers when negotiating settlements. When defending cases alleging negligence by nursing homes, lawyers in Maxey’s firm tell plaintiff lawyers that uninsured nursing homes will declare bankruptcy if a large judgment is obtained in the case.

The typical nursing home that Maxey’s firm defends operates as a limited liability company (LLC). A different company owns the building and certificate of need for the nursing home. The LLC operating the nursing home has little or no assets because it is a shell corporation with the profits drained off to the owners.

This organizational structure is designed to insulate nursing home operators from liability for abuse and neglect. Nursing home defense lawyers use it as a hammer to drive down the settlement value of cases. The organizational structure has made the bankruptcy threat appear very real to lawyers representing the victims of nursing home neglect.

But now John Maxey says it’s a bluff. This is a big deal.

For prior posts on the issue of Mississippi’s uninsured nursing homes, click here.