Articles Posted in Binding Arbitration

According to Time Magazine, in 2011, 84 year old Sister Irene Morisette, a Catholic nun, admitted herself to Chateau Vestavia, an assisted-living facility outside Birmingham, Alabama. After over 60 years of service to the Catholic Church, Sister Morisette wanted to live in a facility that could help her with daily tasks, as her knees were sore after countless hours of prayer. In the three year period from her admittance in 2011 until the night of June 23, 2014, Sister Morisette had begun showing signs of dementia and had her sister named as her legal guardian. It has not been revealed if Sister Morisette had dementia at the time she admitted herself into Chateau Vestavia, a finding that, in the eyes of the law, would be extremely significant given the horrifying incident that happened.

Upon admittance to the senior living facility, Irene Morisette signed a pre-dispute arbitration agreement, also known as a binding arbitration agreement, that was embedded in a lengthy admissions contract. The arbitration agreement prevented Sister Morisette, a woman who dedicated her life to God and the church, from suing when she was raped, presumably by a Chateau Vestavia staff member, on the night of June 23, 2014 at 87 years old. Irene Morisette believes her perpetrator was a staff member, as she had locked the door to her bedroom that night, just as she had every night of her adult life. Only someone with a key could have entered her room in the middle of the night without any forcible signs of entry.

Evidence Proves Ms. Morisette was Raped

The story of the death of 8 residents at the Rehabilitation Center at Hollywood Hills in the wake of Hurricane Irma has saddened our country. How could a nursing home lose power and leave residents to suffer in over 90 degree temperatures with just a few portable air conditioning units? Before news broke that the facility had a laundry list of violations and lawsuits, Levin & Perconti’s own Steven Levin was interviewed on national news channel HLN about the magnitude of the situation (watch his interview here). Steven Levin told HLN’s Carol Costello “Where was the staff? How could they not be on notice that they would have a power failure in this type of situation? And what, if any, precautions had they made in the event of a power failure. Forget the power failure. They knew there were going to be extremely high temperatures in this area at this time.”

Now, sadness is giving way to anger as news outlets have reported that the nursing home has a long history of violations, lawsuits accusing the facility of abuse and neglect, as well as prior citations for a faulty generator. The lack of a backup plan for a power outage at the nursing home speaks to the facility’s utter disregard for the health and safety of their residents.

Florida Senator Gary Farmer told ABC 10 that the state needs to strengthen the laws for nursing homes. According to Farmer, “We’ve insulated these nursing homes through deregulation in this state, and that’s how things like this can happen.” Stories of nursing home abuse and neglect and health and safety citations frequently go unknown by the public for many reasons. Nursing homes can be quick to settle lawsuits to keep them out of the public eye, and citations are only found by residents, their loved ones, and the public when they know exactly where to search. Citations can be cast aside by remedying the problem and paying a fine to the state Department of Health or the Centers for Medicare and Medicaid Services (CMS). It was only after the 8 deaths that the state, under Governor Rick Scott’s order, shut down the nursing home.

On September 5th, Ryan Gruenenfelder, Manager of Advocacy and Outreach for the American Association of Retired Persons (AARP) Illinois, appeared on Chicago Tonight with Phil Ponce to discuss the organization’s opposition to pre-dispute arbitration clauses in nursing home contracts. Gruenenfelder said that the Centers for Medicare and Medicaid Services’ (CMS) sudden support of arbitration clauses for nursing homes is detrimental to the 1.4 residents who currently reside in America’s nursing homes.

‘AARP Wholeheartedly Disagrees’

Gruenenfelder discusses how CMS and nursing home arbitration advocates have referred to claims of abuse and neglect as ‘frivolous lawsuits.’ He cites the recent audit from the Office of the Inspector General of the Department of Health and Human Services that found that Illinois has the highest rate of unreported nursing home abuse and neglect of any state. Gruenenfelder fears that most, if not all, nursing homes will ‘take advantage’ of CMS’s endorsement of arbitration clauses, leaving nursing home residents and their loved ones without the opportunity to choose a facility that does not require them to sign away their constitutional right to sue.

