this hearing of the committee on the judiciary subcommittee on commercial in administrative law will now come to order without objection the chair will be authorized to clear recess of the hearing at any time i will now recognize myself for a short statement during this congress subcommittee has held for hearings on issues and legislation related to the federal arbitration act we have heard from attorneys professors and individuals about unfortunate experiences with the arbitration process characterized a witness from our auto arbitration hearing just grabbed her troubling situation of trying to remedy the purchase of a faulty car from an automobile dealer jordan for a witness from our consumer hearing thought she had purchased her dream home which turned out to be poorly constructed poorly constructed nightmare and a legal headache to repair and deborah williams a witness from one of our legislative hearings testified that while she thought she had a bright future after purchasing a coffee beanery for franchise the extreme contractual requirement she could not afford to meet resulted in her losing the franchise and landing in financial ruin although ms rice ms fogle and ms williams initially experienced emotional distress during their predicaments it was in seeking a cure to their problem that they experienced financial suffering each learned that mandatory arbitration agreements can disadvantage consumers and franchise owners and make their hope of a fair resolution nearly impossible sadly the mandatory arbitration clauses in their contracts prevented them from regaining their previous financial stability and with it their emotional security unfortunately the inclusion of arbitration clauses in long term care facility contracts is even more emotionally heartbreaking by twenty forty the demand for long term care services will more than double the long term care industry is increasingly pleading pre disposed arbitration clauses clauses in it's take it or leave it admission agreements for perspective residen and for desperate family members who are unable to provide adequate care in the home setting the need for an immediate placement for the loved one makes the take it or leave it choice really no choice at all families who are in the midst of heartbreaking of the heartbreaking decision to place a parent in a nursing home rarely have the time or wherewithal to fully and thoughtfully consider mandatory arbitration clauses simply dealing with the emotional and traumatic process of searching for a long term care facility makes it impossible for residents and their families to worry about the potential loss of their constitutional right to a jury trial what's real and immediate is not some future dispute but the proper care of a loved one the emotional toll and the sense of vulnerability when moving a loved one into the care of strangers at a nursing home is something that i am all too familiar with my father who has been diagnosed with alzheimer's was recently placed in turn their sing home and one of the last things i wanted to worry about when searching for that perfect placement was whether he was forgoing his legal rights instead i wanted to focus solely on the quality and range of services the facility would provide him as it turned out my family chose a facility that met our requirements but also had a mandatory arbitration clause in its contract and i want to make it clearly known that i am completely supportive of the principals of arbitration and the arbitration process however the process should remain fair parties to a contract should have the option to choose whether or not they arbitrate their disputes for these reasons i introduced h r sixty one twenty six the fairness the nursing home arbitration act of two thousand and eight to make pre  mandatory arbitration clauses in long term our contract on him for civil and to restore to residents and their families their full legal rights this legislation would allow families and residents to maintain their peace of mind as they look for that perfect long term care facility to note that h r sixty one twenty six is supported by several significant groups who advocate on behalf of seniors and consumers including r p which is providing a witness up this afternoon's hearing the national senior citizens law center the all timers association and the national association for consumer advocates additionally senators mel martinez and her paul have introduced a similar bill in the senate twenty eight thirty e accordingly i look forward to hearing from this afternoon's witnesses about arbitration agreements and contracts between long term care facility and facilities and residents and about their views on h r sixty one twenty six at this time i will now recognize my coll great friend of floridians and people throughout the country i want to tell you that no state has a greater interest in balancing the needs of the elderly than the state of florida we're sort of the demographic bellwether for the rest of the country in terms of an aging population and we're going to sometimes do it right and sometimes get some things wrong and hopefully we can fix it when we get things wrong but simultaneously the rest of the country can learn from our successes or failures as well the question in today's hearing is not so much about the big picture question as to whether or not we ought to essentially prohibit the use of produced mandatory binding arbitration in nursing homes and assisted living contracts the fairness of nursing home arbitration act essentially as i understand it would get the current balance that congress has tried to put in place between the interests of on the one hand providing affordable access to elderly care and also protecting the rights of victims of abuse misfeasance and malfeasance in homes i'll tell you that to florida seeing the effects of costly litigation on the one side and one point out a crisis of nursing homes going out of business on the other hand i think that there's no more eloquent spokesperson than mr connor for what happens when the people that are least able to defend themselves at the last days of their life are abused or neglected and there is a balance there and let me say th because i do have to go but i've read the testimony and will be interested in the way this develops when i say this about my friend ken connor he sounds simply like plato when talking about most