The Morning Call had an article about hidden arbitration clauses in consumer contracts from Paul Muschick of The Watchdog.  The latest proposal by the Consumer Financial Protection Bureau, a federal agency that regulates banks, credit card issuers and other financial businesses, wants to ban what it says is an unfair practice within the financial industry that many people don’t even know is occurring. 

“When you open a bank account, borrow money or apply for a credit card, the agreement you sign often signs away your right to participate in a class-action lawsuit against that business. The terms, which are in fine print that most people likely don’t read, often require disputes to be resolved outside of court on an individual basis in arbitration.”

The Consumer Financial Protection Bureau said it is considering proposing rules to prohibit financial companies from using arbitration clauses to block participation in class-action cases. Customers and the broader marketplace lose when companies shield themselves that way.

Companies have been able to use this little-known clause to rig the game against their customers,” the bureau’s director, Richard Cordray, said in a statement.  “Group lawsuits can result in substantial relief for many consumers and create the leverage to bring about much-needed changes in business practices,” he said. “But by inserting the free pass into their consumer financial contracts, companies can sidestep the legal system, avoid big refunds, and continue to pursue profitable practices that may violate the law and harm consumers on a large scale.”

It isn’t proposing to ban all arbitration terms. Companies still could require customers to take their individual complaints to an arbitrator. But they couldn’t prohibit customers from banding together to take action collectively before a judge.

“The central idea of the proposals we are considering is to restore to consumers the rights that most do not even know had been taken away from them,” Cordray said. “Consumers should be able to join together to assert and vindicate their established legal rights.”

Forced arbitration is a biased, secretive and lawless process that stops accountability by companies that violate the law, whether by charging illegal fees, refusing to reimburse an unauthorized charge, or pursuing debt that a consumer does not owe,” said Lauren Saunders, associate director of the National Consumer Law Center.


“If you’re wondering what this means for you, it means you should read the fine print of the agreements you sign so you understand what rights you may be signing away.

Law 360 had an article on the trials and tribulations of CEO Laurie Bebo.  U.S. Securities and Exchange Commission Administrative Law Judge Cameron Elliot ordered Bebo, the top executive at Assisted Living Concepts Inc., to pay $4.2 million after it allegedly listed fake occupants at its residences in order to meet lease requirements.  In a December order instituting administrative proceedings, the SEC alleged Bebo devised a scheme with then-Chief Financial Officer John Buono to invent fake occupants for the senior residences in order to avoid triggering a default on their lease. One of the purported seniors was just seven years old, according to the SEC.

In an initial decision, Elliot ruled that Bebo must pay $4.2 million in civil penalties for her alleged violation of certain loan covenants in violation of federal securities laws. The judge also found that she should be barred from serving in officer and director positions.  Judge Elliot pointed to the egregiousness of Bebo’s alleged fraud scheme as a reason why she should face the heaviest possible sanction.

During the investigation and her arbitration against ALC, she gave testimony that was often as bewilderingly incredible as her hearing testimony,” Judge Elliot wrote in an 81-page decision. “Over the course of approximately five days on the witness stand during the hearing, she had the breathtaking audacity to tell, under oath, what largely amounted to a fairy tale. The simple truth is that Bebo concocted an elaborate fiction, started telling it over six years ago, and has never stopped.”

Judge Elliot held that Bebo had “utterly failed” to admit to the wrongfulness of her alleged conduct and hasn’t promised she won’t commit similar conduct in the future. He noted that her alleged misconduct caused ALC to pay millions in settlements and also caused a multi-dollar drop in share price in May 2012, the year when the alleged scheme ended.

“She corruptly misused her power and authority to betray the trust reposed in her by her subordinates and by ALC’s board, all to avoid the consequences of violating the financial covenants,” the decision said.  The case is In the matter of Laurie Bebo et al., file number 3-16293, before the U.S. Securities and Exchange Commission.

Inforum reported that Minnesota’s attorney general, Lori Swanson, is urging the federal government to enact rules that would help ensure people who are entering a nursing home don’t sign away their right to take disputes with the nursing home to court.  Waiving the right to legal action is presented to Minnesotans as a separate agreement when someone moves to a nursing home, while in many states it is buried deep in the fine print of lengthy admissions contracts. But Swanson said that regardless of how it is presented, Minnesotans should not be asked to give away their right to go to court.

Swanson and attorneys general from 14 other states have asked federal officials to order nursing homes, assisted living centers and other long-term care facilities to remove mandatory arbitration clauses from admission contracts.


“You are giving up significant legal claims,” Swanson said of those who accept arbitration upon nursing home admission.

In an interview, Swanson said that residents and their families sign the contracts in a stressful time, and they may not understand that if they want to bring a wrongful death or resident neglect claim later on, for instance, they cannot go to court.