On August 22, the Los Angeles Times Consumer Confidential section ran an article that covered the fight by Democratic lawmakers and advocates to push back against the Centers for Medicare and Medicaid Services’ recent about-face decision to allow arbitration agreements as a condition for admission to nursing homes. The recent push by CMS for arbitration shocked everyone who watched them fight for a BAN against such agreements just last year. After a Mississippi federal court upheld the American Health Care Association’s injunction against enforcement of the ban in December, the issue has been fought over but without an official decision coming to pass. Then, without much explanation, CMS abandoned the fight for a ban on arbitration agreements and announced that they would instead be supporting their use by nursing homes. The surprise reversal of course by CMS has disappointed the public, but also Republican and Democratic Senators and Attorneys General in many states.

LA Times Takes a Stance

In the article, journalist David Lazarus discredits the American Health Care Association’s argument that arbitration gives customers an equitable, quicker resolution to a legal battle and allows them to avoid court costs and attorney’s fees. Lazarus responds that “study after study shows that consumers typically get the short end of the stick in arbitration.” In nursing home disputes, the arbitrator is chosen by the nursing home, making it highly unlikely that the arbitrator won’t show some sort of bias towards the company paying them to perform a service.

Congress and our fellow citizens are not the only ones urging the federal government to reconsider its approval of pre-dispute arbitration clauses in nursing homes. On August 8th, Illinois Attorney General Lisa Madigan joined 16 other Attorneys General in submitting comments to The Centers for Medicare and Medicaid Services (CMS), the government organization that just last year fought for a ban on arbitration clauses. After the American Health Care Association successfully brought a lawsuit to block enforcement of a ban, CMS has done an about-face and has decided to now voice its support for pre-dispute arbitration clauses.

Arbitration Clauses: A Strong Arm Tactic 

As we’ve covered extensively in this blog, arbitration clauses are in the best interests of the defense, forcing an injured victim and their loved ones to forgo their 7th amendment right to a jury trial. Asking someone to agree to settle grievances out of court before they even happen is like asking someone how they would respond in a hypothetical situation that they could never imagine finding themselves in. No one ever entrusts their loved one to a nursing home with the expectation that they will face abuse or neglect, but the reality is that these incidents are occurring with alarming frequency. Allowing nursing homes to use arbitration clauses as a condition of admission is a tactic that allows wealthy nursing home owners to pick a ‘negotiator’ who will help reach a settlement that historically is in the best interests of the nursing home. The injured party rarely receives fair compensation for tragedies such as medication errors, falls, bed sores, sexual abuse, and other horrific forms of nursing home abuse or neglect that result in injury and even death.

Binding or Forced Arbitration, the process of requiring customers, patients, and nursing home residents to agree to settle disputes outside of court, has been gaining popularity. From a big business perspective, arbitration significantly reduces the costs associated with a legal dispute and traditionally favors the party being sued over a death, injury, or other grievance.

In the past year, binding or forced arbitration in nursing homes has been a frequent topic of conversation as conflicting actions have played out within the Centers for Medicare and Medicaid Services (CMS), the agency that oversees federally funded nursing homes in this country. Last year, the Obama Administration and CMS passed a rule that would ban binding arbitration clauses as a condition of admission to nursing homes. In December, a federal judge in Mississippi blocked the enforcement of the ban. And in the most surprising move of all, just last month CMS did a 180 and decided that they would support binding arbitration clauses in nursing home admission contracts.

What is Binding Arbitration?

In June, the Centers for Medicare & Medicaid Services (CMS) proposed a new rule that would allow nursing homes to require arbitration agreements as a condition of admission. A nursing home arbitration agreement is a legally binding commitment that forces nursing home residents and their loved ones into negotiations over conflicts that would normally go through the court system. Nursing home arbitration agreements remove the 7th amendment right to a trial by jury and are infamous for pushing grieving families into unfair agreements with biased arbitrators chosen by nursing homes themselves. Binding arbitration agreements are well known for allowing lesser settlements for victims of nursing home abuse and neglect while keeping tragic truths out of the public eye. Arbitration agreements allow a nursing home to continue to offer suboptimal care while still admitting unsuspecting elderly residents. The passage of such a rule would be devastating to the millions of Americans who currently reside in nursing homes and the millions that will require nursing home care in the coming years.

Sudden Change of Opinion

The recent push by CMS to pass a rule allowing binding arbitration agreements in nursing homes has been met with suspicion. Just last year, the government organization responsible for regulating nursing homes attempted to pass a law BANNING the very same agreements they’re now rallying for. The enforcement of a ban on arbitration agreements was halted by a federal judge in Mississippi. Those who fought to halt the ban? Lobbyists and industry groups with a stake in the profitability of nursing homes.