things like austrian economics for example but  plato described great rhetoricians and he said that there were three parts of any great rhetorical statement but one is the ethos the second is the ethics of the speaker and the credibility second is the pathos or the emotion that they could solicit finally the logos i find both on ethos and pathos we have an absolute all started day my friend ken connor we just sometimes have differences on the logos and the logic of how we're getting to a common goal and with that i'm grateful to the ranking member to the chairman again my friend ken connor gentleman yells back and i want to say mr feeney somebody who represents a district in florida i understand that these issues are probably at the forefront of  f senior issues in your state and i appreciate your concern about the bill i just wanted to make to point out one small point about the bill the bill does not got arbitration it merely gives patients the opportunity to choose whether or not to arbitrate their disputes we're talking only specifically about predispose mandatory binding arbitration agreements i believe mr johnson has an opening statement mr johnson is recognized for five minutes  thank you madam chair and again i would also like to echo what you have said sixty one twenty six the fairness in nursing home arbitration act of two thousand and eight would not be good arbitration as an alternative dispute resolution process it would simply bar predispose you to mandatory arbitration agreements in nursing home agreements and i want to thank you madam chairwoman for holding this hearing today and throughout this session the subcommittee has failed several hearings on previous bute mandatory binding arbitration agreements we've explored the use of these agreements in automobile leases in purchases consumer employment and franchise agreements and within the in the fields retirement benefits and what has resonated throughout all of these hearings is clear pre disposed mandatory arbitration agreements have been used across the board by businesses to strip individuals of their constitutional right to a jury trial it's an equal  madam chair but also millions of families across this country who have and will be faced with the difficult and emotional decision to place their loved ones or loved one in a nursing home or assisted living facility oftentimes finding the appropriate facility is is that the forefront of people's minds not the possibility that they may be foregoing their legal rights in the case of a dispute that may or may not arise yet as families make these difficult decisions long term care facilities have found yet another way to insulate themselves from any possible legal action if they dispute should arise and we are all aware of th tragic stories of able to care abuse neglect and death but up until recently families have been able to rely upon our judicial system to secure a justice as we will hear today from our witness nursing home facilities have been scrupulously inserted binding pre dispute mandatory arbitration agreements into their contracts which allow them to divert victims and their families into a private for profit judicial system which works mainly for the benefit of the nursing home industry this is a place where hearings are held in secret discovery is limited to dis statistics show that most of the time individuals lose and their no no meaningful right to appeal once they do lose what makes this situation even more egregious is that even if misconduct negative neglect is found arbitrators do not have the authority to force facilities to make changes to their policies and practices and as a result other lives may be in harm's way as these facilities remain open for one million residents in long term care today congress must step in and in this shameful practice i want to thank the chairwoman for holding this hearing and i look forward to hearing from eyewitnesses today  arbitration but the industry before says new today we consider these mandatory binding arbitration clauses the nursing home and assisted living contracts once again we find an industry that is promoted to use mandatory binding arbitration after abusive tort suits and runaway jury awards right up the costs of goods and services putting companies and consumers once again the industry is taking steps to make sure that mandatory binding arbitration is used fairly in this case nursing homes often do not use mandatory binding arbitration resolve quality of care issues the american health care association the national center for the center for assisted living have developed a model arbitration agreement promoted it used for several years and the model agreement does not alter rights or remedies available arbitration agreement a cooling off period for longer than found in other sectors other important parts of the picture are also not changed our courts are still overburdened and arbitration is still providing an escape valve for citizens hoping to avoid another respons and drawn out judicial system we should have to do everything we can to protect it not to undermine it in addition the hard representative and credible evidence that mandatory binding arbitration is being widely abused is still missing i expect today that we will hear some testimony about problems incidents i welcome that if there are problems i'm happy to hear about them and with witnesses help i hope that we can understand precisely what they are this is to maybe working well we all know that no system is perfect if we can if we know what problems there are perhaps we can help fix them and avoid attempts to fix things that are not broken the two features are very new first proposals to restrict arbitration nursing home and assisted living sectors pointed straight toward another perennial issue for because of tort abuses what produced mandatory binding arbitration in these sectors restricting arbitration only hand the system back over to abusive trial lawyers second proposals to restrict arbitration of the sectors will produce cost increases rather straight and what many consider the biggest financial crisis looming over the country's future that is exploding medicare entitlement those who seek to restrict arbitration to consider whether if they drive a health care costs in the process will medicare lawsuits either way our seniors lose out i think about i'm sure and i yield back something else back