The Nursing Home Industry’s War to Deny Patients Their Day in Court

Elizabeth Barrow had just turned 100 years old when she was killed at Brandon Woods long-term care facility in Massachusetts. Having moved into the facility with her husband, Elizabeth was assigned a new roommate upon her husband’s passing shortly after they became residents. Lamentably, this new roommate was volatile; she had a history of conflict and propensity for psychiatric behavior, which, as Elizabeth would soon discover, was often left unsupervised by staff. In 2009, following a grisly manifestation of this behavior, Elizabeth was found with a plastic bag over her head, suffocated to death by her roommate.

Scott Barrow, Elizabeth’s son, responded the way a lot of people would: by filing a lawsuit. To Scott, a lawsuit meant that he would be given his constitutional right to a day in court. However, Scott was promptly denied this opportunity. The reason? Fine print.

When Elizabeth was first admitted to Brandon Woods in 2007, Scott inadvertently signed a forced arbitration agreement: a legally murky way of saying that all legal claims that arose with Brandon Woods— even wrongful death claims—must go through an alternative form of dispute resolution known as arbitration. Read: no judge, no jury.

Arbitration is nothing like going to court. Arbitration takes place outside of a courtroom, without a judge, without a jury, and with limited opportunity to seek or present evidence. What’s more, the proceedings are entirely confidential and are often presided over by arbitrators paid for by the defendant. Scarier still, the arbitrator cannot be sued for being unfair; arbitrators are protected by the doctrine of arbitral immunity even though they are not in any way accountable to the public. Finally, unlike court, there are exceedingly narrow opportunities for appeal, meaning that the arbitrator’s decision is final and cannot be meaningfully reviewed by a higher court. Under these conditions, the deck of justice seems immutably stacked in favor of industry repeat players like nursing homes.

Public proceedings,  generally not available in arbitration, are significant because they let the public—and other current and potential nursing home residents—know about the home’s wrongdoing. And it is precisely this public nature that deters nursing homes from repeating negligent behavior while at the same time empowering other residents to voice their concerns.

Unsurprisingly, arbitration has been lauded by the American Health Care Association (AHCA), a long-term care industry trade group. The AHCA has characterized arbitration as a “fair and effective legal process” that produces swifter results without undue litigation expenses. Yet, support for this assertion is almost entirely anecdotal. And, there is something categorically heinous about presenting suffering seniors or their family members with arbitration clauses buried in admissions paperwork where most of them will never see or understand it.

In September 2016, the Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) took a step toward reining in this practice. CMS issued an industry wide regulation that barred any nursing home that receives federal funding (most of them) from using forced arbitration agreements unless arbitration was suggested after a dispute had occurred and only if a resident or the resident’s representative agreed to it at the time of the dispute. Even more importantly, long-term care facilities would not be allowed to require that residents sign binding arbitration agreements as a condition of admission. Public Justice submitted comments in favor of this rule.

The rule was poised to take effect in November 2016; however, the AHCA—availing themselves of their day in court—sued the government almost immediately after the rule was announced to stop the rule from taking effect. The AHCA was successful: a federal judge in Mississippi issued a preliminary injunction against the rule’s implementation, halting the rule unless and until CMS successfully appealed the decision.

But CMS never appealed. Friday, June 2, 2017, marked the final day in which CMS could challenge the Mississippi judge’s injunction, and CMS allowed the appeal to lapse.

Instead, the CMS, under new leadership, was busy formulating a “revision” to the Obama-era rule to “reduce unnecessary provider burden.” Make no mistake: these revisions constitute a revocation rather than a minor revision.

The proposed “revisions” of the rule roll back the prohibition on pre-dispute forced arbitration agreements and allow for forced arbitration as a condition of admission, as long as these provisions are in “plain language” and explained to the resident or her or his representative. But “plain language” doesn’t make this practice any less wrong. Nursing homes are being allowed to opt-out of the civil justice system at the expense of the sick and the elderly. It is a grave injustice that the pendulous fate of nursing home residents’ constitutional rights will now depend on seniors’ ability to understand a process than many lawyers have trouble understanding.

Our most vulnerable deserve, at the very least, a choice—a meaningful choice made at the time of a dispute rather than at the moment they enter the door, in need of a room. This new rule will close the courthouse doors for many, just like it did for the Barrows. Submit your public comments on this rule here before August 7, 2017.

This post was co-authored by Public Justice Legal Fellow Kasie Durkit.