Nursing Homes Battle to Retain Mandatory Arbitration Clauses

By | June 23, 2008

U.S. nursing homes are pushing against an effort in Congress to invalidate arbitration clauses in admissions contracts, a change that would make it easier for residents to sue for shoddy care or wrongdoing.

A spokeswoman for the industry, which includes Kindred Healthcare, Sun Healthcare and Skilled Healthcare, testified before lawmakers last week in opposition to the proposed legislation that backers say is needed to protect residents’ rights to sue.

Advocates say families and patients often do not notice fine print in standard contracts, which compels them to engage in binding arbitration instead of going to court to address claims of abuse or negligence.

“Most are unaware they are signing away their right to go to court,” said Sen. Herb Kohl, a Wisconsin Democrat co-sponsoring the bill to invalidate the clauses.

The seniors lobby AARP and patient group Alzheimer’s Association back the legislation.

The proposal’s prospects remain unclear in what is a crowded legislative calendar during a year in which the entire U.S. House of Representatives and one-third of the Senate in addition to the White House are up for election.

About 1.5 million Americans currently live in long-term care facilities, mostly nursing homes. That number is expected to swell amid the coming retirement of nearly 80 million baby boomers.

The industry says the arbitration clauses are voluntary and yet chosen by about 90 percent of residents. It also said eliminating the clauses would raise legal and insurance costs.

“At my own facility, we walk through the complicated process with each and every one of our residents,” testified Kelley Rice-Schild, a Florida nursing home owner and member of the American Home Care Association, a trade group for the for-profit section of the industry. “We don’t need to throw the baby out with the bath water.”

Use of the arbitration language in contracts has risen since the late 1990s, as increasing liability costs led the industry to adopt them, experts said.

Many reports have documented shoddy care in the nation’s approximately 16,000 nursing homes. The Government Accountability Office has repeatedly said sanctions for offenders are ineffective and that deficiencies and outright negligent care is common.

“I believe it is a way of forcing the industry to regulate itself,” said Sen. Mel Martinez, a Florida Republican who supports the bill.

Martinez said he did know if he signed such an agreement when he admitted a parent to a nursing home, which advocates said proves their point.

The bill would not ban arbitration, but remove clauses requiring it.

University of Kansas law professor Stephen Ware said his research has shown that people in nursing homes will not choose arbitration once a dispute arises.

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