with that objection other members opening statements will be included in the record now please to introduce the witnesses on our panel for today's hearing our first witnesses william hall dr hall of rochester new york is a member of the a r p board of directors dr hall is director of the center for healthy aging and previously served as chief of geriatrics at the university of rochester school of medicine where he is  paul fine professor of medicine doctors dr hall's career in geriatric has largely focused on the preventive aspects of medical care for older adults has been instrumental in facilitating the development of clinical and educational programs in the field of aging that have had a national impact dr hall volunteer experience includes serving as medical director for the r p triumph classic a program of exercise training preparing older adults to compete in triathlons he has extensive experience on numerous professional boards including the american college of says physicians and the american geriatric society and as a past president of the american college of physicians dr hawes testified on numerous health issues before congress the department of health and human services and the national institutes of health we want to welcome you to our panel dr hall our second witness is linda stewart a houston texas resident mr word has been in the nursing profession for twenty years including ten years as a captain in the united states air force having worked as a critical care and e r nurse miss stewart is now administering exercise programs for senior citizens and m b a graduates she is currently working towards another master's degree in nutrition ms stewart's grandmother had  and largest firms which offers a full service of a practice he currently serves as general counsel of an issue a lobbyist for the texas health care association mr gadkari primary areas of practice are government relations long term care and health care law administrative and regulatory long and general civil litigation mr gadkari has been a speaker on numerous occasions at the american health lawyers association annual long term care and the law seminar he is a contributing author to the long term care handbook regulatory operational and financial guidepost second edition mr gadkari received the chairs award at the two thousand and four texas health care association convention for his efforts on tort reform in two thousand welcome you this afternoon and our final witness is mr ken connor mr connor co founded the center for a just society in two thousand and five and serves as the organization's chairman and one of its principal spokesman affiliated with the law firm of w mchugh mr connor recently served as counsel to governor jeb bush in bush versus chavo the matter involving terri chava chavo and the court order to remove her feeding tube mr connor is also an advocate on behalf of nursing home residents and was appointed to florida's taskforce on the availability and affordability of long term care he has served as the chairman of the state of florida commission on ethics and as a member of the state constitution revision commission mr connor has previously testified before the subcommittee on the issue of arbitration we want to welcome you back before the subcommittee i want to thank all of the witnesses for their willingness to participate in today's hearing without objection your written statements will be placed into the record and we're going to ask that you limit your oral testimony to five minutes you will know that we have a lighting system that starts with a green light four minutes into your testimony you'll see a yellow light that gives you a warning you have about a minute remaining and then when your time has expired you'll see the red  light we would ask that if you are caught mid thought or mid sentence when the light turned red we will give you the opportunity to finish your final thought before moving on to the next witness each witness has presented her or his testimony subcommittee members will be permitted to ask questions subject to the five minute limit and with that i'm going to invite dr hall to please give his testimony and please make sure your microphone is on clauses in long term care facility contracts are harmful to residents and their families these arbitration clauses forced the hobson's choice to waive the right to seek redress in the courts or get care in another facility assuming that in fact another facility can be found when older adults suffer declining health or discharge from the hospital and are unable to care for themselves these individuals and families are faced with a very daunting task of finding nursing home care  more often than not these decisions are made in an absolute crisis situation individuals may be pressured to accept the first available bed without enough time to adequately compare nursing homes moreover people seeking nursing home edition are among the of americans in two thousand and six nearly half of all nursing home residents were diagnosed with dementia two thousand and four nearly eighty percent of residents needed help in four or five of the customary activities of daily life recently nursing home residen have had higher disease problems and multiple chronic conditions indicating an increasingly sicker population often on multiple complex medications it's often in this context of crisis and vulnerability that prospective residents and their families face the nursing home admissions process where they are typically given a link to the complicated contract many facilities include provisions in these admission contracts requiring the residents and their families agree to forego the use of the court system to resolve future disputes instead they must agree to submit their cases to arbitration the admissions contract epically is presented as a take it or leave it situation when potential residents in their families are presented with admissions contracts they often do not know th arbitration requirement is buried in the fine print of a multi page document even if the prospective residence in their families are aware that these contracts contain an arbitration provision they often simply do not understand what it means nor do they realise that the many rights and protections they would for go in arbitration it places severe restrictions on many of their rights including the ability to obtain documents and other