The Centers for Medicare & Medicaid Services (CMS) issued proposed revisions to arbitration agreement requirements for long–term care facilities. These proposed revisions would increase transparency in the arbitration process, reduce unnecessary provider burden and support residents’ rights to make informed decisions about important aspects of their health care.

Proposed Revisions to Arbitration Requirements

This proposed rule focuses on the transparency surrounding the arbitration process and includes the following proposals:

  • The prohibition on pre–dispute binding arbitration agreements is removed.
  • All agreements for binding arbitration must be in plain language.
  • If signing the agreement for binding arbitration is a condition of admission into the facility, the language of the agreement must be in plain writing and in the admissions contract.
  • The agreement must be explained to the resident and his or her representative in a form and manner they understand, including that it must be in a language they understand.
  • The resident must acknowledge that he or she understands the agreement.
  • The agreement must not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including federal and state surveyors, other federal or state health department employees, or representatives of the State Long–Term Care Ombudsman.
  • If a facility resolves a dispute with a resident through arbitration, it must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.
  • The facility must post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors.

 

The D.C. Circuit, divided, ruled for the National Railroad Passenger Corp.—Amtrak—in a dispute over the firing of an officer named Sarah Bryant. An arbitrator said Bryant, fired for misconduct in 2012, should receive reinstatement, with back pay and lost seniority. A Washington federal trial judge later vacated that award.

Bryant, through the Fraternal Order of Police, appealed to the D.C. Circuit. The arbitrator had said the internal investigation violated a part of the collective bargaining agreement that governs interrogations. Two judges on the D.C. Circuit panel, A. Raymond Randolph and Brett Kavanaugh, said Amtrak’s inspector general’s office was not bound by that rule in the agreement.

Judges don’t have much flexibility when it comes to vacating arbitration awards. Randolph and Kavanaugh turned to one rarely used exception—for “public policy.” That exception gives judges the power to strike an award that is contrary to “law or public policy.”  The exception can overturn an arbitration award on grounds that it violates a law or compels an employer to violate a law.

Randolph, writing for the majority, said the exception should be applied in Bryant’s case because the court would essentially be enforcing an illegal contractual obligation. The inspector general should not have been restricted by any rules created in collective bargaining agreements to conduct investigations.

“An arbitration award may not be enforced if it transgresses well defined and dominant laws and legal precedents,” Randolph said in the opinion.

Paul Bland from Public Justice wrote an article on the DailyKos about Trump’s plan to revoke the rule prohibiting mandatory pre-suit arbitration clauses in nursing home contracts. Bland wrote:

Some of the most heart-wrenching stories of abuse, mistreatment and neglect you’re likely to hear involve nursing homes. As America’s baby boomers age, and nursing home populations continue to grow, big corporations have, not surprisingly, started to take note. In fact, the vast majority of nursing homes in the United States – 70%, according to the Centers for Disease Control and Prevention – are run by for-profit corporations, and an increasing number of homes are being snapped up by Wall Street investment firms.

And that, in turn, can often mean that high quality care takes a backseat to high profits.

Increasingly, these giant corporations are using forced arbitration clauses — contract terms that say that people cannot sue them, no matter what laws they break, and instead people harmed by illegal acts can only bring cases before private arbitrators who are generally beholden to the corporations. These clauses make it far harder for the victims of mistreatment to hold a facility accountable where there’s abuse or serious negligence, and they minimize the incentive to provide the highest quality of care.  The secretive arbitration system also effectively lets homes sweep the facts about problems under the rug, so that the public and regulators never learn about widespread or egregious abuses.

That’s why, in 2016, the Centers for Medicare and Medicaid Services said nursing homes should no longer receive federal funding if they use arbitration clauses in their contracts. It was a commonsense proposal that would ensure families can hold nursing homes accountable for abuse and neglect. The government essentially said – and rightly so – that protecting desperately vulnerable people is more important than squeezing out an extra percentage of profit for hedge fund owners.

But that was 2016. Now, the Trump Administration appears to be gearing up to kill the proposal.

Senator Al Franken (D-MN), a fierce opponent of arbitration who has fought corporate lobbyists to protect Americans’ right to their day in court, said on Tuesday that “the Trump Administration is planning to lift the ban on nursing home arbitration clauses.”

