The National Law Review had an article about the American Bar Association’s views on forced arbitration in nursing home admission contracts. “In a recent letter, the American Bar Association (ABA) advocates for the Centers for Medicare and Medicaid Services (CMS) to retain its current rule prohibiting long-term care facilities from entering into binding arbitration agreements with residents until after a dispute arises. In the letter sent to CMS administrator Seema Verma, the ABA writes that implementing the proposed rule would harm residents’ rights and interests.”
The ABA takes the position that the current rule follows the recent United States Supreme Court interpretation of the Federal Arbitration Act in Kindred Nursing Centers v. Clark. The ABA states that while Kindred prohibits singling out arbitration agreements for disfavored treatment, the Supreme Court did not single out arbitration agreements for favored treatment. Trump is proposing to implement a “total embrace of mandatory pre-dispute arbitration provisions” in nursing home admissions contracts, wrote Thomas M. Susman, director of the ABA’s Governmental Affairs Office.
The North Carolina Health News reported that CMS wants to regulate clauses in nursing home contracts known as pre-dispute mandatory arbitration agreements.
The Trump administration wants to not only reverse the ban, but proposes to prohibit any bans on the practice from being written into any statutes. “The issue is that [pre-dispute arbitration agreements] are being required before any dispute has happened,” said Lori Smetanka, head of The National Consumer Voice for Quality Long-Term Care.
“When a consumer signs admission papers for themselves or a loved one into a nursing home, these clauses are often present amongst the dozens of pages of legalese in the contract. Such provisions eliminate the opportunity for a consumer who ends up in conflict with a nursing home to go to court.”
When neglect or abuse occurs, the victim only has the option for confidential arbitration, most often with an arbitrator retained by the nursing home company.
North Carolina Attorney General Josh Stein told NC Health News: “It’s fundamental in the U.S. that if a person has been harmed through the mistreatment or neglect of another that they can have their day in court. That’s what the original CMS rule provided and it’s what the new CMS rule undermines.”
The Huffington Post had an article from
Last month, the federal government signaled its intention to roll back protections critical to the health, safety and welfare of vulnerable nursing home residents. The rule they want to eliminate bans the use of pre-dispute arbitration agreements. These agreements require older adults, people with disabilities and their families to waive their rights to the judicial system before a dispute even arises. Then, any dispute, even abuse or neglect, and regardless of how egregiously they’ve been harmed, is forced into secretive arbitration proceedings.
Typical nursing home claims involve injuries such as pressure sores that lead to infection; amputated limbs; suffocation on bedrails and other restraints; choking;; sexual assault; renal failure and other conditions caused by dehydration; malnutrition; severe burns; gangrene; and painful, immobilizing muscle and joint problems resulting from long-term inactivity. All of these are avoidable conditions that are the result of negligence or even willful misconduct by long-term care facilities.
These forced arbitration agreements are presented to prospective residents and their families during the admission process, an extremely difficult and stressful time. Individuals typically feel compelled to sign because they are under extreme pressure to be admitted and the implied message is they must agree or be refused care. To make matters worse, under the recent government proposal, this message would no longer be implied. Nursing homes could refuse admission to a resident whose family, acting on their behalf, is unwilling to sign away their rights. This holds residents hostage – they must agree to give up their rights in order to have essential care and a place to live.
Arbitration stacks the deck against residents. The contracts typically allow the nursing home to select the arbitrator, the state in which the arbitration will occur and the rules for the arbitration process. There is a strong incentive for arbitrators to find in favor of the facility since this can assure them of repeat business. As a result, residents often lack meaningful ability to hold the nursing home accountable for mistreatment and harm.
Nursing facilities insert pre-dispute arbitration clauses in their contracts to ensure that they will never be held publicly responsible for their actions, and to limit any penalties imposed for wrongdoing. Arbitration proceedings are held behind closed doors and are confidential. The public, including those looking for a nursing home – will never know the nursing home’s full track record ― no matter how bad ― because it is hidden. Arbitration shields poor performing facilities from the negative impact on their reputation, public opinion and pressure that could serve as a deterrent to substandard care.