evidence making it difficult to prove their case and the bases of appeal are extremely limited consumers do not have equally bargain equal bargaining power with the syllabus and are virtually powerless to negotiate the arbitration pro provisions nor are they likely to gain admission to the facility if they want to delete the provision a a r p believes that it's essential for vulnerable residents to have access to the courts when they are injured neglected or abused r p the supports the bipartisan fairness and nursing home arbitration act h r six one two six introduced by chairwoman linda sanchez and representative this bill would make previous future arbitration provisions between long term care facilities and a resident of the city or person acting on their behalf on enforceable in suing that ensuring that residents of long term care facilities and their families are not forced into arbitration this legislation would provide uniform nationwide protection against such pre dispute arbitration provisions a a r p encourages the subcommittee to pass this legislation as you consider it we would like to work with you to help ensure that this bill would apply to all current residents of long term care facilities not just those whose pre disposed arbitration agreements are made amended altered modified renewed or extended on or after the date of the act of the spill thank you and we look forward to working with you on this very important issue for current and future long term care facility residents and their families thank you dr hall we appreciate your testimony mr what i would invite you to give your testimony at this time is your microphone testing for i think you're ready ok chairwoman sanchez ranking member can and distinguished members of the committee thank you for the invitation to testify this hearing about my experience with mandatory in mandatory arbitration in nursing home contracts so that no other family had to go through what my family has been through and have a masters degree in business and i'm a registered nurse i've been a nursing profession for twenty eight years including ten years as a captain in the united states air force as a critical care nurse an emergency room nurse as well as a nursing director in a nursing home my professional and personal experience with nursing home care has left me devastated and my hope is that by telling you my story today your other families will be protected in the future at the age of ninety two my grandmother had emailed her step in seguin texas she was generally very alert and capable and had control over her own financial of theirs however after she had a mini stroke and seemed confused to put her into a nursing home the hospital to find a social worker to my grandmother who said that the only home near us with beds available was the guadalupe valley nursing center after working in a nursing home i can tell you that families have very little or no choice when it comes to where they have their loved ones admitted because space is so limited on the afternoon that my grandmother was admitted into go on the valley the nursing home call my sister at work they told her that she needed to rush down to the nursing home to sign paperwork for my grandmother would be moved out of the nursing home my sister rushed there to sign the paperwork because she didn't want her grandmother to lose her place at the home when she got there she told the nursing home administrator that she didn't want to sign anything financially because she did not have power of attorney over my grandmother's affairs they told my sister that there was nothing in the document except standard forms that needed to be signed that the home could receive my grandmother's solve security check and to make sure that she received medications that she needed they never want to mention that the many documents contain something that would limit our family's legal rights about three weeks and i'm telling you three weeks nursing home employees were apparently moving my grandmother from her bed to wheelchair and her leg was badly injured no one ever reported the incident to anyone else they simply put her back to bed after we went to see her and she was complaining of extreme pain her leg we brought her to the hospital it turns out that my grandmother's leg was broken in two places one of these was a nobley or spiral fracture their results on the bone is completely twisted imagine twisting the cap off of a top of a soda this is a very similar motion the follow up care she received for a leg at the nursing home with inadequate and her injuries was so severe that they had to amputate my grandmother's leg to come a couple of weeks later we couldn't believe that our grandmother had suffered just a veer into a nursing home and it was never reported to our initially treated by the staff after we filed the lawsuit the nursing home tried to force us into binding arbitration that was when we learned that buried in the documents that my sister had signed that day was a binding mandatory arbitration clause my attorney worked hard to call to have the clause overturned but the corporation the nursing home told us that they will appeal all the way to the texas supreme court unless we agreed to settle we couldn't believe that after the way my grandmother was treated we didn't have the right to try our case to a jury we also fear that would be unable to try our case to a jury no one would know that this had happened i wonder how many other incidents there had been like my grandmother's that no one is able to know about because nursing homes are able to hide behind these arbitration contracts i have seen the nursing home industry from the perspective of a family member and also as a director of nursing at a nursing home knowing about the quality of nursing home care or lack of quality of care it seems jesani imaginable to me that corporations that own these homes are allowed to be used residence and not be held accountable in a court of law for their actions this is an example unacceptable to the families that i talk to about this and it should be unacceptable to the members of this committee hopefully my speaking our will is this the effort to protect nursing home residents and their families in the future thank you for listening to my story thank you for your testimony mr we really appreciate it and i know that that's difficult subject matter to talk about but we