South Carolina Nursing Home Blog : South Carolina Nursing Home Lawyer & Attorney : Poliakoff & Associates Law Firm : Elderly Care, Senior Care

The Arbitration Fairness Act of 2013 was introduced in Congress.  The House bill had 22 cosponsors and the Senate bill had 17 cosponsors to reintroduce the bill in the 113th Congress.

See press release from Take Justice Back.

The Facts

•The AFA would eliminate forced arbitration in employment, consumer, civil rights, and anti-trust cases.
•The AFA would ensure that the decision to arbitrate is truly voluntary.
•The AFA would restore fundamental rights created by state and federal laws that are currently at risk of being wiped out by forced arbitration.

1. Contact your member of Congress today and tell them you support the legislation.

2 Send an email to Congress through Take Justice Back: http://ow.ly/kNOXh

3. Ask your friends and colleagues to act.

4 Share the Take Justice Back action item with them: http://ow.ly/kNOXh

5. Spread the word--Email the press release to your colleagues and media contacts.

6 Share this Facebook post: http://ow.ly/kNPpN

7 Retweet on twitter: http://ow.ly/kNP4F

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The Orlando Sentinel reported on the recent Florida Supreme Court decision permanently altering contract law in Florida. In a giant win for the nursing-home industry and a loss of Florida elderly consumers, the state Supreme Court decided that a lawsuit stemming from the wrongful death of a nursing-home resident must go to mandatory arbitration despite the lack of a proper signatory.

Debra Laizure, whose father, Harry Stewart, died in 2006, about four days after being admitted to the Avante at Leesburg nursing home, pursued a wrongful-death case against the facility.  Laizure did not sign the arbitration agreement when her father entered the nursing home.  Stewart was admitted to the nursing home after undergoing knee surgery at Leesburg Regional Medical Center.  Stewart developed a horrific infection because of neglect at the nursing home.  He was transferred back to the hospital before dying.

Mandatory arbitration agreements strip away people's rights to jury trials.  Most nursing-home residents and their families do not understan arbitration when the documents were signed.  The senior-advocacy group AARP filed a brief on behalf of Laizure, who is the representative of Stewart's estate.  The Florida Health Care Association, a nursing-home industry lobbying group, filed a brief supporting mandatory arbitration agreements.

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The Daily Mall reported the ongoing battle between the West Virginia Supreme Court, the U.S. Supreme Court and the nursing home industry attempting to take away resident's right to a jury trial by hiding pre-dispute mandatory arbitration clauses in admission paperwork.  Critics argue the arbitrators are beholden to the companies that give them repeat business. "The state's high court is obviously dubious of an emerging and parallel system of justice in America: arbitration hearings." "People who sign these agreements - often without knowing they are doing so - are giving away their right to jury trials. Instead, they agree to leave things in the hands of private arbitration judges."

In summer 2011, the court said: "Disputes should be decided by juries of lay citizens rather than paid, professional fact finders who may be more interested in their fees."  The nation's high court said in early 2012 that Ketchum's ruling that all nursing home arbitration clauses are "per se" unconscionable was "incorrect and inconsistent" with federal law.  The W. Va.  Supreme Court  found a new way to ensure some bereaved family members can sue nursing homes in normal courtrooms with jury trials. The court's most recent ruling said people who check their relatives into nursing homes as a health care surrogate couldn't sign away a resident's right to a jury trial. This means an untold number of arbitration agreements are unenforceable unless the resident or legal representative signs the arbitration clause. Arbitration agreements (like any other contract) are not valid or legally enforceable unless the signatory had legal authority.

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The Eleventh Circuit ruled in Green v. Cash Advance that the choice of NAF as the chosen arbitrator is an integral and material term of the arbitration agreement.  Since NAF can no longer conduct arbitrations, the contract is unenforcable as written.  Four years after the NAF was forced out of the consumer arbitration business, nursing homes still put NAF as the chosen arbitration forum.  The Court empasized the fact that the NAF was so corrupt being a reason to suspect that defendants didn’t just accidentally accept it.
 

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 The West Virginia Supreme Court of Appeals held that a resident's family may make health care decisions for persons not able to do so under the state's health care surrogates statute, but that agreeing to arbitration is not a "health care decision" of the sort authorized by the statute.  The resident is not bound by the arbitration clause in the admissions paperwork.  A family member (or similar person) who signs the paperwork for admission for incapacitated person to a nursing home or similar facility, they don't have the authority to agree to arbitration.