The U.S. Census Bureau estimates that by 2030, one in every five U.S. residents will be 65 years or older; almost half of these Americans are likely to spend some time in a nursing home. We must stand together to protect the rights and care of frail, at-risk nursing home residents. More Americans must lend their voices to this cause. Tell our policymakers to reinstate the ban on mandatory pre-dispute arbitration agreements that protect nursing homes, but not those entrusted to their care.
The Times Leader reported that several Attorney Generals are banding together to protect vulnerable seniors from the Trump Administration’s reversal on banning forced arbitration onto unsuspecting nursing home residents.
Pennsylvania Attorney General Josh Shapiro and 16 other Attorneys General sent comments to the Center for Medicare and Medicaid Services, recommending that CMS keep in place a rule that prohibits pre-dispute arbitration clauses in nursing home and long-term care contracts. Pre-dispute arbitration clauses require seniors to waive their constitutional rights to go to court to resolve any dispute with a nursing home.
In the comments sent Monday to CMS, the attorneys general state:
“Pre-dispute binding arbitration agreements in general can be procedurally unfair to consumers, and can jeopardize one of the fundamental rights of Americans; the right to be heard and seek judicial redress for our claims. This is especially true when consumers are making the difficult decisions regarding the long-term care of loved ones. The contractual provisions may be neither voluntary nor readily understandable for most consumers.”
“I have the responsibility of protecting our most vulnerable citizens, including seniors living in long-term nursing care facilities,” Shapiro said in a news release. “If we allow nursing homes to include pre-dispute arbitration clauses in admission contracts, our seniors will have less access to the courts and to justice. I won’t stand by while seniors lose their rights.”
Commons Dreams had an article expressing disbelief with Trump’s plan to force nursing home residents into arbitration instead of protecting their constitutional right to a jury trial.
Rep. Ted Lieu asked “Why does Trump hate grandmothers?” as he decried a proposal from the administration that would prevent abused or mistreated seniors in nursing homes from getting their day in court, jeopardizing their health and safety.
Fellow lawmakers as well as patient and consumer advocacy groups like Public Citizen, said the effort to roll back protections from some of society’s most vulnerable people is just part of “a disturbing trend of the Trump administration attempting to reverse critical protections against forced arbitration,” which prevents individuals or groups of people from filing lawsuits or seeking damages for fraud, abuse, neglect, medical malpractice and other forms of wrongdoing.
“Forced arbitration clauses in nursing home agreements stack the deck against residents and their families who face a wide range of potential harms, including physical abuse and neglect, sexual assault, and even wrongful death at the hands of those working in and managing long-term care facilities,” the letter (pdf) states. “These clauses prevent many of our country’s most vulnerable individuals from seeking justice in a court of law, and instead funnel all types of legal claims, no matter how egregious, into a privatized dispute resolution system that is often biased toward the nursing home. As a result, victims and their families are frequently denied any accountability for clear instances of wrongdoing.”
Lauren Saunders, associate director of the National Consumer Law Center, said “Everyone should be outraged that the Administration is proposing to strip legal rights from fragile seniors and their families during the incredibly stressful time when a loved one is entering a nursing home.”
Benziga had an article about the National Academy of Elder Law Attorneys (NAELA) submitted a NAELA letter to CMS urging the agency to withdraw its new proposal to allow forced arbitration provisions in nursing home admission contracts to prohibit a trial by jury. Established in 1987, NAELA is a non-profit association that assists lawyers, bar organizations, and others. The mission of NAELA is to establish NAELA members as the premier providers of legal advocacy, guidance, and services to enhance the lives of people with special needs and people as they age.
“It’s very disheartening to see CMS’s about-face. The truth is individuals who need nursing home care are often under extreme duress to get admitted and cannot imagine they will be subject to the opposite: physical violence, sexual abuse, or extreme neglect when they arrive,” said NAELAPresident Hyman G. Darling, CELA, CAP.
According to the letter, “if CMS cannot elucidate a precise reason as to why residents would now be better off giving up their rights before they might fully realize what they have lost, it cannot categorize this reversal as an improvement over anything.”
Forbes had an article criticizing the Trump’s Administration decision to allow nursing homes to restrict resident’s constitutional right to a jury trial.
When your loved one needs nursing home care but the facility requires you to sign a mandatory arbitration agreement that states you will not sue, even if your loved one gets mistreated, neglected or abused. If you sign the agreement, your only option may be “third party arbitration”. If you don’t sign, you may not be able to get your loved one into the right nursing home. What will you do?