do appreciate you coming today to testify at this time i would invite mr gadkari to please give his testimony thank you chairwoman sanchez thank you chairwoman sanchez ranking member cannon and members of the committee i'm grateful for the opportunity to be here with you today all the way from merrill texas and offer the long term care professions perspective on arbitration my name is gavin g i'm honored to be here today representing the american healthcare association and the national center for assisted living a growing number of health care and long term care providers include clothing nursing facilities and assisted living residents who have incorporated arbitration clauses into their emissions materials when legal concerns arise we believe that arbitration provides a fair and timely resolution for both a consumer and a long term care provider before i address the benefits of arbitration as an alternative to litigation allow me to take a moment to share the committee that the troubling addict presented today present the exception instead of the rule within the long term care community i'm proud of the advances our profession is made in delivering high quality care and we remain committed to the sustaining these gains in the future when the demand for care will dramatically increase we have been actively engaged in a broad range of activities which seek to hance the overall performance and excellence of the long term care sector is i detailed in more fully my written statement we have partnered with c m s and others to enhance care through this culture of cooperation quality is improving walk keeping patients in their care needs at the center of our collaborative efforts we continue to challenge ourselves to improve and enhance quality and as a side note i'm proud to say in texas last year the use of restraints was the largest percentage decrease in anywhere in the nation in the late one nine profession started having difficulty with increased litigation long term care operators were forced into making difficult decisions including potential closures facilities and corporate restriction in addition to pursuing tort reform the profession sought alternatives to traditional litigation including the use of arbitration in two thousand to eight was in the lead it went out and it said we need to develop if our membership wants to use an arbitration provision we want to go out and develop a reasonable arbitration clause the model agreement in no way alters the rights or remedies available to resod under state tort law not swan so ever saw the same cause of action still have the same damages the only thing that is taken away is the right to a jury trial and it's specifically set out in the agreement it's one page it's in simple plain to read english more importantly the form provides a thirty day out so if they sign the agreement and they're pressured into it they have a thirty day time period in which to rescind the agreement mr tz example is unfortunate i'm familiar with the clause that was located there sixty six facilities in that county is close to san antonio and the population is large it's not like rule texas we support the use of arbitration because unlike traditional litigation our members have experience that arbitration is more efficient last adversarial and has a reduced time to settle a recent a on report found that arbitration reduces the times of settlement by more than two months on average and very few claims actually go all the way to in place for more than eighty years we agree that entering to a nursing facility or assisted living residence is often a time of uncertainty and apprehension the notion that family members are threatened into signing arbitration agreements are simply not true as i stated earlier say develop a policy where the agreement would give family members or the patient the opportunity to back out of an arbitration agreement within thirty days also it does not have an effect on the whether the person is admitted to the facility is important for this committee to recognize that the f a a the federal regulation act is not inherently foster or sanction any disregard for additional notions of fair play in fact state courts have done a good job and looking at agreements where they are unreasonable where there are provisions that limit damages where there are provisions that require the loser to pay where that where there is a venue that is unreasonable or a long ways away from the facility this bil discriminates against long term care providers and more importantly the patients greatest arbitration agreement are a viable legal option for long term care consumers and should not be eliminated public sentiment is opposed to limiting the use of arbitration resolve disputes us the u s chamber of commerce poll recently conducted found that given the choice voters would rather have arbitration like the vast majority americans we believe that legislative proposals to limit arbitration and undermine the federal  act is bad public policy we strongly support the use of arbitration and the policy that's in place by this government since the early twenty's thank you for the opportunity to offer these comments today and i look forward to responding to your comm appreciate it and i would now invite mr connor to please give his testimony thank you madam chairman and ranking member cannon members of the committee appreciate this opportunity to come and share some thoughts with you about this propose bill if you believe that accountability and responsibility run hand in hand you ought to support this bill if you believe that wrong doers ought to be held fully accountable for the consequences of their actions and that innocent parties who are the victims of wrongdoing ought to be fully compensated for what they've suffered then you ought to support this bill the sad fact of the matter is is that we have a crisis of care and long term care facilities in this country that the energy and antipathy that you have for abusive trial lawyers would be redirected to abuse of nursing homes and i've seen pressure all servers that were completely unavoidable that were his biggest path plates that went all the way to the bone that were so putrid and foul smelling that when you walk down the hall you could see you could smell the resident before you could see him i've seen residents who suffer from mount attrition and  the abuses that we see in long