In an article from, the author describes how some homes are trying to make it easier for potential patients to stay in their nursing homes. Aldersgate Village’s recovery center is a transition place for patients who have left the hospital but are not strong or healthy enough to return home. Many times these patients require short term rehabilitation, something that is traditionally done in nursing homes. However, as president and CEO Jerry Ney said, “Nobody wants to go to a nursing home.”

Thus, they have created an environment separate from the nursing home which is specifically for short stay patients requiring physical rehabilitation. The area is in a separate wing of the home, with its own facilities including dining and living spaces, private rooms, and therapy rooms. Marsha Anderson, marketing director for Topeka Presbyterian Manor said, “They feel very much like a nice hotel room.”

KevinMD is a blog which recently had the below article by Dr. Carol E. Gunn who is a physician. She recently gave a TEDx talk, “Medical Errors: The Silent Killer in Medicine.” She can be reached or contacted on her self-titled site, Carol Gunn, MD.

It’s been over a year since my older sister Anna died, so I choke up less readily while speaking about it. The raw anger is less, but the frustration of losing someone to a preventable medical mistake will always remain with me. Anna was five years older than me, my only sister, and the one I often turned to for advice. We were close despite living 600+ miles apart. She was smart and insightful; she was at ease in most social situations. I, on the other hand, was the nerdy kid sister who loved science, who became a physician in my early 40s.

In 2012, Anna’s world turned upside down when she was diagnosed with bone marrow failure (myelodysplastic syndrome) at 58. This disease stemmed from her previous treatment for breast cancer. At the time of diagnosis, everything else in her life seemed to be going well. She loved being a (single) mom; she had a wonderful job; and they had just adopted an adorable Lab. She actually felt great.

After testing showed she was fit to withstand the rigors of a transplant, including a thorough cardiac evaluation, she had a bone marrow transplant in early 2013 at a well-respected teaching hospital. Anna did fine initially. But, seven months after her transplant she began to have odd neurologic symptoms and five months after that, chest pain. When she told me about her chest pain, I told her she had to go to the ER. Instead, she elected to ask her treating physician about her chest pain. He recommended antacids.

“Really, antacids?” This was the first of several missteps where her doctors improperly dealt with her chest pain. When I would ask Anna, she assured me that she was telling her physicians about her chest pain. And, after her death and my reading of her full medical record, I know she did tell her doctors about her it.

When her chest pain persisted, another doctor said her nerve pain medicine was treating it — again never fully evaluating its root cause. She was hospitalized two months later for her neurologic symptoms. Anna continued to have intermittent chest pain and was increasingly short of breath. The teaching hospital physicians “treated” her chest pain with narcotics. Seven days after admission, her physicians requested a cardiology consult. And, it then took another five days for the cardiologist to finally evaluate her.

I can’t even begin to fathom why it took days for her chest pain to be fully evaluated while she was an inpatient. And, until the cardiologist evaluated her, she was being given Oxycodone for her chest pain.

By then, she needed a coronary stent and was finally was put on all the correct cardiac medications. But it was too late — the damage was already done, she had a fatal cardiac arrhythmia days later. When I read her autopsy report which revealed she had been having “ongoing waves” of heart attacks, I was devastated.

In the days that followed, my shock turned into anger. Convinced her death was likely preventable, I was driven to find the truth. After countless hours of reviewing all her medical records, I knew without a doubt: her death was preventable.

If it had not been for my dogged persistence, the providers at the teaching hospital would have chocked up her death to “long-standing cardiac disease,” which she did not have. I kept raising questions and it became evident I was not going to go away. She did not have “long-standing cardiac disease.” She died a preventable death due to delays in diagnosis of chest pain.

Clearly, as a physician, I have a huge advantage that most afflicted family members don’t: I understand medical records, how hospitals work, and the hierarchy in medicine. Even so, the road was difficult and at times overwhelming for me. But I was determined.

I returned to the teaching hospital that treated Anna, multiple times in fact, asking to hear about the changes being put in place to prevent more death like Anna’s. You see, many of her medical notes were “cut and pasted” and contained outdated information. When I met with one of her attending doctors in the hospital conference room, he confessed that although he had not evaluated Anna, he had written an admission note on Anna as if he had. He explained it was because it was “late at night.” I asked another one of her doctors why he had not fully evaluated her chest pain. He said, “I would then have to refer out all my patients” [to cardiologists] for which I responded, “Sir, you could have been a hero.”

On September 22, 2015, the Institute of Medicine (IOM) released its report, “Improving Diagnosis in Health Care.” This is the third report in the IOM Health Care Quality Initiatives, beginning with, “To Err is Human: Building a Safer Health System” and then “Crossing the Quality Chasm: A New Health System for the 21st Century.”