What little hope remained that arbitration clauses would disappear from nursing home admission paperwork is now gone. Friday, June 2 was the deadline for the Trump Administration to submit paperwork to continue the appeal of a Mississippi Supreme Court judge’s decision to block a ban on nursing home arbitration clauses.  Instead, the administration decided to withdraw from the fight.

An Attempt to Restore Justice

Last September, the Centers for Medicare and Medicaid Services (CMS) released their updates to nursing home regulations for the over 15,000 facilities that currently receive Medicare and/or Medicaid support. One of the biggest changes was a ban on mandatory arbitration clauses in nursing home admission paperwork. An arbitration clause requires a potential plaintiff to agree to forgo a trial by jury and work with an arbitrator who will attempt to get both sides to come to an agreement on a settlement. The problem, besides the fact that it forces vulnerable Americans to waive their seventh amendment right to a trial, is that nursing home arbitration typically favors the defense by allowing them to select the arbitrator. Evidence has shown that when nursing home disputes are settled by arbitration, the outcome tends to be more positive for the guilty party and not the injured victim.

On Friday, the White House Office of Management and Budget met with long term care groups and the Centers for Medicare and Medicaid Services (CMS) to discuss a revision of an Obama era rule that banned arbitration agreements as a condition of admission for nursing home residents. By signing an arbitration agreement, a nursing home resident waives their 7th amendment right to a trial. It has been found that by forgoing a judge and jury, arbitration heavily favors nursing homes.

Taking Away the Rights of the Elderly

CMS intended to begin implementing this rule at the end of last November, but not before being halted by a federal court in Mississippi. The court ruled that the agency lacked the authority to impose such a rule and since then, CMS has been working on appealing that decision. However, it seems CMS is ready to abandon their appeal in favor of siding with the Trump administration. Trump has been vocal about removing regulations and barriers that interfere with business operations and nursing home owners and advocates have long argued that arbitration agreements are the only way to avoid costly legislation and potential closure of their facilities. While arbitration agreements might seem like a savvy business move, consider who is paying the price on the other side of this argument. The nursing home industry has a history of low pay for employees, long hours, overcrowding, poor care and minimal staff training. Nursing homes are an extremely lucrative business, which explains why over half of all Illinois nursing home residents are in a privately-held facility. Requiring a nursing home resident and/or their loved ones to sign hefty admission packets with a small clause requiring arbitration feels more than a little deceitful. What’s worse, considering the atrocities that occur as a result of the troubles nursing homes face, it seems unfair to require some of society’s most vulnerable to give up their right to a trial.

Late last year, a Mississippi judge voted to block a ban on arbitration clauses in nursing home residency agreements. The ban, introduced by the Centers for Medicare & Medicaid Services (CMS), was intended to preserve the right to a jury trial and to encourage better care and oversight by nursing home staff. Despite the ban, victims and loved ones of those who have faced abuse, neglect, and even death are clinging to the very mention of CMS’ rule intended to ban binding arbitration clauses in hopes that it will be reinstated and breathe life into their legal battle against nursing homes.

A Daughter’s Fight for Justice

In Minneapolis, the daughter of an 89 year old assisted living facility resident who died after hernia complications in 2014 is suing the nursing home, Lighthouse of Columbia Heights, for failing to respond to obvious signs of a hernia in her father. Doctors had ordered staff to notify them if Mr. Seeger, the decedent, showed any signs of a hernia, given that he had experienced them in the past. After the staff had ignored obvious symptoms, his daughter went to visit her father, only to discover him vomiting and screaming about pain in his groin area. She called 911 and had her father transported to a hospital where he died shortly after admission. Seeger’s daughter faced a hurdle when attempting to sue Lighthouse of Columbia Heights: the family had waived their right to a jury trial by signing a 36 page residency agreement in which a binding arbitration clause was embedded. The daughter said that she asked for time to look over the agreement with an attorney but that the facility pressured her into thinking the apartment would be gone by the time she had done so. The attorney hired by the family is arguing that they signed the contract under duress, which would make the contract legally void. Lighthouse of Columbia Heights is fighting back by saying that they never pressured the family. While contracts can be tough to void, the lawsuit against the facility is being buoyed by the recent ban on binding arbitration, even with it currently stalled by the courts. In addition to the Seeger Family, many others who have debated seeking legal assistance despite signing an arbitration agreement are being filled with hope that justice might be on the horizon.

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