term care facilities around this country are horrific and they are only going to grow due to the demographic and economic and cultural pressures that are coming to bear the available in the medicare and medicare medicare and medicaid programs and even as we have shifted from a sanctity of life ethic in this country to a quality of life ethic in this country o p people don't typically score very well under quality of life calculus they don't perform well under functional capacity studies and they are more and more vulnerable to exploitation and will suffer as these pressures come to bear in the future i think it's important to understand that historically the courts have been one of the key means of holding wrongdoers accountable and ensuring that they were required to compensate innocent victims for the consequences of their own  doing what has happened in the long term care industry is that having been faced with the high price of that kind of accountability the long term care industry has taken advantage of the elderly and their families at perhaps the the most vulnerable point in time which is when they bring their loved ones for admission to a long term care facility it's a time that is fraught with tension and anxiety emotions run high  e prospect of resident is fearful of being placed in an institution the family feels guilt and grief at the fact that they can't meet their needs families and residents are commonly presented with a fifty to sixty page admissions packet the arbitration agreement that predispose arbitration agreement is saying which toward the end it's rarely ever explained or if explained is not in terms on light those that mr cannon use it's to prevent having having to involve greedy trial lawyers and to save time when in fact the purpose is to cover the flanks of abuse of no holmes and to limit their last billet and minimize their exposure for their wrongdoing against the frailest and most vulnerable members of our society urge you with every fiber of my being to stop this in equitable and unjust practice there nothing wrong in fact i would encourage as would the chair arbitration as an alternative dispute resolution what's a dispute arises in the parties know what's at stake i for one having practiced law for twenty thirty five years and being a conservative republican continue to retain confidence in our fellow members of our society believe that good sense and ordinary judgment common ordinary people who are members of our society are really quite excellent they understand when someone has been wronged and they understand how to assess and value that wrong and they understand the importance of holding wrongdoers fully accountable for the consequences of their actions thank you madam chair thank you mr connor we appreciate all of your testimony we're going to begin our round of questioning and i'm going to begin by recognizing myself first for five minutes of questions hall i'd like to start with you in your written testimony which i read last night you discussed a very sad situation involving the death of respect her soon after she was admitted into a new mexico nursing home and based on your experience i'm curious to know is the example of ruth paine or common where an arbitration clauses included in the admission documents the death of the nursing home resident is caused by staff negligence and the family then successfully appeals to a court to declare the arbitration clause unenforceable is that the typical scenario well i can't say that it's the typical scenario but it's very clear that there is a great variability how the courts look  at these arbitration agreements so that there is no uniform national standard it varies tremendously but in point of fact there is enough precedent to suggest that in many cases the limitations put on individuals and their families with pre disputed arbitration agreements severely limits their ability to get any redress whatsoever thank you dr hall i really want to thank you for being here today and telling us your story we've had other witnesses appear before the subcommittee to tell us about their horror stories with mandatory binding arbitration but none of them has had the experience that you have had with the death of a family member because of that and i  really think it shows an incredible degree of strength to come and testify now that you're aware of the arbitration clauses in the nursing home and nursing home contracts generally have you spoken with other people other  all i think it's important understand that federal arbitration trumps state law and as a practical matter the provisions of state law that would provide greater protection for nursing home residents are often preempted by the federal arbitration and the provisions of the arbitration agreements that are entered into secondly with respect to this so called thirty day cooling off period when people have an opportunity to rescind the agreement the first time that most families learn that they are a member of their family signed an arbitration agreement is after a lawsuit has been filed and the nursing homes again if if if they view arbitration is such a great means of alternative dispute resolution then they should embrace it after the dispute has arisen not before it's absolutely unconscionable  arbitration to resolve disputes and i just want to draw your attention to a poll that they conducted they conducted a poll of arkansas residents in january two thousand and seven which found that eighty five percent of respondents strongly support the right of nursing home residents and their family to take nursing homes to court for neglecting and abusing nursing home residents and a more recent may first two thousand and eight peter hart research associates incorporate d revealed that given neutral information about arbitration sixty six percent of respondents disapprove of mandatory binding arbitration so i just want to point that out because i think that  get reiterate that when given neutral information about about arbitration sixty six percent of respondents disapprove of binding arbitration my time has expired so at this time i will  of the person but how long after happen did your family discover that your grandmother was in pain yeah my grandmother was only in a nursing home approximately three weeks when they actually we discovered that there was something wrong with her leg so  what he said she didn't even