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Nursing Home Industry Launches Campaign of Deception

Sept. 11, 2008

Nursing Home Industry Launches Campaign of Deception
to Derail Protections for Elderly Residents

More Than 100 Public Interest Organizations Support the Legislation;
Industry Coalition Opposes It Under Pretense of Consumer Protection

WASHINGTON, D.C. – On the eve of a key U.S. Senate committee vote on legislation to help protect residents of nursing homes and assisted living facilities from abuse and neglect, the nursing home industry has launched a campaign of deception about the legislation.

Today, the Senate Judiciary Committee is expected to mark up S. 2838, the Fairness in Nursing Home Arbitration Act, sponsored by Sens. Mel Martinez (R-Fla.) and Herbert Kohl (D-Wis.). The bill would make pre-dispute binding mandatory arbitration provisions unenforceable in nursing home contracts. The House Judiciary Committee approved the measure in July.

Buried in the fine print of admissions contracts, these arbitration clauses strip elderly residents and their families of the right to take nursing homes to court in cases of abuse or neglect – a critical tool in prompting nursing homes to take better care of residents. Instead, any disputes must be brought in a private, expensive, secretive forum chosen by the nursing home, giving the arbitration firm an incentive to favor the nursing home company that brings it business. A 2007 Public Citizen study of 34,000 credit card arbitration cases showed that businesses won 94.7 percent of cases against consumers.

Most people are unaware of arbitration provisions in the fine print of nursing-home admissions documents and do not understand them. The clauses also are typically non-negotiable. For these reasons, businesses can use arbitration “agreements” to immunize themselves from accountability in court for their wrongdoing.

On Wednesday, a group led by the U.S. Chamber of Commerce wrote a letter opposing the legislation to Sen. Patrick Leahy (D-Vt.), Judiciary Committee chairman, and Sen. Arlen Specter (R-Pa.), ranking member of the committee. The letter is remarkable in the extent of its deception.

The authors claim to be a “diverse coalition of senior, caregiver, taxpayer, and business advocacy organizations” and claim they wish to protect consumers. But nearly all those listed as signers are business and professional associations whose goals are to maximize profits and limit corporate accountability for wrongdoing. The groups also misrepresent what the legislation would do. They erroneously claim that the Fairness in Nursing Home Arbitration Act would “eliminate or significantly limit the use of arbitration.” In fact, the bill would actually allow consumers to choose whether to go to arbitration or court to resolve disputes, meaning that businesses couldn’t force people into unfair arbitrations.

A truly broad coalition of groups that advocate on behalf of consumers, senior citizens and employees also sent a letter to the Senate Judiciary Committee on Wednesday, urging support for the bill. More than 100 organizations from 30 states, including Public Citizen, signed on to the letter to support protecting the rights of nursing home residents and their families.

“It’s appalling that the nursing home industry is fighting against senior citizens under the banner of consumer protection,” said David Arkush, director of Public Citizen’s Congress Watch division. “But the level of dishonesty reflects the disgrace in their position. It wouldn’t work if they told the truth and said, ‘We corporate lobbyists oppose this bill because our multimillion-dollar corporate clients want immunity when they abuse or neglect some of America’s most vulnerable citizens.’ If arbitration is good for consumers, then they will choose it. There is no justification for forcing it on people.”

Commonly reported nursing home injuries include pressure sores that lead to infection and amputation of limbs, suffocation on bedrails and other restraining device, physical and sexual assault, renal failure from dehydration, malnutrition, and death from fires in buildings lacking sprinkler systems. According to a 2007 report by the Government Accountability Office, almost half of states cited more than 20 percent of their nursing homes for serious deficiencies in 2006; six states cited 30 percent or more for dangerous conditions or harming residents.

Learn more about binding mandatory arbitration and related congressional legislation.