June 18, 2008

Senator Robert P. Casey, Jr. Statement
for 6/18/2008 Joint Judiciary Subcommittee on Antitrust,

Competition and Consumer Rights and Aging Committee

Hearing on S. 2838, the Fairness in Nursing Home Arbitration Act

Mr. Chairman, thank you for scheduling this hearing to examine S. 2838, the Fairness in Nursing Home Arbitration Act. This is a critical issue that directly affects the well being of older citizens in long term care across the country.

Pre-dispute mandatory arbitration clauses are becoming more common in long term care facility contracts. These clauses are legally binding in disputes that can arise between the nursing home and older citizens, binding them to arbitration for the resolution of disputes and eliminating the option of litigation. When older citizens are being admitted to nursing care facilities, they can easily sign contracts containing these clauses without complete or even minimal understanding of what they mean. It is often only when older individuals have suffered mistreatment at these facilities that their families discover the details.

Older citizens facing the daunting paperwork of admission to a nursing facility may be on medication that impacts their clarity and judgment and they do not always have the ability to read through all the papers they are signing. They may simply want to sign the papers as quickly as possible so they can rest. Sometimes they are accompanied by family members or friends who are able to assist them and read through the documentation, but that is not always the case. In either case, it is difficult for the average person to understand the implications of mandatory arbitration clauses buried in 40 of 50 pages of admissions documents. Even when a friend or family member is there, their focus is often on the services a nursing home offers and getting their parent, spouse or friend settled. They are not necessarily thinking about future disagreements they might have with the nursing home.

These pre-dispute mandatory arbitration clauses are so suspect that the American Arbitration Association does not support agreements requiring arbitration in disputes over nursing-home care and has a specific prohibition against arbitrating a case based upon a pre-dispute mandatory arbitration clause in a health care or long term care contract.

There have been over 100 cases reported in which nursing home residents have challenged arbitration agreements, citing negligent or abusive care by the facility. Courts are often unable to give residents satisfactory redress, even in cases when the resident lacked the mental or physical ability to understand what they were signing.

The incidence of pre-dispute mandatory arbitration clauses in nursing homes is rising. Arbitration serves a valuable role in resolving disputes but not when it robs vulnerable older individuals, without their legitimate consent, of appropriate legal redress against wrongdoing. We must work to ensure our older citizens and their families have appropriate remedies to address any mistreatment that might occur in long term care facilities.

In closing, Mr. Chairman, I again want to thank you for your continued attention to our older citizens. We must keep working to ensure they receive high quality care in nursing homes and other long-term care facilities and help them find appropriate recourse when that does not happen.