By Rose Hoban
Cindy Pajak’s voice still shakes with anger when she talks about the end of her mother’s life.
Pajak and her sister brought their 87-year-old mom, Ann Flynn, down to North Carolina from Ohio, where another sister had been caring for her. Their mom had dementia and was frail, so Pajak and her sister found a nursing home in Raleigh to care for her.
Within a few months, their mom was malnourished and had multiple infections, including a bedsore on her foot.
“We kept asking about the sore she had. They said it was mending,” Pajak said. Finally, the sisters had had enough.
“We went into the nursing home about 10 p.m. one night and my mother was covered in vomit; it was a mess,” Pajak said. “My sister called the emergency squad and they took her to Rex Hospital and they said she had gangrene to the bone.”
About two weeks later, Ann Flynn died.
Pajak said the nursing home had too few nurses, too few nursing assistants, who she said, “only make eight bucks an hour. They’re not going to do any more than they have to.”
She alleges the home neglected her mother and that she witnessed other patients being neglected. So Pajak and her sister tried to sue.
“Lawyers wouldn’t take the case because there was no money in the estate,” Pajak explained. Her mother had spent all of her savings.
But if the federal Centers for Medicare and Medicaid Services has its way, it could become harder for Pajak and others like her to sue a nursing home for neglect.
What CMS wants to regulate are clauses in nursing home contracts known as pre-dispute arbitration agreements.
When a consumer signs admission papers for themselves or a loved one into a nursing home, these clauses are often present amongst the dozens of pages of legalese in the contract. Such provisions eliminate the opportunity for a consumer who ends up in conflict with a nursing home to go to court.
If the worst happens, instead, the person only has the option for negotiated arbitration, most often with an arbitrator retained by the nursing home company.
In a rule created by the Obama administration that was supposed to go into effect in late 2016, CMS banned the practice of including pre-dispute arbitration clauses in nursing home contracts. But before the rule could go into effect, the American Health Care Association, an industry group representing nursing homes, sued the government to block the ban from taking effect.
Now the Trump administration wants to not only reverse the ban, but CMS is proposing to prohibit any bans on the practice from being written into any statutes.
“Studies consistently show that arbitration is cheaper, simpler, and faster than resolving claims in court,” reads a talking point from the AHCA, which was provided to NC Health News by Adam Sholar, lobbyist and head of the North Carolina Health Care Facilities Association. The NCHCFA has approximately 41,300 beds and 380 facilities in its membership.
“As the Supreme Court has recognized, arbitration is ‘usually cheaper and faster than litigation; it can have simpler procedural and evidentiary rule’ and ‘it is often more flexible in regard to scheduling of times and places of hearings and discovery devices,’” the position paper reads.
Sholar said his organization’s position is consistent with that of the national organization, which holds that consumers do just as well under arbitration as they do in court.
Buried in legalese
Advocates for people in nursing homes say these clauses in nursing home contracts are not as benign as the AHCA portrays them.
“The issue is that [pre-dispute arbitration agreements] are being required before any dispute has happened,” said Lori Smetanka, head of The National Consumer Voice for Quality Long-Term Care.
“It’s essentially tying people’s hands for whatever options they have for recourse in the event something happens. It doesn’t matter what it is, their recourse is limited based on having to sign these agreements.”
And Smetanka noted that people are often stressed when they’re admitting a loved one into a nursing home. It’s a move that often comes on the heels of a medical crisis and so people don’t read the dozens of pages in the nursing home contracts in their eagerness to get their loved one settled.
That’s partly why North Carolina Attorney General Josh Stein signed onto a letter to CMS last week calling on CMS to disallow these pre-dispute arbitration clauses in nursing home contracts that restrict a consumer’s right to sue.
“It’s fundamental in the U.S. that if a person has been harmed through the mistreatment or neglect of another that they can have their day in court,” Stein told NC Health News. “That’s what the original CMS rule provided and it’s what the new CMS rule undermines.”
Smetanka agrees with Stein.
She said pre-dispute arbitration agreements are being widely used around the country, even though it’s pretty hard to sue in the first place, as Cindy Pajak and her sister found out.
Jury awards and non-jury settlements tend to be based on the economic damages suffered by a consumer, but there’s not much economic damage when an 87-year-old person with dementia dies. On top of that, many states, such as North Carolina, have caps on so-called “pain and suffering” awards, which also limit the liability for a potentially neglectful facility.
Smetanka said there have been some large, substantial judgments levied against nursing home companies, but they’re hard to come by, and she hears bad stories every day that are never resolved.
“They are really horrible, horrible things, pressure ulcers, deaths from people strangled through their restraints or bed rails, really terrible situations,” she said.
Even arbitrators don’t agree with pre-dispute arbitration clauses.
The American Arbitration Association, which sets standards for the arbitration industry, has had a policy about pre-dispute arbitration for more than a decade. The policy states that organization members “would not administer healthcare arbitrations between individual patients and healthcare service providers that relate to medical services, such as negligence and medical malpractice disputes, unless all parties agreed to submit the matter to arbitration after the dispute arose.”
“You know what, if the parties in a healthcare dispute want to come to arbitration, let them make that decision post-dispute, not pre-dispute,” explained Michael Clark a spokesman for the AAA, because essentially, anything else circumvents due process.
“God forbid a dispute arises because I felt that you mistreated someone, then make that decision after, not before,” he said.
Costly regulatory failure
CMS, the same agency that could allow it to become harder for families to sue, found in a 2014 report that about 22 percent of Medicare beneficiaries “experienced adverse events during their [nursing home] stays.”
The report concluded more than half of those adverse events were “clearly or likely preventable,” and cost Medicare about $2.8 billion in 2011.
And that’s just Medicare, which covers the costs for seniors.
Medicaid, another government program, pays for more than half of all long-term care services in the U.S., including for nursing home care for low-income seniors, like Pajak’s mother, who have exhausted their savings. In North Carolina, 31 percent of Medicaid spending is on people who also qualify for Medicare, so using the CMS numbers, untold millions of Medicaid dollars are likely paying for substandard care that lands patients in the hospital.
And when these incidents occur, many families end up with few options.
“Complaints can be filed with agencies that license nursing homes and frankly the level of them finding that problems have occurred is not what we would like to see,” Smetanka said. “The enforcement system doesn’t, we think, adequately reflect some of the problems that are seen in nursing homes.”
NC Health News requested to speak to North Carolina’s long term care ombudsman, but the Department of Health and Human Services declined the request.
In an email, a DHHS spokeswoman said the agency’s nursing home section had 2,827 complaints for the state fiscal year of July 2016–June 2017, but did not provide any further information.
Cindy Pajak said she contacted the state ombudsman, but didn’t get much satisfaction.
“They have their rules and regulations, but they don’t have enough people to go around to these facilities,” she said.