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Countering Nursing Homes’ Bogus Argument To Keep Negligence Hidden

Countering Nursing Homes’ Bogus Argument To Keep Negligence Hidden

photo credit: consumerfriendly via photopin cc

AKA Why Arbitration Contracts are Not Medical Decisions

By Jennifer Bennett
Budd-Kazan Attorney

Arbitration is not health care. Seems obvious, right? “Just take two arbitration and call me in the morning,” said no doctor ever. And yet nursing homes across the country are trying to convince judges that the decision to sign an arbitration contract is a medical decision. Why? Because if deciding to go to arbitration is a medical decision, then people who are empowered to make medical (and only medical) decisions on behalf of nursing home patients can sign away the patients’ right to go to court.

Turns out, that’s a lot of people.

Nursing homes have tried their “arbitration is health care” argument on seven state supreme courts, and seven state supreme courts have rejected it. Despite this consensus, one nursing home is trying to take its case all the way to the U.S. Supreme Court. It’s being sued on behalf of one of its patients, who allegedly suffered severe bedsores and pressure ulcers, developed pneumonia, and finally died as a result of the nursing home’s neglect.

But the nursing home is arguing it can’t be taken to court because when the patient’s sister admitted her to the nursing home, she signed an arbitration contract on the patient’s behalf. The South Carolina Supreme Court held that because the sister only had the authority to make health care decisions, the arbitration contract is unenforceable. The nursing home wants the U.S. Supreme Court to overturn that decision. It contends that federal law requires courts to enforce arbitration contracts signed by people whose authority is limited to making health care decisions. Here’s the brief we filed Friday explaining why that argument is as wrong as it sounds.

But why do nursing homes want all these people to sign arbitration contracts in the first place? They’ve actually been remarkably up front about it: As they see it, too many victims of nursing home abuse were bringing too many lawsuits that were costing the nursing homes too much money. As the owner of one nursing home chain explained in a letter to then-Sen. Jon Kyl (R-Ariz.): “[D]rastic increases in the number of lawsuits against nursing homes” were resulting in “jury verdicts reaching tens of millions of dollars.” They needed to put a stop to it, so they “turned to . . . arbitration agreements as a levy against the rising tide of insurance and litigation costs.”

Over the past several years, stories of nursing home abuse have been widespread. One of the nation’s largest nursing home chains, for example, just settled with the Justice Department for nearly $40 million over allegations of substandard care.

Nursing homes have been working hard to ensure that the claims of patients who have been mistreated never see a courtroom. Much better to send them to an arbitrator, where there will be limited discovery, the proceedings will be secret, and there won’t be any pesky jurors to sympathize with the victim. Plus, the arbitrator is typically chosen by a company the nursing home itself selects. And, unlike a court case, which might cost a couple hundred dollars to file, arbitration fees can be in the thousands or even tens of thousands. Thus, many claims will be eliminated simply because victims – particularly poor ones – can’t afford to bring them.

All in all, then, requiring patients to go to arbitration works out quite well – for the nursing home. (For the patient, not so much.)   

But there’s a hitch. The Supreme Court has made clear that people can’t be required to arbitrate without their consent. So nursing homes have taken to tucking arbitration contracts into the raft of paperwork patients sign when they’re admitted. A patient comes in, often straight from the hospital; they sign whatever the nursing home representative puts in front of them to sign; and, often without even knowing it, they’re bound to arbitration. Easy.

Sure, these patients often have nowhere else to turn – they need a bed immediately or there’s only one nursing home anywhere near their relatives.  And, yes, they are frequently physically or cognitively impaired when they sign their forms, such that they can’t understand – or, in some cases, even read – what they are signing. But that doesn’t always stop nursing homes from arguing they should be bound to arbitration; and it hasn’t always stopped courts from agreeing. (Take, for example, this case in which a court upheld an arbitration contract despite finding that the patient who signed it “could not possibly have understood what she was signing”; or this case where a court enforced an arbitration contract signed by a patient who literally couldn’t read it because she was blind.)

But nursing homes face another obstacle in their effort to arbitrate all the claims: Many patients don’t sign their own admissions paperwork. Often, patients are admitted to nursing homes by a friend or relative, whose authority is limited by state law to making health care decisions. So if the nursing home wants to enforce an arbitration contract, they have to argue that deciding to sign it was a health care decision. This, many courts have held, is a bridge too far.

It’s unlikely that the Supreme Court will disagree – it’s pretty hard to argue with the proposition that arbitration is not health care. But this is just one of the many strategies nursing homes are using to try to prevent patients who have been neglected, abused, or even killed from bringing their claims to court. There are already about a million and a half people in nursing homes, and it’s not news that the country is getting older. Public Justice is committed to using its years of expertise in arbitration to help this vulnerable population.