BLUMENTHAL, SENATE COLLEAGUES PUSH TO STOP TRUMP ADMINISTRATION FROM ENDING PROTECTIONS FOR NURSING HOME RESIDENTS

From the House Democratic Leader's Press Office

Contact: Maria McElwain (Blumenthal) (202) 224-6452

August 7, 2017

BLUMENTHAL, SENATE COLLEAGUES PUSH TO STOP TRUMP ADMINISTRATION FROM ENDING PROTECTIONS FOR NURSING HOME RESIDENTS

Blumenthal Joins 30 Senate Colleagues in Pressing CMS to Abandon Effort that Could Lock Residents into Forced Arbitration Agreements

[WASHINGTON, DC] - U.S. Senator Richard Blumenthal (D-CT) joined 30 of his Senate colleagues in a major effort to push the Trump Administration's Centers for Medicare and Medicaid Services (CMS) to abandon a proposal to scrap protections that prevent nursing homes and long-term care facilities from locking residents into forced arbitration agreements.

"Forced arbitration clauses in nursing home agreements stack the deck against residents and their families who face a wide range of potential harms, including physical abuse and neglect, sexual assault, and even wrongful death at the hands of those working in and managing long-term care facilities," Blumenthal and his colleagues wrote in a letter Monday to CMS Administrator Seema Verma. "These clauses prevent many of our country's most vulnerable individuals from seeking justice in a court of law, and instead funnel all types of legal claims, no matter how egregious, into a privatized dispute resolution system that is often biased toward the nursing home."

The Senators went on to write, "Therefore, we strongly urge CMS to fully protect many of our nation's most vulnerable individuals by withdrawing this proposal and sustaining and fully enforcing the existing restrictions on pre-dispute arbitration clauses in long-term care facility contracts."

You can read the full letter below or by clicking at: https://www.franken.senate.gov/files/letter/170807CMSLetter.pdf.

August 7, 2017

Seema Verma

Administrator

Centers for Medicare & Medicaid Services

Department of Health and Human Services

Room 445-G, Hubert H. Humphrey Building

200 Independence Ave., S.W.

Washington, DC 20201

RE: Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements (CMS-3342-P)

Dear Administrator Verma:

We are writing to oppose the Centers for Medicare & Medicaid Services' (CMS) proposal to reverse course on a critical aspect of the agency's recently finalized rule, Reform of Requirements for Long-Term Care Facilities (CMS-3260-P), which made a number of long-overdue improvements to the requirements for long-term care facilities and nursing homes participating in Medicare and Medicaid programs. Specifically, the latest CMS proposal would reverse a prohibition on long-term care facilities' use of pre-dispute, mandatory ("forced") arbitration clauses in their resident admission agreements. The decision to admit yourself or a loved one into a long-term care facility is already an extremely difficult one; nursing home residents and their families shouldn't also be forced to sign away their fundamental rights in order to access the long-term care they require. We strongly urge you to reconsider this reversal and protect the rights of American seniors and their families by fully enforcing the existing CMS restrictions on pre-dispute arbitration clauses in long-term care facility contracts.

Forced arbitration clauses in nursing home agreements stack the deck against residents and their families who face a wide range of potential harms, including physical abuse and neglect, sexual assault, and even wrongful death at the hands of those working in and managing long-term care facilities. These clauses prevent many of our country's most vulnerable individuals from seeking justice in a court of law, and instead funnel all types of legal claims, no matter how egregious, into a privatized dispute resolution system that is often biased toward the nursing home. As a result, victims and their families are frequently denied any accountability for clear instances of wrongdoing.

Consider the story of Roberta Powers, as reported by the New York Tim es, who suffered from dementia and diabetes and lived in a nursing home in Birmingham, Alabama.[1] Roberta's daughter Rochelle went to visit her mother one day and found Roberta vomiting and sick with abdominal pain. Rochelle immediately alerted the nursing staff and specifically noted the number of pills that Roberta had in her hand. A few days later, Roberta's son Larry came to check on his mother only to find that she was unresponsive. Larry called 911, and Roberta was taken to the emergency room. She died the next day. An autopsy revealed that Roberta's blood contained more than 20 times the recommended dosage of her diabetes medication. When Roberta's family sought to hold the nursing home accountable in court for failing to supervise the administration of medication to a resident with dementia, the facility pointed to the forced arbitration clause in Roberta's admission papers, forced the case out of court and into arbitration, and the family was awarded nothing.