Here's a link to the decision:

http://www.courtswv.gov/supreme-court/docs/spring2013/12-0717.pdf

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The Consumer Voice published an interesting response to a recent study by AON Risk Solutions which argued that nursing homes are facing increased liability costs at the same time their revenue is being strained by funding cuts, particularly from a Medicare reimbursement reduction that went into effect October 1, 2011.  The industry hacks then said tort reform and pre-dispute mandatory arbitration agreements will somehow decrease health care costs.  As the Consumer Voice reports:

"Here’s what they do not tell you:

 This report is published with the American Health Care Association – the largest trade association representing the interests of many nursing homes.

 For the second time in FY 2012, publicly traded nursing home companies reported “profits that exceed expectationsi,” “surging operational incomeii” and “performance that outran fairly aggressive projections.”

 Medicare reimbursement rates for skilled nursing facilities are 3.4% higher in FY 2012 than in FY 2010 – even with the reduction effective October 1st, 2011.

 Seven states were chosen by Aon for the report. Why were these states chosen and not others? Does the report only examine states with the results Aon wants? How can the report be a “national study” if the information comes from just 7 out of 50 states?

 The report says it distributed a request for data to for-profit and non-profit providers. It does not state that the request for data was sent to all providers in the country or even all providers in the seven states highlighted in the publication. Did only certain providers receive the data request? Were those providers cherry-picked?

 The report fails to identify the providers from which claim data was collected and how
many providers were included from each state. Consequently, data from a state could
conceivably be drawn from a single provider with a poor history of care and therefore not
be representative of the state as a whole.

 According to the report, approximately 19,500 non-zero claims were aggregated.
However, the report’s definition of a claim is any demand. A demand is not always a
formal lawsuit and claims of all kinds, including lawsuits, may be dropped. How many
of the 19,500 claims were actual lawsuits that were settled or went to trial?

 The report’s own data contradicts the contention that tort reform has reduced costs.
o West Virginia enacted tort reform in 2003. However, the loss rate has shown “a
strong upward trend” (page 30).
o Georgia enacted tort reform in 2005, yet both the frequency of claims and the loss
rate has increased (page 18) since that year.

 According to the report, the data comes solely from 8 of the 10 largest providers in the
country. However, the size of providers varies across the U.S., and the average size
nursing home is only about 108 beds.v How can the report claim to represent the
“perspective of all long term care providers” when it does not include data from small
and medium-sized providers?

 “Claims” include very serious harm and injury to residents, and even cases of resident
death. Examples include pressure ulcers down to the bone, malnutrition, dehydration,
sexual assault, broken bones, falls, and severe infections.

 Tort reform is touted as a way to reduce healthcare costs. However, medical malpractice litigation is not responsible for rising healthcare costs: between 2000 and 2011, the value of medical malpractice payments fell 11.9 percent while healthcare spending nearly doubled, increasing 96.7 percent.  Furthermore, in Texas - the state the report cites as “the example for effective tort reform” - researchers have found that tort limitations have not saved money.

 Arbitration completely strips the resident or the resident’s family member of their constitutional right to a trial by jury. Arbitrators are private individuals who may be chosen by the nursing home – not publicly elected or appointed officials like judges. Arbitration can be very costly and is usually far more expensive than court.  Residents and families not only have to hire a lawyer, they generally have to pay a part of the arbitrator’s fee - which is like having to pay the judge. And once a decision is issued, consumers typically cannot appeal it like they can in the court system."
 

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Read everything before you sign on the dotted line. That is the lesson we can all learn from a recent NPR “Shots” article about arbitration agreements.  When you or a loved one is faced with entering a nursing home you will be handed a large stack of papers and a pen.  It will be an overwhelming amount of information, but in order to retain your rights as a patient, or the rights of your loved one, it is important to know what you are agreeing to.

One piece of paper most likely included in your welcome packet will be an arbitration agreement, which says that you agree to waive your constitutional right to a jury trial and arbitrate any dispute that may arise, instead of taking the case to court.  NPR suggests not signing this agreement, as it can lead to a victim receiving a reduced settlement or judgment.  One key factor of arbitration agreements is the “opt out” clause that should be included in the arbitration clause.  This clause allows for the signer to back out of the arbitration agreement within a certain number of days. This clause is good because it allows more time for consideration on the part of the resident or resident’s family members; however it generally makes the arbitration agreement as a whole more resilient in court.  It is important when signing legally binding documents to know your options.

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The National Consumer Voice for Quality Long Term Care wrote a great article on pre-dispute mandatory arbitration agreements in nursing home admission paperwork.

