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The Trump Administration is About to Put Nursing Home Profits Ahead of Nursing Home Patients

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Some of the most heart-wrenching stories of abuse, mistreatment and neglect you’re likely to hear involve nursing homes. As America’s baby boomers age, and nursing home populations continue to grow, big corporations have, not surprisingly, started to take note. In fact, the vast majority of nursing homes in the United States – 70%, according to the Centers for Disease Control and Prevention – are run by for-profit corporations, and an increasing number of homes are being snapped up by Wall Street investment firms.

And that, in turn, can often mean that high quality care takes a backseat to high profits.

Increasingly, these giant corporations are using forced arbitration clauses — contract terms that say that people cannot sue them, no matter what laws they break, and instead people harmed by illegal acts can only bring cases before private arbitrators who are generally beholden to the corporations. These clauses make it far harder for the victims of mistreatment to hold a facility accountable where there’s abuse or serious negligence, and they minimize the incentive to provide the highest quality of care.  The secretive arbitration system also effectively lets homes sweep the facts about problems under the rug, so that the public and regulators never learn about widespread or egregious abuses.

That’s why, in 2016, the Centers for Medicare and Medicaid Services said nursing homes should no longer receive federal funding if they use arbitration clauses in their contracts. It was a commonsense proposal that would ensure families can hold nursing homes accountable for abuse and neglect. The government essentially said – and rightly so – that protecting desperately vulnerable people is more important than squeezing out an extra percentage of profit for hedge fund owners.

But that was 2016. Now, the Trump Administration appears to be gearing up to kill the proposal.

Senator Al Franken (D-MN), a fierce opponent of arbitration who has fought corporate lobbyists to protect Americans’ right to their day in court, said on Tuesday that “the Trump Administration is planning to lift the ban on nursing home arbitration clauses.”

So the White House, it appears, is ready to deliver another gift to hedge funds and banks – the corporate entities that increasingly control the nursing home industry – at the expense of the sick and elderly and their families.

It’s no wonder why corporate lobbyists working for the nursing home industry have made killing the CMS proposal a top priority: unlike the public court system (where trials are open to the public, press and regulators), nursing homes benefit enormously from the secretive system of arbitration, where the facts about abuses can be (and often are) buried. “Confidentiality” provisions – which really translate into gag orders – and non-transparent, non-public handling make it easier for systemic problems to stay hidden, and to continue.

If nursing homes are permitted to continue opting out of the civil justice system, we can expect to see lower levels of care, and higher numbers of preventable injuries and deaths. If they succeed in keeping families out of court, the potential savings to their bottom line are enormous when you consider that abuse is very widespread (according to the government’s own study).  Public Justice, our national public interest law firm and advocacy organization, set forth an extensive factual and legal case in support of the CMS proposal, where a great deal more background is available.

Consider just a handful of the plaintiffs who were able to successfully challenge nursing homes in court:

  • A 90-year-old woman allowed to languish with a festering pressure sore, acute appendicitis, and a urinary tract infection so severe it has entered her blood.
  • A diabetic patient injected with the incorrect dose of insulin, sending them into hypoglycemic shock and causing brain damage.
  • An 81-year-old man who was viciously beaten by a roommate who’d been involved in 30 assaults prior to moving in with the victim.
  • An 87-year-old woman whose calls for help were ignored after she fell and broke her hip.

Had any of those patients been subject to an arbitration clause – as no doubt many future cases would be if the Administration folds to pressure from for-profit homes – they likely would have never had a chance to have their case heard by a jury.

Nursing homes have complete control over some of the most vulnerable and fragile people in the entire country: people who are gravely ill, who are often cognitively impaired in ways that make it hard for them to protect themselves, are completely at the mercy of these institutions.

Now, rather than working to give those patients some small measure of protection and security, the Trump Administration is poised to give them the shaft. It’s unconscionable back-pedaling that would leave millions with little recourse when they, or their loved ones, are mistreated or abused.

This blog originally appeared at DailyKos.com on May 3, 2017. Reprinted with permission.

About the Author: Paul Bland, Jr., Executive Director, has been a senior attorney at Public Justice since 1997. As Executive Director, Paul manages and leads a staff of nearly 30 attorneys and other staff, guiding the organization’s litigation docket and other advocacy. Follow him on Twitter: .