In this third study, the IOM reports that the data on diagnostic errors is “sparse,” but their best estimate is that “all of us will likely experience a meaningful diagnostic error in our lifetime.” The report outlines eight goals to improve and reduce diagnostic errors. This will take: cultural shifts, education, teamwork, an error reporting system, changes in health care delivery, and funding. The “meaningful diagnostic error” for Anna was that none of her providers recognized her chest pain as a cardiac red flag until it was too late.

When will health care step up to this challenge? When will the public demand it? When will you demand it?


Consumer Voice, along with 38 other national advocacy organizations, sent a letter to the Centers for Medicare and Medicaid Services on Wednesday, October 14th, asking the agency to ban the use of pre-dispute, forced arbitration agreements in nursing home contracts. In a proposed rule released in July, CMS solicited feedback on whether or not the agency should ban these agreements as part of its revisions to the federal nursing home regulations. Consumer Voice has long advocated for the elimation of these clauses, as pre-dispute, arbitration agreements strip consumers of their constitutional right to a trial by jury and force individuals – before any problem arises – to agree to settle through an arbitration process. They are increasingly common in nursing home admission agreements, often used as a condition of admission into a facility, and place consumers and their loved ones at a disadvantage should incidences of harm, abuse and neglect occur.

In a press release regarding the matter, Marybeth Williams, Public Policy Associate, stated: “One of the most critical improvements CMS could make in the federal nursing home regulations would be to ban the use of pre-dispute arbitration agreements by facilities. In our experience, such agreements never are good for consumers and never are made on a consumer’s initiative. Instead, they are drafted by facilities and signed by consumers who feel that they do not have the freedom to say ‘No.’ Unlike disputes with a bank or cell phone provider, disputes that arise in nursing homes often involve catastrophic events such as pressure sores, malnutrition, dehydration, asphyxiation, sexual assault, and death. Residents and their representatives cannot reasonably foresee such tragedies occurring when these agreements are presented to them. CMS’s proposed language would be ineffective and, worse yet, would suggest that pre-dispute arbitration agreements are approved by the agency. CMS must make the right choice for residents and ban the use of pre-dispute, arbitration agreements by nursing homes once and for all.”

To read the organizational letter asking CMS to ban the use of these agreements, click here.

American Association of Nurse Assessment Coordination (AANAC) recently sent a Letter to CMS regarding proposed new rules regarding arbitration in nursing homes.  See below for excerpts.

On behalf of the American Association of Nurse Assessment Coordination (AANAC), representing 15,000 long-term care nurses and professionals across the country, we respectfully submit these comments in response to the Medicare and Medicaid Programs.

AANAC has discussed the issue of binding arbitration with a number of national stakeholders. We support Consumer Voice in their statement that “Nursing Facilities Should Not Be Allowed to Obtain Blanket Arbitration Agreements Prior to a Dispute Arising (42 C.F.R. § 483.70(n))”

We strongly urge CMS to prohibit binding arbitration, especially during admission or at any time prior to a dispute arising. The admission time is a stressful time for residents and their family as they are making many difficult, quick decisions. When presented with a document for binding arbitration at the time of admission, the resident or their representative may not fully be making an informed decision. As a practical matter, residents (or resident representatives) sign arbitration agreements at admission not because they think arbitration is a good choice, but because they are routinely signing everything put in front of them.

Unlike other types of pre-dispute arbitration agreements, which may cover a single transaction or a specific type of dispute, arbitration agreements in nursing facilities cover every single aspect of a resident’s life, and may apply through weeks, months or years that the resident lives in the facility. Also, nursing facility arbitration agreements often involve claims involving (for example) pressure sores, infections, malnutrition, dehydration, asphyxiation, sexual assault, and death. It is unreasonable to expect residents and their representatives to make decisions regarding such catastrophic events during admission, long before the events have occurred.

Furthermore, the arbitration process tends to be slanted against consumers such as nursing facility residents. Arbitration companies have a financial incentive to side with the nursing facilities who are responsible for sending them cases on an ongoing basis. Also, discovery is limited in arbitration, hindering plaintiffs from developing their cases. Arbitration proceedings are secretive, often protected by confidentiality rules. And, while court filing fees are relatively nominal, arbitrators charge by the hour, with the extensive costs generally split between the parties.

As part of the proposed regulations, CMS rightly recognizes the significant negative impact of predispute arbitration agreements, proposing regulatory language that would set various procedural protections. CMS’s proposed language, however well-intentioned, would make matters worse. No amount of procedural protections can change the basic power dynamic of the admissions process — incoming residents and their families are generally in a time of great stress, and the terms of the admission agreement are drafted exclusively by the facility. Worse, if CMS’s proposed language were to become law, nursing facilities would cite the regulatory language to courts as evidence that CMS approves nursing facility arbitration, and would argue that compliance with the regulation was proof that the arbitration agreement and the circumstances surrounding its signing were fair.

