A future without long-term care arbitration agreements

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Tim Mullaney
Tim Mullaney

The White House has not banned arbitration agreements in long-term care. But if a recent executive order got providers thinking about life without these contract provisions, that might be a good thing.

President Obama announced the executive order on July 31. Basically, some companies doing business with the federal government can no longer force workers to go through private dispute resolution (arbitration) rather than go through a court of law to resolve sexual harassment and civil rights disputes.

In response to this order, the National Consumer Voice for Quality Long-Term Care issued a statement. The consumer advocacy group applauded the order, saying it is a “call to action” to get Congress and the White House to outlaw “the harmful and all-too-common inclusion” of arbitration clauses in long-term care admissions agreements.

I wrote a McKnight's news story about Consumer Voice's response, and then I heard from the American Health Care Association/National Center for Assisted Living. The association sent me a statement about the executive order and said they'd received some questions related to my article. I updated it to be more blunt that long-term care providers would not be affected. (You can read the updated version here.)

Here's one possible source of provider confusion: If this executive order does not apply in any way to long-term care, why would Consumer Voice bother to send out a lengthy statement about it at all?

The cynical take is that the order just provided a convenient excuse for the group to again get out its message — specifically, that pre-dispute arbitration agreements “prevent consumers from holding facilities accountable for abuse, neglect and substandard care through an open and unbiased legal process.”

The less cynical take? The executive order actually is a big deal, very worthy of comment. It's gotten scant media attention, especially when compared with recent executive orders on the minimum wage and workplace discrimination. But this latest order actually is more “sweeping” than either of those, according to an employer-side law firm quoted by Slate.

In fact, the order is “one of the most important positive steps for civil rights in the last 20 years,” said Paul Bland, executive director of public-interest law group Public Justice.

The pro-business Supreme Court has been “encouraging” the use of arbitration through its rulings over the last two decades, Bland told Slate's Emily Bazelon. The executive order combats this trend and will result in “millions of employees having their rights restored to them,” he said.

One Supreme Court ruling, in 2011, gave the green light to arbitration clauses in the fine print of contracts. This is one of Consumer Voice's primary complaints — that prospective nursing home residents and their family members unwittingly agree to arbitrate disputes due to clauses buried in the voluminous admissions paperwork. But when it comes to arbitration agreements in long-term care, the Supreme Court has given its blessing mainly through inaction, as McKnight's Editorial Director John O'Connor pointed out in the latest issue.

As a consumer, I'm sympathetic to the Consumer Voice arguments. But I also am sympathetic to the vulnerability of providers admitting many individuals at a high risk for complications or other undesirable outcomes. And I can see why providers may fear they won't get a fair hearing when a talented attorney gets before a jury to describe the supposedly terrible care that a frail elder received.

I assume providers use them because they really are effective money-savers, but it seems to me these agreements are toxic for public relations. And as Malcolm Gladwell fans know, malpractice lawsuits against doctors seem to be linked less to actual poor medical outcomes and more to patients' feelings of being disrespected. Being asked to sign away my right to legal recourse would not lead me to feel very respected in my initial interactions with a long-term care provider.

Given the Supreme Court lineup, the total paralysis of Congress and the limits of presidential power, it seems highly unlikely that arbitration agreements in long-term care will be outlawed any time soon. But Bazelon said that the executive order might “someday inspire Congress to throw the blanket over everyone” with regard to pre-dispute arbitration agreements.

I know that the issues in play here are complex, and businesses can be expected to take whatever steps they can to avoid messy, expensive court battles. Still, I hope some providers act as though that blanket really were coming down, and they deemphasize arbitration agreements in favor of other strategies to avoid lawsuits — perhaps by fostering consistently respectful relationships with residents and family members.

Tim Mullaney is McKnight's Senior Staff Writer. Follow him @TimMullaneyLTC.

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Daily Editors' Notes

McKnight's Daily Editor's Notes features commentary on the latest in long-term care news. Entries are written by Editorial Director John O'Connor on Monday and Friday; Staff Writer Tim Mullaney on Tuesday, Editor James M. Berklan on Wednesday and Senior Editor Elizabeth Newman on Thursday.

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