New York Injury Talk Blog

Late last year private equity firms came under the scrutiny of the United States Senate, according to a story in The New York Times. It seems that private equity firms have been snatching up nursing homes all over the country-structuring complex levels of ownership in an attempt to avoid liability from lawsuits handled by New York personal injury lawyers.

Both Democrats and Republicans support oversight and an investigation into why it seems that nursing homes bought by private investor groups scored poorly on 12 to 14 indicators used by regulators to track ailments of long-term residents. In two separate letters, Chuck Grassley [Rep], of Iowa, asked the Government Accountability Office, Congress’s investigative arm, to examine how private equity ownership had affected the quality of care in nursing homes. In one of those letters, reprinted in the Times, Grassley questioned the legal schemes used by investment firms to shield them from liability-in effect denying both patients and family members any legal remedy against nursing homes. Grassley further indicated that the use of such varied and complex ownership structures voided any transparency that would indicate who was responsible for resident care and the operation of investor-owned nursing homes.

According to another New York Times article, corporate structures employed by the investor-owned nursing homes allows them to bypass typical disclosure requirements mandated by Medicare and/or Medicaid funded nursing homes.

The complex structuring of private equity nursing homes seems to reinforce the notion that safety may be compromised for a good return on investment.