make the thirty day period she was there three weeks when they would it could have been like in the first week and she suffered for two weeks oh yes because you don't know how long it's even on the documentation of the nurse complained to the nursing home when we decided that something is wrong and we need to take it to the hospital that's when we discovered it was fractured did you have to work with the nursing home to get her to the hospital oh no i just tell them they were going to take take it to the hospital minority and i knew she was going to go you put her a painful injury but the kinds of things that you're suggesting are the rule of nursing home not saying they're the rule i'm saying that the problems are systemic and pervasive there are many nursing homes that provide good care but there are there are many many instances all over this country where instances of abuse and reckless conduct occur the nursing homes that are providing good care don't need a pre dispute arbitration agreement that is a inherently a system that is pre cooked and that is going to weigh favorably in terms of the outcome for the nursing home and against the resident what i'm suggesting simply is that in those instances where nursing home residents suffer from abuse and neglect they ought to be a level playing field through which they can fully recover from the injuries and i have found that if your doctors what i'm wondering is if there 's not a way that we can do something that creates a system that works better then just either open the door for every trial lawyer and every every minor complaint but on the other hand closes the door to the kind of injuries that mr wertz grandmother suffered and so let me just suggest something that i'm actually quite or said you said that a quality nursing home doesn't need a mandatory arbitration agreement pretty hard to prepare a dispute are there nursing homes that hold themselves out as not having or do you think that the would would encourage people to come forward say we take good care of people that come into our care and therefore we don't need this and advertise the fact that they they give the kind of quality care that would avoid that well look i think  business and that say we don't do mandatory every trade because we take good care well i would certainly encourage that but for other for those that wish to use arbitration as an alternative form of dispute resolution i think question are you aware of any nursing homes that would actually promote the idea of not using the preterist mandatory arbitration because just because they promote quality of care that means is not necessary i not aware of any that have that view and in fact i think that they feel it's to their economic advantage to continue to use this policy and to fall back on the federal policy embodied in the in the  gentleman from georgia for five minutes for his question thank you madam chair ms stewart why why did you agree to settle disputes with the nursing home rather than continue to fight the battling court why and stated earlier that said they were taken all the way to supreme court and we didn't settle so we went back and disputed dispute in my attorney if you would like to ask me things that are more legal he would answer for me but  at the chances that when we land so that was sort of one of the reasons all right and in your opinion did you take less in settlement than you felt was fair well yes because my grandmother was still active you know i think sometimes mandatory arbitration is that the awards are going to come at a tremendous discount to what juries ordinarily would award our experience has been typically that these awards are about ten percent of what would be recoverable by juries bringing nursing home cases often can cost several hundreds of thousands of dollars they are very expensive they're very complex and they are often very protracted and our experience has been that jurors are mortified and horrified at what these people suffer at the hands of the people that they are supposed to be caring for and  oftentimes they will award punitive damages in the attempt to send a message to the nursing home that it's going to cost more to do business the wrong way than it does to do it the right way none of that takes place  setting all right think in this arbitration setting this to get barry is it's pretty much held in private correct that's one of the concepts with arbitration it's a secret process  not a secret process and where there are no published calendars so that the public can come in and observe a public trial if you will like mr connor i've tried lawsuits and involved in litigation and a times it's the exception that a case goes to trial when no no no i'm not and in a arbitration proceeding there is not going to be a published trial calendar in the public doesn't have a notice that this may be something that i'd like to come in and take a look at just just to see how the system works there's not a public docket that would be available however and nursing homes are one of the most highly regulated professions  and i understand then we're talking about now a dispute that arises that has to go and be settled either by judge and jury or by an arbitration panel list or panel and this arbitrator is pretty much selected by the by the nursing home industry career in our form we have we offered up several different alternatives  and those and those on your own your preferred list actually list that limits the arbitration groups that can hear the arbitration case those groups depend on the nursing home industry for the referrals in a nursing home industry pays them isn't it correct that there are fees associated with arbitration just like anything else and they're paid by the service they paid for the service and they're paid by and they would not have that stream of income where it for the referrals from the nursing home industry isn't that correct that's a broad brush because there are a lot of services the rules of evidence don't apply necessarily depends on the service that you are not it's not mandatory the one we recommend uses has procedures has noticed provisions and has evidence doesn't happen in the arbitrator perhaps may not even be an attorney he certainly has no judicial code of ethics to abide by does does he or she most arbitration services require the law there's no limitation on every or the remedies that are available