President Barack Obama signed a Centers for Medicare and Medicaid Services (CMS) rule to help prevent such a scenario from happening. Obama’s rule would prevent any nursing home that receives Medicare or Medicaid funds (which is a lot of them) from enforcing such “no sue” agreements. But now this rule was overturned by President Donald Trump’s administration.
The conditions and quality of care at nursing homes are extremely variable, ranging from good to appalling. A study conducted by researchers from UCSF (Charlene Harrington,Helen Carrillo, and Taewoon Kang) and the University of California-Irvine (Brian Olney) published in Health Services Research found a number of staffing and quality of care deficiencies in many for-profit nursing homes.
According to the Centers for Disease Control and Prevention (CDC), each year 1 to 3 million serious infections occur in long-term care facilities with as many as 380,000 people dying as a result.
As the U.S. News and World Report described, a study published in the American Journal of Infection Control showed that about 15 percent of U.S. nursing homes were cited for lack of adequate infection control procedures.
As David Ruppe reported previously for ABC News, a Congressional study found that from January 1999 to January 2001, 30 percent of U.S. nursing homes had a total of nearly 9,000 cited instances of abuse with 1,601 cases causing harm or putting residents at risk for serious injury or death. And such abuse is not just out of neglect. Nursing home staff have assaulted and even sexually assaulted nursing home residents, as detailed in a story by Blake Ellis and Melanie Hicken for CNN .
Over 75 consumer groups have banded together to oppose changes to Obama’s rule. The Fair Arbitration Now (FAN) Coalition argued on their web site that retaining the right to sue is important protection for consumers:
Most people don’t know that forced arbitration clauses are buried in the fine print of many contracts to receive products and services, and even to obtain employment. These contract clauses force people to give up their right to go to court – even if a company harms them or rips them off. Instead consumers are pushed into secret arbitration. In arbitration there is no judge, jury, and decisions are rarely appealable. Arbitrators do not have to follow the law. Civil rights and consumer protection laws can become meaningless in arbitration. That’s why we need a federal law to make arbitration truly voluntary. Eliminating forced arbitration clauses from contracts will give us – consumers and employees – the power to choose court or arbitration after the dispute arises.
Dean Clancy at U.S. News wrote an article on the Republican’s decision to force mandatory arbitration on consumers including nursing home residents. Forced arbitration clauses waive a customer’s right to sue a company in case of a dispute. The clauses are imposed on consumers without informed consent, and are increasingly being used to shield corporate wrongdoing.
By “overturning the anti-forced arbitration regulation issued this week by Consumer Financial Protection Bureau, as congressional Republican leaders are reportedly rushing to do, would be a political and policy mistake.”
1. Unconscionable. Here are some examples of the kind of behavior CFPB’s reg is trying to prevent.
· Wells Fargo Bank admitted its employees systematically created millions of sham bank accounts in its customers’ names, and then in many cases fraudulently billed those same customers for fees and services they never agreed to. Executives of the megabank knew this was happening but did nothing. Then, they decided to blame 5,300 “rogue” employees, who were summarily fired. Now, to ward off thousands of lawsuits, the company is hiding behind binding arbitration clauses in its victims’ contracts.
· Roger Ailes, the now-deceased executive of Fox News, was accused, before his death, by multiple female employees of sexual harassment. To keep the women’s allegations out of court, and to forestall a long line of past accusers from taking the witness stand, he invoked clauses in his employees’ hiring contracts requiring any disputes be handled through a private, highly secretive arbitration process.
· Military readiness has been negatively affected by unscrupulous payday lenders who prey on military servicemembers and veterans. The victims become overly indebted thanks to exorbitant interest rates and hidden fees they don’t understand, and then find themselves unable to obtain relief thanks to forced-arbitration clauses. Because of this, the Military Coalition, which represents nearly 6 million uniformed service members, veterans and their families, has formally petitioned Congress to ban the clauses.
Question: If binding arbitration clauses are so bad, why are they so common? Because a series of Supreme Court rulings (the most recent one
in May) have effectively overturned the traditional common-law understanding of arbitration. In past centuries, arbitration was understood as a voluntary option that is fair only when both parties are of roughly equal bargaining power or else have agreed to it freely after
a dispute has arisen.