So the White House, it appears, is ready to deliver another gift to hedge funds and banks – the corporate entities that increasingly control the nursing home industry – at the expense of the sick and elderly and their families.

It’s no wonder why corporate lobbyists working for the nursing home industry have made killing the CMS proposal a top priority: unlike the public court system (where trials are open to the public, press and regulators), nursing homes benefit enormously from the secretive system of arbitration, where the facts about abuses can be (and often are) buried. “Confidentiality” provisions – which really translate into gag orders – and non-transparent, non-public handling make it easier for systemic problems to stay hidden, and to continue.

If nursing homes are permitted to continue opting out of the civil justice system, we can expect to see lower levels of care, and higher numbers of preventable injuries and deaths. If they succeed in keeping families out of court, the potential savings to their bottom line are enormous when you consider that abuse is very widespread (according to the government’s own study).  Public Justice, our national public interest law firm and advocacy organization, set forth an extensive factual and legal case in support of the CMS proposal, where a great deal more background is available.

Consider just a handful of the plaintiffs who were able to successfully challenge nursing homes in court:

  • A 90-year-old woman allowed to languish with a festering pressure sore, acute appendicitis, and a urinary tract infection so severe it has entered her blood.
  • A diabetic patient injected with the incorrect dose of insulin, sending them into hypoglycemic shock and causing brain damage.
  • An 81-year-old man who was viciously beaten by a roommate who’d been involved in 30 assaults prior to moving in with the victim.
  • An 87-year-old woman whose calls for help were ignored after she fell and broke her hip.

Had any of those patients been subject to an arbitration clause – as no doubt many future cases would be if the Administration folds to pressure from for-profit homes – they likely would have never had a chance to have their case heard by a jury.

Nursing homes have complete control over some of the most vulnerable and fragile people in the entire country: people who are gravely ill, who are often cognitively impaired in ways that make it hard for them to protect themselves, are completely at the mercy of these institutions.

Now, rather than working to give those patients some small measure of protection and security, the Trump Administration is poised to give them the shaft. It’s unconscionable back-pedaling that would leave millions with little recourse when they, or their loved ones, are mistreated or abused.

McKnight’s reported that the Trump Administration is trying to roll back protections for nursing home residents by reversing a federal ban on pre-dispute arbitration agreements in nursing homes.   Sen. Al Franken (D-MN) said the proposal was a “misguided decision” on the part of the administration.

Until last year, many long-term care contracts were riddled with fine print that prevented residents and families who were wronged from seeking justice in court,” Franken, an outspoken opponent of arbitration agreements, said in a statement released last Thursday. “But now the Trump Administration is planning to lift the ban on nursing home arbitration clauses, which would be terrible for consumers,” Franken said.

He authored a bill introduced in March that would ban any arbitration agreements made before employment, consumer or civil rights disputes arise.

Democrats reintroduced federal legislation aimed at limiting the use of forced arbitration clauses, arguing they prevent Americans from seeking justice through the court system. U.S. Sens. Al Franken, D-Minn., and Patrick Leahy, D-Vt., along with U.S. Rep. Hank Johnson, D-Ga., introduced the Arbitration Fairness Act of 2017.

The legislation, previously introduced in 2011 and 2015, would eliminate forced arbitration clauses in employment, consumer, civil rights and antitrust cases. The Arbitration Fairness Act, like the Federal Arbitration Act’s original intent, would require agreements to arbitrate employment, consumer, civil rights or anti-trust disputes be made after the dispute has arisen. The bill would not prohibit arbitration, but instead ensure that individuals have a meaningful choice about how to proceed with their claim.

“For years, I’ve been fighting to re-open the courtroom doors to consumers, workers, and small businesses in Minnesota,” said Franken, a member of the Senate Judiciary Committee. “Our legislation, the Arbitration Fairness Act, would help restore everyday Americans’ right to challenge unfair practices in court and ensure meaningful legal recourse.

“We’re at a point where big corporations can write their own rules and insulate themselves from liability for wrongdoing. That needs to change.”

“Forced arbitration closes the courthouse doors to Americans wishing to seek justice for a variety of civil claims, including sexual harassment and workplace discrimination,” Johnson said. “These arbitration clauses are often unwittingly entered into by consumers when they sign everyday contracts such as cell phone, car rental, credit card and nursing home agreements to name a few.”