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Labor In Exchange for One’s Rights

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A large and growing number of employers across the United States require current and prospective employees to sign away core constitutional rights as a condition of getting a job. “If you want to work here,” millions of employees are told, “you have to agree that any disputes you have with us–even if we cheat you, even if we break our contract or break the Fair Labor Standards Act or a basic civil rights act–will be submitted to binding arbitration with an arbitrator who is chosen by an arbitration company whom we pick. If you don’t like it, you can’t work here.

These provisions are common. Big Box retailers have them, restaurants have them, companies like Halliburton have them, and many more. Exact numbers are hard to come by, but it’s clear that today there are far more workers in America who have been required to sign mandatory arbitration clauses than there are workers who are members of unions. If one were trying to figure out whether the balance of power had shifted one way or the other between employers and employees, it would be hard to find a more obvious measure. A smaller and smaller percentage of American workers have been able to organize into groups to balance out the power of employers, and a larger and larger percentage of American workers have been forced to give up their legal rights and submit to corporate-chosen, largely non-transparent tribunals whose decisions are not meaningfully reviewed by any court. What a deal!

Arbitration tends to work pretty well in the collective bargaining process, where both sides–the union and the employer–are pretty sophisticated “repeat players,” and where neither party dominates who selects the arbitrators. Arbitration between employers and individual employees tends to be a very different situation, though. While individual employees rarely know how a given arbitrator has ruled in past cases (the arbitrations are generally confidential, and thus secret), the employers know who’s who. Arbitrators who rule for an employee risk being blackballed, and never working as an arbitrator again.

As a lawyer who represents employees and consumers in an adversary process, I’ve learned to be suspicious when the party who is adverse to–against–my client says it’s doing something for my client’s good. Thus, I’ve always taken it with a grain of salt when big corporations say things to the effect of “the reason we’re choosing to force our employers to submit to arbitration is because arbitration is fairer and better for the employees.” It reminds me of the line in Caddyshack where the Judge self-righteously tells the caddy “I’ve sent boys younger than you to the electric chair. I didn’t want to do it; I felt I owed it to them.”

Thus it should be no surprise that the leading academic study of thousands of publicly reported employment cases has found conclusively that non-unionized employees who have to take their disputes to pre-dispute binding arbitration win less frequently than if they could have taken their cases to court. The same study found that in those cases where employees do win in arbitration, they tend to win smaller awards than they would have been likely to win in court. (See Alexander Colvin, Empirical Research on Employment Arbitration: Clarity Amidst the Sound and Fury?, Employee Rights and Employment Policy Journal, Vol. 11, No. 2 (2007). (Purchase the article.) There are some studies paid for by the Chamber of Commerce that purport to show how employees benefit from mandatory arbitration (some by carefully selecting the cases they study, some by blurring together data from arbitration in the collective bargaining setting and the non-unionized setting, and some by simply lying), but the Colvin piece is the real deal.

The U.S. Supreme Court has repeatedly said that a cornerstone of arbitration is that it’s voluntary, and consensual. The Court sees nothing involuntary about telling a long-time employee that they have to sign a binding arbitration clause or lose their job. “After all,” the argument runs, “they could always choose to work for someone else.” This argument is pretty empty for most employees. It’s only a short step from that to saying that someone who signs an arbitration clause at gunpoint has made a voluntary choice – “hey, they could have chosen to be shot.”

The legislative history of the Federal Arbitration Act makes very clear that this state of affairs is not what Congress intended in 1924. From talking to my clients, there are a large and growing number of people who feel that mandatory arbitration for employees is unfair, and that Congress needs to do something to correct the problem.

About the Author: F. Paul Bland, Jr. is a Staff Attorney for Public Justice (formerly Trial Lawyers for Public Justice), where he handles precedent-setting complex civil litigation. He has argued or co-argued and won more than twenty reported decisions from federal and state courts across the nation, including cases in four federal Circuit Courts of Appeal and six state high courts. He was named the “Vern Countryman” Award winner in 2006 by the National Consumer Law Center, which “honors the accomplishments of an exceptional consumer attorney who, through the practice of consumer law, has contributed significantly to the well being of vulnerable consumers.” He is a co-author of a book entitled Consumer Arbitration Agreements: Enforceability and Other Issues, and numerous articles. For three years, he was a co-chair of the National Association of Consumer Advocates. He also has won the San Francisco Trial Lawyer of the Year in 2002 and Maryland Trial Lawyer of the Year in 2001. Prior to coming to Public Justice, he was a plaintiffs’ class action and libel defense attorney in Baltimore. In the late 1980s, he was Chief Nominations Counsel to the U.S. Senate Judiciary Committee. He graduated from Harvard Law School in 1986, and Georgetown University in 1983.

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