In lieu of that reasonable understanding, the Court has substituted a doctrinaire “right of contract” that allows a powerful party to effectively force a weaker party to waive his or her constitutional right to sue, before a dispute has arisen and often without informed consent. This transformation defies common sense and severely weakens Americans’ Seventh Amendment right to a jury trial.
Today, arbitration has devolved into a private star-chamber that’s stacked in favor of the accused corporation – which, unsurprisingly, usually wins.
Is the CFPB itself unconstitutional? Yes, in my opinion. But so is forced arbitration. And Congress has a duty to protect our right to a jury trial.
Instead of lashing out at the agency by overturning this regulation, Congress should do the right thing and amend the Federal Arbitration Act to make binding arbitration agreements truly voluntary for all Americans, as the Constitution requires. Having done so, it could then, at its leisure, reform (or, as I would prefer, abolish) the controversial agency.
3. A Political Loser. Those who vote to overturn the CFPB regulation will be placing themselves on the side of accused sexual harassers, corporate wrongdoers and unscrupulous payday lenders who exploit our troops.
If Republicans are politically sensible – or just have an ounce of self-respect – they’ll take the high road and let this reasonable rule stand.
Mother Jones had an article explaining how Trump sided with the nursing home lobby instead of vulnerable nursing home residents.
In October 2016, the Centers for Medicare and Medicaid Services (CMS) decided to push back on mandatory arbitration. By rule, CMS adopted a novel “condition of participation” for Medicare and Medicaid. Nursing homes that participate in the programs—which is to say, all nursing homes—could no longer ask their residents to sign away their right to sue upon entering the nursing home.
….Predictably, the nursing home industry sued, arguing that the rule exceeded CMS’s authority….Then President Trump took office. In early June, with little fanfare or notice, the administration dismissed the appeal and proposed to undo the change altogether. “Upon reconsideration, we believe that arbitration agreements are, in fact, advantageous to both providers and beneficiaries because they allow for the expeditious resolution of claims without the costs and expense of litigation.”
Forced arbitration clauses signed before admission (and before the claim arises) are not advantageous to nursing home residents. Arbitration is too expensive; discovery is limited; and arbitrator bias remains a problem. It is better to leave the choice of arbitration after a claim arises.
“But the extraordinary growth of mandatory arbitration over the past couple of decades is one of the more unnerving developments in modern American law. Genuine consent to arbitration is often fictional. Arbitrators tend to favor the repeat players who hire them—companies, not consumers. Arbitration agreements can forestall class action lawsuits, making it difficult or impossible to hold companies to account for small-in-size but widespread injuries. And where civil litigation can shine a light on shoddy business practices, arbitration is shrouded in secrecy.”
See full article from Nick Bagley at Take Care.
A Georgia appellate court rejected a nursing home operator’s attempt to arbitrate wrongful death allegations brought by the daughter of a late patient, affirming a lower court’s finding that the arbitration agreement at issue was unenforceable because the deceased hadn’t signed it herself. See Decision.
Writing for a unanimous court, Judge Christopher J. McFadden said the trial court was correct in shooting down the agreement from United Health Services of Georgia Inc. that was signed by a daughter of Doris Alexander, a nursing home resident who died from neglect.
“The arbitration agreement provided that it was voluntary and not a precondition to admission to the nursing home, that the parties waived the right to a jury trial and instead agreed to have any future disputes between them resolved by binding arbitration, that an arbitration decision would be final and unappealable, that the agreement was governed by the Federal Arbitration Act and not by the Georgia Arbitration Act, and that the patient/resident could revoke the agreement within 30 days of signing it. Carol Alexander signed the agreement on the line designated for the signature of the patient/resident. Doris Alexander was not present when her daughter signed the arbitration agreement, Carol Alexander never showed or discussed the arbitration agreement with her mother, and Doris Alexander never signed the agreement herself.”
“Based on the arbitration agreement, United Health and other defendants filed a motion to dismiss or, alternatively, to stay proceedings and compel arbitration. After a hearing, the trial court denied the motion, finding that there was no valid and enforceable arbitration agreement because Carol Alexander did not have the authority to sign the arbitration agreement on her mother’s behalf.”