Why Let Nursing Homes Avoid Litigation?

Los Angeles Times

Health care, tax reform and the debt ceiling probably will be among the highest-profile issues when Congress returns from a monthlong recess on Tuesday.

But Democratic lawmakers and consumer advocates already have served notice that they’re also going to keep a spotlight on protecting people’s right to sue nursing homes for neglect or abuse of elderly patients.

The Trump administration, through the Centers for Medicare and Medicaid Services, announced in June its intent to roll back legal rights for consumers put in place under the Obama administration. Those rights include prohibiting any nursing home that receives federal funding — which is most of them — from requiring that disputes be addressed through mandatory arbitration rather than the legal system.

Thirty-one senators have written to CMS Administrator Seema Verma during the August recess calling on her to abandon plans to once again allow nursing homes to include mandatory arbitration provisions in their contracts.

“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 lawmakers said.

“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.”

In a separate letter, three dozen consumer groups and social justice organizations called the proposed change “cruel” and said it was “a disturbing new direction for CMS, which should be protecting patients, not making it easier for facilities to harm them and cover it up.”

“Placing a parent or loved one in a nursing home is already one of the most difficult things anyone will ever have to do in life,” they said. “But forcing the patient or family member to then sign something that violates the resident’s legal rights should they suffer future abuse or serious neglect is a horrific thing to do to families.”

The attorneys general of California and 15 other states, along with the District of Columbia, also submitted opinions last month calling on CMS to maintain the right to sue as a crucial means of holding nursing homes accountable for the welfare of residents.

A CMS spokesman, requesting anonymity for no particularly good reason, told me the agency stopped accepting feedback on the matter as of Aug. 7 after receiving “over 1,000 public comments.” He noted that, under federal law, CMS has three years from release of the proposed change in June to issue a final rule, though a decision could come at any time.

The nursing home industry is by no means alone in preferring arbitration for dispute resolution and denying people their day in court. Mandatory arbitration is a routine feature of contracts for telecom companies, credit card issuers and numerous other businesses. Companies argue that consumers benefit from faster, cheaper arbitration proceedings, rather than having cases tied up in courts for possibly years and sharing any monetary awards with lawyers.

Yet with exquisite irony, the American Health Care Association, a nursing home industry group, took its case to court before the Obama administration’s rule could take effect in November. A federal court granted the association’s request for an injunction so the industry’s lawyers could litigate the matter.

Mark Parkinson, chief executive of the association, said at the time that “study after study shows that arbitration is fair and speeds judgments in a cost-effective manner that benefits those injured more than anyone else.”

In fact, study after study shows that consumers typically get the short end of the stick in arbitration. The advocacy group Public Citizen found that, over a four-year period, arbitrators ruled in favor of banks and credit card companies 94 percent of the time in disputes with California consumers. A 2015 study by the Consumer Financial Protection Bureau found that in grievances with financial services firms, “class actions provide a more effective means for consumers to challenge problematic practices by these companies.”

One key reason: Arbitrators’ fees usually are paid by the businesses, not the consumer. If an arbitrator wants more cases, he or she has a strong incentive to make the company happy.

You could argue that nursing homes are the last places you want to keep disputes under wraps. Such secrecy clearly does little to promote safety and accountability.

As of 2014, there were nearly 16,000 nursing homes nationwide with 1.4 million residents, according to the Centers for Disease Control and Prevention. A report that year by the Department of Health and Human Services found that 33 percent of nursing home residents experienced “adverse events” or “temporary harm.” Investigators attributed much of the harm to “substandard treatment, inadequate resident monitoring, and failure or delay of necessary care.”

The Department of Justice determined that “most adverse events in nursing homes — due largely to inadequate treatment, care and understaffing — lead to preventable harm and $2.8 billion per year in Medicare hospital costs alone.”

Such shameful stats are why the nursing home industry is fighting so aggressively to block residents and their families from being able to sue. It has spent about $8 million on lobbying activities over the last two years, according to the Center for Responsive Politics.

It’s also what the Trump administration is talking about when it says — as it did in June — that restoring mandatory arbitration would “reduce unnecessary provider burden.”

That’s a pretty coldhearted way of saying you’re going to look after the financial interests of an industry that may be abusing hundreds of thousands of seniors annually.

I suspect most nursing home residents and their kin would say this in response: These companies would have nothing to worry about if they did an adequate job of keeping people safe.

That’s not too much to ask.

David Lazarus can be reached at david.lazarus@latimes.com.