Tennessee Nursing Home Owner Warned About Insurance

NASHVILLE, Tenn. (AP) _ The corporate owner of a nursing home where a fire killed eight residents has self-funded liability insurance _ coverage that the company previously warned may be inadequate in an emergency.

No lawsuits have yet been filed in Thursday's fire at the four-story NHC HealthCare Center, a building with 116 residents and no sprinklers in the living areas. Thirteen residents remained in critical condition Saturday, and 44 others were being treated at Nashville hospitals.

The home's owner, National HealthCare Corp. of Murfreesboro, said it decided to fund its liability insurance on its own because it received only two bids to provide coverage in 2002. It has paid the quoted premium into a fund it administers, but it said in a document filed with the Securities and Exchange Commission that the fund could prove inadequate.

``It is possible that claims against us could exceed our coverage limits and our reserves, which would have a material adverse effect on our financial position,'' the company said in a 10-Q statement for the quarter that ended March 31.

National HealthCare runs 82 nursing homes in 12 states, as well as home care programs and independent- and assisted-living centers, according to the company Web site.

It has made multimillion-dollar payouts in court cases involving its facilities, but it has also posted profits _ $16.4 million last year and $13.2 million in 2001.

According to an SEC filing, 100 claims of negligence were pending against National HealthCare or its managed care centers as of Dec. 31, 2002. Fifty-five of the claims had been filed in Florida, where the company no longer operates or manages long-term centers.

The Tampa, Fla.-based law firm Wilkes & McHugh has filed several neglect and abuse suits against National HealthCare.

``It chronically short-staffs facilities, which leads to a lack of supervision and short-staffing so even basic needs aren't met,'' said Wilkes & McHugh attorney Brian Reddick. ``Some patients aren't fed properly or hydrated.''

Gerald Coggin, a National HealthCare executive, said the lawsuits filed by Wilkes & McHugh have nothing to do with the Nashville fire.

``Those allegations are several years old and are totally unfounded,'' he said. ``We're concentrating on our patients and taking care of them in all our facilities.''

National HealthCare has settled some lawsuits, including agreeing in 2000 to pay $17.6 million over five years to settled a lawsuit alleging improper billing for skilled nursing services in four centers in Florida.

In 1999, a Florida jury ordered National HealthCare and York Hannover Nursing Centers to pay $6.5 million to the grandchildren of an 89-year-old woman whose leg was amputated after a small scrape festered for six weeks.

National HealthCare operated the nursing home owned by York Hannover in New Port Richey, Fla. The companies agreed to pay another $3.5 million minutes before the jurors were to consider punitive damages.

The cause of Thursday night's fire at the nursing home in Nashville remains under investigation. An electric hospital bed in the room where the fire started was sent to the U.S. Consumer Product Safety Commission in New York for testing.

Firefighters said sprinklers in the building could have saved lives, but the nursing home was almost entirely exempt from state laws requiring the devices. Only one sprinkler _ over the kitchen grill _ was required, and it had been installed.

National HealthCare has nursing homes in Alabama, Georgia, Indiana, Kansas, Kentucky, New Hampshire, Massachusetts, Missouri, South Carolina, Tennessee, Virginia and Washington state.