The Georgia congressman argues forced arbitration undermines fundamental rights and protections guaranteed by the Constitution, federal and state law.

Contrary to popular belief, arbitration decisions are final, binding, non-appealable, and strongly in favor of corporations,” he said. “The result is a secretive and rigged process that prevents citizens from exercising their fundamental 7th Amendment right to a trial by jury.”

Leahy agreed.  “These dangerous provisions force us to abandon our Constitutional right to protect ourselves in court, and instead send hardworking Americans to face wealthy corporations behind closed-doors in private arbitration,” he said. “This must change.”

 

 

 

Mcknight’s reported that the family of a deceased Kentucky nursing home resident will not have to arbitrate a dispute with the facility following a federal court’s ruling. The Kentucky case involves the son of Judith VanArsdale, a former resident of a Preferred Care facility. He filed a suit in state court claiming her death was caused by negligence.

Preferred Care filed a case in federal court seeking an order to compel arbitration of VanArsdale’s claims.  The facility where VanArsdale lived was taken over by Preferred Care two years after she was admitted. As part of that transition VanArsdale’s son, who had power of attorney, signed an arbitration agreement on her behalf.

The state court found that the arbitration agreement signed by VanArsdale’s son was not enforceable since Kentucky law did not give him authority to enter such an agreement on his mother’s behalf. The court also stayed the provider’s federal action pending the conclusion of the state suit. Preferred Care then sought an injunction from the U.S. District Court for the Eastern District of Kentucky.

The U.S. Court of Appeals for the Sixth Circuit agreed with the District Court’s decision to decline the provider’s injunction, citing the previous opinion that VanArsdale’s son lacked the authority to sign the arbitration agreement. The appeals court’s ruling puts the federal case on hold until the state case is resolved. This is the second arbitration-related court case involving Preferred Care in recent weeks. The Sixth Circuit last Wednesday denied a request from a resident’s estate seeking to appeal a lower court decision that required them to arbitrate their dispute.

Arbitration clauses in nursing home agreements attempt to include wrongful death but the majority of states do not hold that the beneficiaries are bound by the agreement.  The Pennsylvania Supreme Court has recently addressed this issue in Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa. 2016). In that case, the resident’s family members sued the nursing home for the wrongful death of their loved one and as representatives of the resident’s estate.

In the wrongful death action, the plaintiffs sought compensation for the emotional harm they sustained from losing their loved one prematurely. The survival suit relates to the resident’s compensation for pain and suffering and other harms sustained from the neglect.

The agreement between the resident and the nursing home contained an  arbitration clause that covered any resident’s suit against the nursing home. However, this clause applies to the survival action only, but not to the wrongful death suit filed by the nonparties to the agreement.

The wrongful death action must go to court. The survival action goes to arbitration.

The Court reasoned that –

“We recognize that Rule 213(e) is a procedural mechanism to control case flow, and does not substantively target arbitration. However, the Supreme Court directed in Concepcion that state courts may not rely upon principles of general law when reviewing an arbitration agreement if that law undermines the enforcement of arbitration agreements. We cannot require a procedure that defeats an otherwise valid arbitration agreement, contrary to the FAA, even if it is desirable for the arbitration-neutral goal of judicial efficiency. See Concepcion, 563 U.S. at 351, 131 S.Ct. 1740 (“States cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons.”). Declining to bifurcate the wrongful death and survival actions against Extendicare in the interest of efficiency would nullify the ADR Agreement, a result not permitted by the Supreme Court’s FAA jurisprudence. …. Collectively, Moses H. Cone, Dean Witter and KPMG instruct that the prospect of inefficient, piecemeal litigation proceeding in separate forums is no impediment to the arbitration of arbitrable claims. Indeed, where a plaintiff has multiple disputes with separate defendants arising from the same incident, and only one of those claims is subject to an arbitration agreement, the Court requires, as a matter of law, adjudication in separate forums.”

 

The Star-Tribune had an article about one family’s fight for justice for their neglected dad.  Gerald Seeger was a resident of an assisted living facility, Lighthouse of Columbia Heights.  The facility failed to respond promptly when Seeger, repeatedly vomited and screamed for help while pointing to his badly swollen stomach. After hours of suffering, Seeger died of complications related to a common hernia. State investigators later cited the facility for failing to provide timely medical care.

