Nursing homes, consumers lock horns over arbitration bill at congressional hearing

Providers cried "discrimination" and consumer advocates called for an even tougher stance Tuesday during a congressional hearing on the "Nursing Home Arbitration Act of 2008." House and Senate bills (H.R. 6126 and S. 2838) seek to disallow pre-admission clauses that bind residents to arbitration should a complaint be filed later.

Providers "aggressively oppose efforts to diminish the use of arbitration by American businesses, especially those unfairly targeting long-term care consumers and providers," testified Gavin Gadberry on behalf of the American Health Care Association and the National Center for Assisted Living before members of the House Judiciary Subcommittee on Commercial and Administrative Law. He said troubling anecdotes cited by others at the hearing were the exception rather than the rule in nursing homes.

Among those endorsing the "Fairness" act was AARP board member Dr. William Hall, who said he hoped to work with all parties to expand the bill's reach. AARP hopes that the bill would apply to "all current residents of long-term care facilities, not just those whose pre-dispute arbitration agreements are made, amended, altered, modified, renewed or extended on or after the date of enactment of the bill. The protections provided under this legislation should be available to all current long-term care facility residents."

Norman DeLisle, MDRC
"With Liberty and Access for All!"
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Lawmakers hear testimony on nursing home arbitration clauses

WASHINGTON (Legal Newsline)-Federal lawmakers heard Tuesday that binding arbitration clauses in nursing home contracts provide a fair and timely resolution of patient disputes.

Arbitration agreements are "a viable option" for long term care providers and their residents to resolve legal disputes, said attorney Gavin Gadberry, representing the American Health Care Association and the National Center for Assisted Living.

"Arbitration is less adversarial than traditional litigation, produces quicker results and has been determined to be both fair and appropriate by our courts," he told members of the House Judiciary's Subcommittee on Commercial and Administrative Law.

The 12-member panel is considering legislation introduced by committee chair Rep. Linda Sánchez, D-Calif., who said she recently placed her father in a nursing home.

"Unfortunately, this debate is colored by anecdotes and misinformation perpetuated by high-profile trial attorneys who traditionally oppose any effort to bring balance to the personal injury playing field, and who give too little consideration to the harmful consequences on the long term care industry that follow from the high transaction costs of traditional litigation and the resulting financial drain on the system," Gadberry said.

The legislation, outlined in H.R. 6126, would render invalid pre-dispute arbitration agreements between a long-term care facility and a resident or anyone acting on the resident's behalf.

"When legal concerns arise, we believe that fair and timely resolution -the kind that is often the product of arbitration - is in the best interest of both the consumers and their care providers," Gadberry said.

The bill-the Nursing Home Arbitration Act of 2008-is supported by AARP, which represents older Americans.

Dr. William Hall, a member of AARP's board of directors, told the committee that pre-dispute arbitration clauses in nursing home contracts are "harmful" to residents and their families.

"These arbitration clauses force a Hobson's choice --waive the right to seek redress in the courts or get care in another facility, assuming there is one in their area without an arbitration clause," the Rochester, N.Y., geriatrician said.

While the quality of care in nursing homes and other residential care centers has improved since the enactment of federal nursing home quality standards in the Omnibus Budget Reconciliation Act of 1987, he said "much more" needs to be done to improve patient care.

"Many facilities do provide high quality care, but there are also too many facilities that show significant quality deficiencies that can cause harm to residents on their annual inspections," Hall said.

Arbitration clauses, he said, unfairly take away residents' and families' legal options. What's more is that many nursing home admissions are made unexpectedly, after a crisis.

"Clearly, most people seeking nursing home admission are focusing on the quality and range of services available, and are not thinking about possible future disputes," Hall said.

"When they are presented with admissions contracts, they often do not know that an arbitration requirement is buried in the fine print of the multi-page document," he added.


