Democrats Push to End Arbitration Clauses in Nursing Home Contracts

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By Michael D. Williamson

Oct. 15 — The CMS should ensure that nursing home residents can only enter into arbitration agreements voluntarily and after a dispute occurs, Democratic state and federal officials told the agency Oct. 14.

Separate letters from 26 Democratic House members and 16 state attorneys general urged the Centers for Medicare & Medicaid Services to prohibit pre-dispute arbitration clauses in long-term care facility (nursing home) admission contracts.

The officials said the CMS included language in a proposed rule to improve awareness of pre-dispute arbitration clauses among incoming long-term care facility residents. However, that language doesn't adequately protect residents' rights and the clauses should be eliminated from all admission forms and contracts, the lawmakers and attorneys general said. The House lawmakers said that “[f]orced arbitration is a private system that is fundamentally inferior to the American justice system.”

Also criticizing the proposal, but for different reasons, was the nursing home industry. The American Health Care Association (AHCA), a nursing home industry group, told the agency Oct. 14 that it doesn't have the authority to regulate the use of arbitration agreements by nursing homes. The AHCA said the agency's arbitration-related proposals should be withdrawn. The AHCA letter also said that a request from a trial lawyers' group “served as the catalyst for CMS’s arbitration-related proposals.”

Medicare, Medicaid Participation

The CMS included the arbitration provisions in a July proposed rule (80 Fed. Reg. 42,168) that would revise the requirements that more than 15,000 long-term care (LTC) facilities must follow to participate in the Medicare and Medicaid programs. Among other changes, the rule would ensure nursing home staff members are properly trained on caring for residents with dementia and in preventing elder abuse.

Comments (docket CMS–3260–P) were originally due Sept. 14, but the CMS extended that deadline to Oct. 14.

Labor, Consumer Groups

A coalition of groups including program beneficiary advocates and labor unions also urged the CMS to ban binding arbitration agreements. The groups, in an Oct. 14 letter, said, “Only through the elimination of pre-dispute arbitration clauses will residents and their families be able to make a fully informed, voluntary choice to arbitrate.”

Nursing home contracts with pre-dispute arbitration clauses are inherently unfair and disadvantageous to nursing home residents for several reasons, according to the groups. For example, they said it is “unreasonable to assume that residents or their loved ones are able to comprehend the likelihood of grievous harm or poor care occurring within a facility when these agreements are signed upon admission. No one should be expected to anticipate or contemplate the occurrence of such tragedies.”

Groups that signed the letter include the Service Employees International Union, the Center for Medicare Advocacy (a beneficiary advocacy group) and the Long Term Care Community Coalition.

In addition, members of Fair Arbitration Now, a coalition of 19 consumer and civil justice advocacy groups, also called on the CMS to ban the use of pre-dispute arbitration agreements. During the nursing home admission process, “which often takes place under stressful conditions including following a recent hospital stay or a medical emergency, residents and their families are presented with nonnegotiable admission documents to complete and sign,” Fair Arbitration Now's Oct. 14 comments said. The group told the agency, “When forced arbitration clauses are present, residents lack meaningful ability to hold the nursing home accountable” for serious injuries and harm caused by negligence, such as bedsores, infections, pressure ulcers, dehydration, malnutrition or even physical and sexual abuse.

Fair Arbitration Now's members include the trial lawyers group, the American Association for Justice; the consumer advocacy group Public Citizen; and the Economic Policy Institute, a liberal think tank.

The officials' letters, along with the comments from the various groups, follow a September effort by 34 Senate Democrats to persuade the CMS to ban pre-dispute arbitration clauses in nursing home admission contracts

Other Concerns

AHCA, the industry group, discussed concerns not related to the proposal's arbitration provisions in a separate letter.

“We concur with CMS that updating the Requirements of Participation is necessary to reflect current standards of practice,” the AHCA said Oct. 13. However, the group said the CMS “is asking for too much too soon at too great a cost to providers.”

The AHCA called on the CMS to adopt changes proposed in the rule gradually. “If not carefully phased in, the final rule will be disruptive to proper care center operations and will redirect staff and resources away from a continuous pursuit of quality outcomes,” the AHCA wrote. The group said implementation of the requirements of participation “must occur on a staggered basis over a period of five years.”

The American Hospital Association (AHA), which has a membership of 5,000 hospitals, health systems and other health-care organizations, told the CMS Oct. 14 that overall, the agency “has done a good job in proposing changes to bring the LTC facility standards up date.”

The agency should, however, update its Medicare-related quality and safety standards more frequently, the AHA said, adding it is unclear why the LTC participation requirements haven't been “comprehensively reviewed since 1991.” According to the AHA, the CMS should review quality and safety regulations every few years.

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com