In 2014 when Joan Maurer arrived at her father’s room at Lighthouse. She was shocked by what she found. Her father, a florist who just a week earlier had been laughing and stomping his foot to old-time music, had turned ashen and was vomiting in plastic cups, she said. Photographs from that day show that his stomach had swollen like a balloon.  Despite Seeger’s visible suffering, the staff had not called for emergency help.

“I knelt by his side, grabbed his hand and said, ‘Dad, I’ll get you to a hospital.”  Maurer called 911, and on the ambulance ride to the hospital, Seeger rated his pain as a “10 out of 10” on the pain scale, state records show. “I was horrified,” Maurer said. “I never want to see another human being in that much pain for as long as I live.”

Investigators from the state Department of Health later found multiple lapses in Seeger’s care. Despite a history of hernia problems, staff at the senior home failed to follow a physician’s instructions and notify medical professionals immediately if he had any pain or tenderness in the groin area, state records show. On the evening and overnight shift before he died, Seeger complained of stomach pain and vomited; but such symptoms were not promptly reported to a nurse, state investigators found.

His daughter had a strong legal case so she sued over the sudden death of her father.  But Maurer is still fighting for a chance to hold Lighthouse accountable in court. Attorneys for the facility claim that she forfeited the constitutional right to sue when she signed a densely worded contract that forced the family into private arbitration if a dispute arose, even one involving a wrongful death claim.

I never believed they would arbitrate my father’s life like he’s a piece of paper, and not a living, breathing human being,” said Maurer.

Over mounting objections from consumer groups and regulators, arbitration agreements like the one Maurer signed are proliferating in the senior care industry. Hundreds of Minnesota nursing homes and assisted-living centers now request that elderly people sign arbitration clauses on admission. The clauses require them to forfeit their right to a court hearing and, instead, lock elderly residents into a secretive process for resolving claims. Even in cases of extreme neglect and death, nursing homes use the clauses to block residents and their families from pursuing lawsuits.

 In Minnesota and nationally, more attorneys are seeking to throw out arbitration clauses, particularly in cases where there is evidence that elderly residents were coerced into signing the contracts. In a recent case, the Kentucky Supreme Court refused to enforce arbitration agreements in three wrongful-death cases, ruling that legal representatives of nursing-home residents lack the authority to waive another’s “God-given right” to a jury trial.
UNITED HEALTH SERVICES OF GEORGIA, INC. ET AL. V. NORTON ET AL. (S16G1143)

PruittHealth, Inc. is frivolously appealing a Georgia Court of Appeals decision allowing a man’s wrongful death lawsuit on behalf of his deceased wife to proceed in court against one of its nursing homes, even though his wife had allegedly signed an arbitration agreement when she entered the home.

FACTS: From April 2013 until her death in April 2014, Lola Norton lived at PruittHealth-Toccoa nursing home, which is owned and managed by United Health Services of Georgia, Inc. While in the facility, Lola allegedly suffered injuries and harm, including falls, fractures, weight loss, and ultimately death. Following her death, her husband, Bernard Norton through his son and power of attorney, Kim Norton, filed a lawsuit claiming several causes of action including wrongful death, and alleging that all of Lola’s injuries and death were the result of the nursing home’s inadequate care and inadequate staff.

The lawsuit was against PruittHealth, United Health Services and seven other defendants who are affiliates or employees of PruittHealth. In response, the defendants filed a motion asking the court to dismiss the case, or in the alternative, to stay the proceedings and compel arbitration. The trial court granted their motion and compelled the entire case and all its claims to arbitration. Norton and his family appealed, and the Court of Appeals partially reversed the trial court’s ruling.

While the Court of Appeals found that the estate claims were barred by the arbitration agreement, it reversed the trial court’s order compelling arbitration of the wrongful death claim. The appellate court found there was no evidence that Lola’s wrongful death beneficiaries had entered into an agreement of their own to arbitrate their separate, distinct claims. United Health Services, PruittHealth and the others now appeal to the Georgia Supreme Court, which has agreed to review the case to determine whether an arbitration agreement signed by a person during her lifetime, which binds her and her estate to arbitration in the event of a dispute, is enforceable against her beneficiaries in a wrongful death action.