Forced arbitration is also shrouded in secrecy, which jeopardizes patient safety and shortchanges families of information that may influence their care decisions. Between the confidentiality requirements contained in many forced arbitration agreements and the secretive nature of the arbitration proceeding itself, nursing homes use forced arbitration to shield themselves from accountability to the courts and the public eye. This allows nursing homes to cover up widespread wrongdoing and prevents potential residents and their families from being fully informed of a facility's practices or reputation. This is especially troubling as recent reports have revealed that residents of nursing homes can be particularly susceptible to physical and sexual abuse.[2] With Medicare and Medicaid spending over $82 billion on nursing home care in 2015, prospective residents, their families, and the public deserve greater accountability and transparency from these facilities, not less.[3]

CMS first acknowledged the significant negative impact of forced arbitration agreements in July 2015 when it proposed a series of requirements aimed at improving resident awareness of long-term care facilities' use of such agreements. Specifically, CMS recognized that residents may feel coerced into signing an arbitration agreement given facilities' superior bargaining power during the admissions process and may not fully grasp the ramifications of waiving their right to judicial relief for a dispute that has not yet arisen.[4] CMS also stated that "the increasing prevalence of these agreements could be detrimental to residents' health and safety and may create barriers for surveyors and other responsible parties to obtain information related to serious quality of care issues."[5]

In 2015, 34 Senators wrote to CMS in response to its initial proposal, commending the agency for acknowledging the severe harms associated with forced arbitration, but also raising concern that the steps CMS had initially proposed were insufficient to protect the rights of residents.[6] CMS agreed, and issued a final rule prohibiting long-term care facilities that accept reimbursement from Medicaid or Medicare funds from using pre-dispute arbitration in their resident admission agreements.

The current CMS proposal, issued by President Trump's administration, to roll back this critical protection once again places residents' health and safety at significant risk, and leaves potential residents and their families in the dark about facilities' past negligence and abuse.

The new rule reinstates the ability of nursing homes to require forced arbitration agreements, yet purports to provide important--but completely insufficient--patient protections aimed at increasing transparency of a forced arbitration agreement. For example, the new rule would require that forced arbitration agreements be written in "plain language" and that residents acknowledge that they understand the agreements before signing. Regardless of how plain the language is, as potential nursing home residents and their families are weighing their options for long-term care, they should not also be expected to contemplate whether such a grave harm could arise, let alone what avenue of recourse they would pursue in the event that it does. Too often, only after a resident has suffered an injury or death do families truly realize the impact of the arbitration agreements they were forced to sign. The only truly transparent arbitration agreement is one that is voluntarily signed, after a dispute has arisen.

The current proposal would also override existing state law protections aimed at protecting nursing home residents from the enforcement of one-sided contracts more broadly. CMS' proposed overreach would completely eliminate resident choice on the issue of forced arbitration, and actually reinforces the facilities' superior bargaining power over residents during the admissions process - a harm that CMS acknowledged two years ago.

Perhaps most alarming in the current proposal is the elimination of the current resident protections which prevent a nursing home from forcing residents to sign arbitration agreements as a condition of admission, including, as the current proposal suggests, as a condition of continued residency. This could permit the most unscrupulous facilities to threaten current residents with removal from a facility for failure to sign a forced arbitration agreement.

Finally, the current proposal would undermine the objectives of CMS's recently finalized rule to modernize the requirements for long-term care facilities. If nursing homes can use forced arbitration to cover up widespread wrongdoing and avoid public scrutiny, CMS and state regulators will be unable to ensure compliance with newly-established requirements, particularly those aimed at preventing elder abuse.

For the above stated reasons, we maintain that only a voluntary, post-dispute arbitration agreement that is entered into after a resident has considered all their legal rights will ensure accountability and safety for nursing home residents. Therefore, we strongly urge CMS to fully protect many of our nation's most vulnerable individuals by withdrawing this proposal and sustaining and fully enforcing the existing restrictions on pre-dispute arbitration clauses in long-term care facility contracts.

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[1] Jessica Silver-Greenberg and Robert Gebeloff, In Arbitration, a 'Privatization of the Justice System', N.Y. Times,

Nov. 1, 2015, available at https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html

[2] CNN recently published an investigation detailing systemic failures in the nursing home industry that have allowed sexual abuse in some nursing homes to persist. See Blake Ellis & Melanie Hicken, Sick, Dying and Raped in America's Nursing Homes, http://www.cnn.com/interactive/2017/02/health/nursing-home-sex-abuse-investigation/, (last visited July 24, 2017).

[3] MedPAC, A Data Book: Health Care Spending and the Medicare Program, June 2017, Sec. 8: Post-acute care, p. 113, http://medpac.gov/docs/default-source/data-book/jun17databooksec8sec.pdf'sfvrsn=0, (last visited July 24, 2017); Medicaid's Role in Nursing Home Care, The Henry J. Kaiser Family Found.,http://www.kff.org/infographic/medicaids-role-in-nursing-home-care/, June 20, 2017.

[4] Medicare and Medicaid Programs; Reform of Requirements for Long-Term Care Facilities, 80 Fed. Reg. 42168, 42211 (proposed July 16, 2015) (to be codified at 42 C.F.R. S. 483.70(n)).

[5]Id.

[6] Letter to Andy Slavitt, Acting Adm'r., Ctr. for Medicare and Medicaid Servs., Sept. 23, 2015, https://www.franken.senate.gov/files/documents/150923CMSArbitration.pdf