"Arbitration is a legal process in which a dispute is settled by one or more arbitrators who decide the outcome instead of a jury made up of members of the community. “Pre-dispute” arbitration means that the consumer must agree to arbitration before any dispute arises.  Pre-dispute arbitration agreements are increasingly included in nursing home and other long-term care facility admission contracts that consumers or their families must sign in order for the consumer to be admitted as a resident. Once signed, these agreements bar consumers from seeking legal action in court should they suffer harm or injury while residing in the facility."

Pre-dispute arbitration agreements:
              Place consumers at a disadvantage during the admissions process
-- Nursing home admissions are usually unplanned and often happen when individuals and their families are under pressure to enter into facility care as quickly as possible. Pre-dispute arbitration agreements are generally offered on a „take it or leave it‟ basis by facilities. Consumers may be forced into signing an arbitration agreement because “leaving it” and trying to find another place right then and there is not an option.
-- Arbitration agreements can often be buried within the fine print of admission contracts and may go unnoticed by many consumers given the huge amount of paperwork that must be signed during the admissions process

             Strip consumers of their constitutional right to a trial by jury
-- When consumers sign an arbitration agreement, they sign away forever their constitutional
right to a trial by jury. Such a decision should be given careful consideration. However,
individuals and their families are pressured into signing blanket arbitration agreements in
advance, without having any idea what they might be arbitrating and with only the
information the facility chooses to give them about what arbitration is about. No one can
make an informed decision under such circumstances!
 

           Deny consumers the benefits of a court of law
-- Unlike judges, arbitrators are private individuals who may be chosen by the nursing home –
not publicly elected or appointed officials.
o In arbitration, residents and families not only have to hire a lawyer, they generally have to pay
a part of the arbitrator‟s fee. This is like paying the judge – which consumers don‟t have to do
in court.
-- Arbitration can be very costly and is usually far more expensive than court. As a result,
arbitration may not be possible for many residents and families – leaving them with no legal
recourse.
-- The amount awarded to residents and families through arbitration is likely to be less than it
would be in court.
-- Consumers typically cannot appeal the arbitrator‟s decision as they can in the court system.

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The child of a deceased long-term care resident is not bound to an arbitration agreement because she signed it on behalf of her mother — not herself — an Illinois court ruled.

Following the death of her mother, Joyce Gott, at Odin Healthcare Center, Sue Carter filed a wrongful death claim and sought damages for negligent care against the parent company, SSC Odin Operating Company, LLC. Odin countered that Carter and Gott had signed binding arbitration agreements in 2005 and 2006.  The court, however, agreed with lower courts that Carter “cannot be compelled to arbitrate the wrongful-death claim against defendant.”

“Plaintiff, as Gott's personal representative in the wrongful-death action, is merely a nominal party, effectively filing suit as a statutory trustee on behalf of the next of kin,” Judge Mary Jane Theis wrote. “Plaintiff is not prosecuting the wrongful-death claim on behalf of Gott, and thus plaintiff is not bound by Gott's agreement to arbitrate for purposes of this cause of action.”

 

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NBC News had a great article from Kaiser Health News on the unfair and unconscionable practice of requiring nursing home residents to waive their constutional right to a jury trial in lieu of arbitration where an arbitrator decides the fate of the case.  Most residents don't realize that admission documents include an agreement that required disputes to be decided by a professional arbitrator rather than to court.

"A mandatory arbitration agreement is an often overlooked document in the package of admissions papers at many nursing homes these days. It can have an outsize impact if something goes wrong. But anxious seniors or their caregivers often sign every document that's put in front of them, perhaps only glancing at the content."

"Agreeing to arbitrate is generally not in families' best interests, say consumer advocates.  For one thing, it can be pricey. In addition to hiring a lawyer, the patient or family generally has to pay its share of the arbitrator's fee, which may come to hundreds of dollars an hour, says Paul Bland, a senior attorney at Public Justice, a public interest law firm based in Washington. Court proceedings are also conducted in a public courtroom and leave a detailed public record that can inform industry practice and help develop case law, say experts.  Not so with arbitration hearings, which are conducted in private and whose proceedings and materials are often protected by confidentiality rules. The amount awarded -- if any -- may also be less if an arbitrator hears the case than it would be if a case went to trial, say experts."

Aon Global Risk Consulting analyzed 1,449 closed claims involving long-term-care providers between 2003 and 2011 and found that there was no money awarded in 30 percent of claims where a valid arbitration agreement was in place, compared with 19 percent of claims in which there was no arbitration agreement or the agreement was determined to be unenforceable.

Likewise, nearly 12 percent of claims without arbitration agreements resulted in awards of $250,000 or more, compared with 8.5 percent of claims with arbitration agreements.

There's a simple way to avoid being forced into arbitration, say experts: Don't sign the arbitration agreement. It's not a condition of admission to the facility.

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