We emphasize that our recommendation would not prohibit a resident or resident’s representative from choosing arbitration after a dispute has arisen, if the resident or representative at that time concludes (likely through legal counsel) that arbitration is the best option. Any pre-dispute arbitration agreement, however — particularly if it is signed during the admission process — is unfair to residents and should not be allowed.

The New York Times had an interesting article regarding a new report by the inspector general of the Department of Health and Human Services.  The report states that nursing homes are exploiting the billing system for therapy.  Nursing homes receive far more in Medicare payments than it costs them to provide care, and by giving patients more therapy services than they need.  Medicare payments to nursing homes are increasing for reasons unrelated to the condition or characteristics of patients, the report said.

Nursing homes regularly filed claims for the highest, most expensive level of therapy, regardless of what patients required.  In recent years, nursing homes have been classifying more and more patients as needing the highest level of therapy and providing exactly the amount required to qualify for high payments. The extra billings cost Medicare $1.1 billion in 2012-13.

“Skilled nursing facilities must provide therapy for 720 minutes or more during a seven-day assessment period to bill for ultrahigh therapy,” and they “increasingly provided exactly 720 minutes,” Mr. Levinson said.  The current payment system creates an incentive for nursing homes to “provide as much therapy to a resident as that resident can tolerate.”

The inspector general cited claims data as evidence that some nursing homes had exploited the system “to optimize revenues.” For example, Mr. Levinson said, a Medicare beneficiary who received hospice care before and after her nursing home stay received physical therapy five days a week for five weeks, “even though her medical records indicated that she asked that the therapy be discontinued.”

Medicare classifies nursing home residents into one of 66 groups depending on the patient’s needs. More than one-third of the groups are for patients who require physical, occupational or speech therapy. Medicare pays more for patients who require the most therapy.

The inspector general has documented “inappropriate payments” to nursing homes in many studies over the last 15 years.  In March, an influential federal panel, the Medicare Payment Advisory Commission, said that Congress should thoroughly revamp payments to nursing homes. Medicare payments to nursing homes, it said, have been at least 10 percent higher than the cost of care for 14 years in a row.

“Therapy payments are not proportional to costs, but instead rise faster than providers’ therapy costs,” the commission said, and Medicare “essentially requires taxpayers to continue to finance the high margins of this industry.”

The Gwinnett Daily Post reported that U.S. Rep. Hank Johnson joined 26 of his colleagues in calling on the Centers for Medicare and Medicaid to ban the use of forced arbitration in nursing home agreements.  The representatives co-signed a letter to the center’s acting administrator, Andy Slavitt, to outline their concerns that a proposed rule regarding forced arbitration does not go far enough to protect nursing home residents.  To insure fairness, the group wants the final rule to say residents can only enter arbitration voluntarily after disputes arise.

“This vital distinction would preserve arbitration as a useful tool for alternative dispute resolution among willing residents rather than one that forces parties into arbitration before disputes arise,” the representatives wrote in the Oct. 13 letter. “Forced arbitration is a private system that is fundamentally inferior to the American justice system.

Unlike America’s civil justice system, that was developed through centuries of jurisprudence, forced arbitration does not provide important procedural guarantees of fairness and due process that are the hallmarks of courts of law.”

Johnson has been an outspoken critic of forced arbitration and is the lead sponsor of the Arbitration Fairness Act in the House of Representatives. His office said involuntary arbitration clauses are hidden in the fine print of financial and service contracts, and that they prevent consumers — in this case nursing homes residents — from taking companies to court if they believe the business has violated the law.

“We should do everything in our power to protect nursing-home residents, who are often admitted directly from a hospital with existing health conditions, against abuse,” Johnson said in a statement. “Unless CMS issues a rule that empowers nursing home residents to arbitrate claims after they arise, countless Americans in nursing homes stand to lose access to the courts for every conceivable injury that they could suffer at the hands of unscrupulous care givers and facility operators.”

Arkansas Matters reported the tragic case of a resident at Cumberland Nursing Home in Little Rock.  Darrick Blair’s mother was neglected which caused the development of preventable pressure ulcers or bed sores.  Complaining to management, Darrick said his family didn’t see any change. His mother was later taken to UAMS for treatment.  However, the worst part is the facility tried to evict her while she was at the hospital getting care and treatment needed as a result of Cumberland’s negligence.

Darrick said, “Katie the UAMS social worker called and told me Cumberland wasn’t taking her back and the reason why the guy didn’t know why.”  According to the Department of Human Services, residents should be given 30 days notice if being discharged.  Which Darrick says his mother never received.  Filing with DHS, Darrick recieved a letter saying problems were found with Cumberland and his complaint was substantiated.

“It’s not only just for my mother it’s for other people in there that don’t have a voice,” said Darrick. “These are papers for the time my mother was in there every accident that went on we wrote it down.”  Now he is fighting so that this doesn’t happen to another family.