Earlier this year, the Trump administration announced plans to strip nursing home residents of their legal right to sue care facilities by enforcing binding arbitration in case of disputes. While this was welcome news for the facilities – as it would mean taking their delinquencies away from public scrutiny, preventing class actions, and reducing legal costs – the ruling shattered any hope of justice for victims of abuse, neglect, and exploitation.
Consumer advocacy groups, however, are unwilling to give up hope just yet. This week, they set in motion a full-court press urging the Centers for Medicare and Medicaid Services (CMS) to reconsider nixing the rule.
Fighting to End Forced Arbitration
More than 75 of these groups have come together to form what they call the Fair Arbitration Now Coalition in the fight against a rule change, which they believe creates an “unequal balance of power” and allows companies to “avoid accountability for wrongdoing.” Remington Gregg, counsel for civil justice and consumer rights at 1 group, Public Citizen, explains:
“When you are trying to get someone in a nursing home, often time it’s stressful or an emotional time. Oftentimes loved ones can’t take care of themselves, so for a nursing home to say in order to get in you have to waive your right is shameful. We’re talking about everything you may have a problem with — abuse, neglect, sexual assault, a wide variety of things — they are now saying you are waiving your right to full justice.”
The coalition, supported by Senate Democrats, also includes AARP, which claims CMS lacks the statutory authority to change the rule.
“To the extent that CMS may be relying on the authority to promulgate regulations ‘to promote the effective and efficient use of public moneys’ the regulations still need to be for the benefit of Medicare and Medicaid nursing facility residents and not to their detriment,” the non-profit group wrote in a statement.
But how exactly did the CMS go from supporting the rule to handing all power back to callous, unlawful nursing homes? The rule’s undoing began with the American Health Care Association (AHCA), a major nursing home lobbyist – who argued the CMS lacked statutory authority to write the rule in the first place.
The Rise and Fall of Nursing Home Arbitration
In September 2016, the Department of Health and Human Services (DHSS) made a long-awaited attempt to protect the basic legal rights of vulnerable nursing home abuse victims. The federal department issued a rule: that CMS-funded nursing homes were no longer allowed to force residents to agree to private, third-party arbitration, which would prevent them from taking their cases to public trial.
Disappointingly, the rule never had a chance. Barely more than a month later, a Mississippi federal judge blocked the rule when the AHCA took DHHS to court, arguing that this law violated the existing Federal Arbitration Act.
This prompted CMS, backed by the Trump administration, to reword the rule to focus on “the transparency surrounding the arbitration process,” meaning nursing homes could still enforce arbitration; they would simply have to explain it in a way the resident understands.
The original arbitration rule’s confusing language was a problem, to be sure. Evidence in favor of the new rule (to stop binding arbitration) showed that many residents feel pressured into signing the contracts before given the opportunity to clarify them. Nevertheless, ensuring residents understand the agreement is not enough if they do not agree to it – and unfortunately, residents are given very little choice.
The CMS’s Curious Change of Heart
Obama-era CMS recognized the rule’s potential to “improve the care and safety of the nearly 1.5 million residents in the more than 15,000 long-term care facilities that participate in the Medicare and Medicaid programs.” But Trump-era CMS? A whole new ball game. Under its proposed revisions, CMS argues, binding arbitration is now good for nursing home residents as it would save them the trouble of more difficult and costlier dispute resolution processes.
“For many individual disputes, litigation in court is simply impractical. Litigation in court is procedurally complex, which means that non-lawyers need legal representation to have any hope of successfully navigating the system,” said the U.S. Chamber of Commerce, which supports the rule change. “But many plaintiffs’ claims are too small to justify paying a lawyer to handle the matter and, in any event, most people do not have the resources to do so.”
On the other hand, AARP and other non-profit consumer advocacy groups think that including binding arbitration on nursing home contracts is lethal to the residents and their families, as it unfairly limits their rights in cases of negligence. Consumer groups have pointed out that the CMS’s reasons for revising the rule contradict evidence cited when the rule was issued in 2016.
“Simply making the argument that we are a new administration and want to make sure corporations don’t have regulations that are forcing them to be accountable,” said Gregg, “is not a good enough reason to change a rule that underwent extensive review.”
Burden to Protect Patients Falls on Advocates, Not Agencies, Once Again
Given the sheer volume of abuse cases in the nursing home industry, it’s no wonder people would be worried about having binding arbitration enforced. CMS’s decision to forbid arbitration came not long after a harrowing report revealed that elders are abused at 1 in 3 nursing homes, suffering everything from inadequate medical care and hygiene to sexual abuse and serious, sometimes lethal injury. If unfortunate enough to fall victim to these crimes, patients who have signed arbitration agreements have zero recourse.
Of course, CMS’s move to protect residents’ legal rights faces the same fate as many other Obama overhauls: rejection by the pro-business Trump administration. But rather than see another federal agency go to seed, the Coalition’s hope is to have their voices heard on behalf of the 1.5 million elderly patients at risk of abuse. CMS held a public question-and-answer session on the legislative changes this week; the agency’s response remains pending.