Norman DeLisle, MDRC
"With Liberty and Access for All!"
GrandCentral: 517-589-4081
MDRC Website: http://www.copower.org/
LTC Blog: http://ltcreform.blogspot.com/
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House measure would outlaw nursing home arbitration clauses

Nursing home operators would be unable to subject residents and prospective residents to binding arbitration clauses under a bill introduced Thursday afternoon in the U.S. House. When a companion bill was introduced in the Senate in April, consumer groups enthusiastically praised it and provider advocates roundly criticized it.

"This legislation will not prohibit arbitration. Instead, it will simply ensure that residents have the choice whether to arbitrate a dispute after it has arisen," said bill co-sponsor Rep. Linda Sanchez (D-CA), whose father recently entered a nursing facility.

Sanchez said hosting three recent hearings on the Federal Arbitration Act as the chairwoman of the Subcommittee on Commercial and Administrative Law helped form her opinions on the topic. "The long term care industry is one stark example where businesses draft take-it-or-leave-it admission agreements for prospective residents that include pre-dispute, mandatory arbitration clauses."

Norman DeLisle, MDRC
"With Liberty and Access for All!"
GrandCentral: 517-589-4081
MDRC Website: http://www.copower.org/
LTC Blog: http://ltcreform.blogspot.com/
Recovery: http://therecoveringlife.blogspot.com/
Change: http://prosynergypsc.blogspot.com/

Arbitration bill 'misguided,' lobbying group claims

Lobbyists for the long-term care industry on Friday voiced strong objections to the Fairness in Nursing Home Arbitration Act, a new piece of legislation that would prohibit the use of arbitration agreements at the time of a resident's admission to a long-term care facility.

The American Health Care Association and the National Center for Assisted Living argued that arbitration agreements allow nursing home and assisted living facility staff to concentrate on providing care to residents. They help ensure that Medicaid money will go towards improving care instead of paying off legal fees and settlements, the group claims.

But requiring prospective residents to sign pre-admission arbitration agreements intrudes upon their right to “access the civil justice system for redress of their potential claims,” said Sens. Herb Kohl (D-WI) and Mel Martinez (R-FL), who introduced the bill last week. Bruce Yarwood, president and CEO of AHCA, called the bill “misguided.

Nursing Homes Increasingly Use Arbitration To Avoid Lawsuits, Reduce Costs

Nursing home residents and their families increasingly are "giving up their right to sue over disputes about care, including those involving death, as the homes write binding arbitration into their standard contracts," the Wall Street Journal reports. Under arbitration agreements, nursing home residents and their families agree to settle disputes through a third-party arbiter. According to the Journal, "Nursing homes have been among the biggest converts to the practice since a wave of big jury awards in the late 1990s."

The practice has "profound implications" on the nursing home industry, according to the Journal. An industry study released last year found that the average cost of settling cases has declined for nursing homes. At the same time, claims of poor treatment have been increasing, the Journal reports.

Consumer advocates and plaintiffs' lawyers have criticized the arbitration systems for nursing homes, saying that people too often do not understand whether the arbitration clauses are mandatory or that they are waiving their right to sue. Critics say courts should handle such claims. Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) on Wednesday introduced legislation that would prohibit nursing homes from requiring patients to sign an arbitration agreement as a term of service. Martinez said, "It is an unfair practice given the unequal bargaining position between someone desperate to find a place for their loved ones and a large corporate entity like a nursing home."

The American Arbitration Association, which is the largest arbitration provider in the nation, generally refuses to handle cases of nursing home arbitration and opposes arbitration requirements in nursing home claims. The American Health Lawyers Association has a similar stance, and other arbitration groups said they only accept the cases when the agreements are in compliance with law. Eric Tuchmann, general counsel for the American Arbitration Association, said that some patients "really are not in an appropriate state of mind to evaluate an agreement like an arbitration clause."

The nursing home industry says arbitration is relatively inexpensive for plaintiffs and defendants, and allows nursing home staff to focus on patient care, instead of litigation (Koppel, Wall Street Journal, 4/11).