Decree on nursing home suits set to be revoked by Trump

Rule, opposed by industry, preserves legal rights of residents in facilities that accept Medicare, Medicaid


President Donald Trump is moving to abolish a rule designed to protect the rights of some nursing home residents to bring lawsuits if they are abused, neglected or otherwise mistreated.

The Obama administration established the rule, but it has never taken effect because of a court challenge by the nursing home industry. Trump’s administration has since decided not to defend the rule in court and instead moved to do away with it.

Under the Obama rule, nursing homes that accept Medicare and Medicaid payment would have been prohibited from requiring prospective residents to sign binding arbitration agreements as a condition of admission. Also, the nursing homes would have been barred from entering into a binding arbitration agreement with a resident prior to a dispute arising.

By signing such agreements, nursing home residents give up their right to bring lawsuits and agree to submit disputes to arbitrators.

State Attorney General Hector Balderas disagrees with the Trump administration plan.

“New Mexico families should not be forced to choose between care for their loved ones and giving up their legal rights,” he said in a statement. “Arbitration clauses deny vulnerable people access to the courts and allow bad actors to hide from the [public] and avoid the accountability ensured by our justice system.”

The American Health Care Association, which represents the nursing home industry and filed the lawsuit challenging the Obama administration arbitration rule, has said studies show “arbitration is fair and speeds judgments in a cost-effective manner that benefits those injured more than anyone else.”

Santa Fe has two nursing homes – Casa Real and Santa Fe Care Center – that accept Medicare and Medicaid, and both businesses have long histories of providing inadequate care, according to state inspection reports.

The New Mexican reported last month that Casa Real was placed under increased supervision by the federal Centers for Medicare & Medicaid Services and faces a threat of decertification from the insurance programs if it doesn’t improve the quality of care.

The state Attorney General’s Office in 2014 filed a lawsuit against the for-profit operator of Casa Real and Santa Fe Care Center, alleging it has defrauded Medicaid by failing to provide even basic care to residents. The operator, Preferred Care Partners Management Group of Plano, Texas, has denied the allegations. The case is set for trial in the spring.

Preferred Care didn’t respond to a request for comment on arbitration agreements for residents of its Santa Fe homes.

Casa Real and Santa Fe Care Center have been sued at least 15 times for wrongful death of residents since 2003. The nursing homes settled at least some of those cases out of court by making undisclosed payments.

The Obama administration rule limiting arbitration agreements for residents of nursing homes that accept Medicare and Medicaid was to take effect last November, but a U.S. district judge in Mississippi blocked the rule from being implemented pending the outcome of an industry lawsuit challenging the authority of the Centers for Medicare & Medicaid Services to impose it.

The judge said he believed the rule was based upon sound public policy, but the federal centers were unlikely to prevail at trial on the authority issue.

The Obama administration appealed the judge’s order to the Fifth U.S. Circuit Court of Appeals in New Orleans, Louisiana, but the court dismissed the appeal in June at the request of the Trump administration. A few days later, the Trump administration published notice to rescind the arbitration rule.

The Centers for Medicare & Medicaid Services in June also announced proposed revisions to arbitration agreements for nursing homes. It said the revisions “would help strengthen transparency in the arbitration process, reduce unnecessary provider burden and support residents’ rights to make informed decisions about important aspects of their health care.”

Under the proposed revisions:

• All agreements for binding arbitration must be in plain language.

• If signing an agreement is a condition of admission, the agreement must be in the admission contract.

• Agreements must be explained to residents or resident representatives in languages they understand and in a form and manner they understand.

• An agreement cannot prohibit or discourage a resident from communicating with government nursing home inspectors or advocates.

• All arbitration decisions would be open to inspection by the Centers for Medicare & Medicaid Services.

The period for public comment on the proposed revisions to requirements for arbitration agreements closed Monday (Aug. 7). The Centers for Medicare & Medicaid Services will consider those comments in issuing its final versions of the revisions.

Contact Cole at (505) 986-3022 or tcole@sfnewmexican.c­om. This story was first published in the Santa Fe New Mexican, a sister publication of The Taos News.