Attorneys for the Nortons argue the Court of Appeals correctly determined that wrongful death beneficiaries who are not parties to an arbitration agreement are not required to arbitrate their claims. “The Federal Arbitration act does not mandate enforcement of the arbitration agreement in this matter,” they argue in briefs. “Here, Lola Norton’s wrongful death beneficiaries were not parties to the arbitration agreement” she had signed during her lifetime, and Lola “did not have the authority to send her wrongful death beneficiaries’ claims to arbitration.”

Georgia law also does not require enforcement of the arbitration agreement against the wrongful death beneficiaries in this matter, the lawyers contend. United Health Services and the others incorrectly argue the Court of Appeals erred by treating arbitrations differently than other contracts. Under Georgia Code § 13-3-1, a valid contract contains three elements: subject matter of the contract, consideration, and mutual assent by all parties to all contract terms. “Lola Norton’s wrongful death beneficiaries were not parties to the arbitration contract at issue and, like any other contract related to the forum or any other procedural defense, there is simply no contract regarding their claims,” the attorneys contend.

“Wrongful death claims are required to be brought by a different party than survival/estate claims, have separate damages, and a separate statute of limitations.” “Since wrongful death beneficiaries have their own separate and distinct claim, it is also logical that they should have a say in where and how their claim will be litigated,” the family’s attorneys argue. “Wrongful death beneficiaries cannot lose their right to choose their forum or whether to arbitrate their claims if they did not…sign a contract or agreement to arbitrate.” Finally, courts in other states have reached a similar conclusion as the Georgia Court of Appeals regarding wrongful death beneficiaries’ claims, the attorneys contend.

 

Consumer Voice, in partnership with Justice in Aging, has released a new fact sheet entitled “Why-the-Recently-Revised-Nursing-Home-Regulations-Are-Vital-for-Nursing-Home-Residents

After four years of work from the Centers for Medicare & Medicaid Services (CMS), newly revised federal nursing facility regulations were released in September, and most provisions went into effect on November 28.  These revised regulations provide critical consumer protections.  This fact sheet provides an overview of some important new revisions and how they protect long-term care consumers.  Stakeholders and policymakers can use the fact sheet to better understand the role the revised regulations have in improving nursing care, including an increased focus on addressing a resident’s needs and preferences.

Protections Include:

Greater focus on addressing a resident’s individual needs and preferences. A nursing home must learn more about who the resident is as a person, provide greater support for resident preferences, and give residents increased control and choice.

Prompt development of a care plan. The original regulations allowed a resident to be without a care plan for as long as 21 days following admission. Now, a facility must develop and implement a care plan within 48 hours of a resident’s admission.

More comprehensive care. Treatment and services have been expanded to include pain management, dialysis, and behavioral health services.

Improved training. Training requirements have been expanded to apply to all staff, contractual employees, and volunteers. Mandatory topics include communication, residents’ rights, and prevention of abuse, neglect and exploitation. Training for nursing assistants is expanded to include dementia management and resident abuse prevention.

Improved protections against abuse, neglect and exploitation. A nursing home must not employ a licensed individual with a disciplinary action, and must report suspicions of a crime to law enforcement and the state survey and certification agency.

Better protection of resident property. Nursing homes are now required to take reasonable care of resident belongings and can no longer seek waivers of their responsibility for lost or stolen property.

Increased visitation rights. A resident can accept visitors at any time of the day.

Protection against evictions. Eviction for non-payment is not allowed when a third-party payor (such as Medicaid) is evaluating a claim for payment. For evictions based on a nursing home’s supposed inability to meet a resident’s needs, the nursing home must document its attempts to meet the resident’s needs, and the ability of a receiving nursing home to meet those needs.

Limiting nursing home’s ability to “dump” a resident at the hospital. In an effort to evade eviction safeguards, some nursing homes “dump” residents by refusing to readmit them from hospitalizations. Now, a nursing home must follow eviction procedures and give a hospitalized resident an opportunity to appeal, when the nursing home claims that the resident cannot return.

Prohibiting forced arbitration of claims of misconduct. Currently, many nursing home admission agreements compel a resident to bring any future claims about abuse, neglect or other quality of care issues through private arbitration. The revised regulations prohibit nursing homes from forcing residents to arbitrate disputes, but allow voluntary arbitration agreed to after a dispute arises.