in litigation and most at the time of the gentleman has expired i think perhaps we'll do second run the question if they're interested in further questions at ages this issue of quality of nursing home care is more and more on the minds of americans and i actually hear about it a lot from people who have older parents and who worry  provided to us indicates on page seven you indicate that decisions in facts about the dispute are typically are confidential so an issue that mr  gadkari is just given a contrary point of view on can you tell me what do you base that testimony upon well in the surveys that a a r p has done and speaking as a representative for forty million members  it's pretty clear that the all of the data all of the determinations all of the rationale is very rarely available to families without recourse to some kind of very expensive legal help which very very very few of them can afford you know i think there's that you oftentimes in having some public information out there and at least you know people know things and they can make decisions accordingly so i think that's a serious downside for the arbitration i'm not opposed to arbitration in every case there's a real value sometimes for arbitration to do this especially for people who are ill they wouldn't be going into the facility if they weren't in trouble that in some way there is an inherent power differential there that disadvantageous to the nursing home resident and you know i just think you know understanding that there can be value on in arbitration that would be served you know if there were an incident and i just i know people it's expensive to bring lawsuits and if you don't win you have to pay for it and so there really is a disincentive to to proceed in a frivolous manner and and i know i think there are some just built in protections in our in our system so i think certainly mr connor your testimony is riveting i no longer have either one of my parents but i was my father in law's ninety years old and the saying it's not how old you are but how your old couldn't be more true about him i mean he is just tremendously fit he works half time i mean he's just awesome but you know there are many people his his age who aren't so fortunate in the two to think that you would have that kind of experience is really  chilling in to certainly we i've i've had family members in facilities that were excellent and i don't want to over par the nursing home industry i mean obviously we need that sector of our our country to to be well run but i think that for those who would not really adequately care for a vulnerable older person who is so dependent on the care i mean there has to be a deterrent from that and yes there's regulations but you know i earlier this year looked at it really at the question request of many of my constituents that looking at some additional nursing home provisions because of problems in the regulatory scheme although well intended in many cases in various states is not working that well and i don't know misconduct you would have a comment on that the in some of the states was looked i mean there's it's not really very tight well in fact consumer reports did a study a couple of years ago and reported that in the since their previous study they found that nursing home care declined that inspections were down that citations were down that the gravity of the citations that were down that the survey system was being relaxed for the benefit of the homes that  many instances this relaxation stemmed from political motivations and the sad reality is that i think we have to keep in mind that human nature is that if wrongdoers are healthfully accountable for the consequences of their actions they're likely to repeat it and the problem is that when you start out with somebody who is frail and vulnerable in the beginning the magnitude of the damage is they suffer escalate very very quickly and promise you that if if if these injuries and damages were to be manifest at places like guantanamo or abu ghraib there would be no in the congressional hearings or the headlines that would be covering that i was a little slow on the uptake there thank you i just have one final question that i want to close the hearing with and i'm going to pose it to all of our witnesses what is so wrong with saying to the consumer or the potential resident patient if you want to choose to arbitrate something should happen to you in your care and you should want to choose to arbitrate you can you can choose to do that at a later time but arbitration that is willingly entered into by the patient in the family and the facility well you know our position there is that people can become informed and have still have the have not given up the right of legal redress of course that that is an option and it might work in many ways circumstances it's really the pre dispute binding arbitration the bothers us and bothers the organization it is indescribable the situation that people are in when they make this decision there are many perversities the medicare system hospital really insist that people leave the hospital when there is no legitimate medical reason why they should be there  this often comes as a surprise to patients even those who are completely lucid and often isn't this a situation and this entire sort of decision has to be made in twenty four hours in a situation that none of us would tolerate in any other venue that i'm aware of so that's what makes the special and why in particular the pre dispute arbitration binding clauses really bother us a great deal thank you dr stuart you were forced mandatory binding arbitration would you have preferred after a situation arose with your grandmother to have the choice whether or not you wanted to pursue litigation or arbitration and i think that's a problem i have with it i don't think it is wrong it is the to put the paper in there and it has signed it and then didn't tell us and i also told the nurse because i am a nurse i told the nurse on duty you know this was an accident until they covered it up then it became a crime and she looked at me as though she'd seen a go because community is just boggles my mind is that i will give you a medication in deceive you and make you think it was one medicine and i was giving you something else the deception is what bothers me thank you mr gabber what's what's the problem you're such a supreme court we agree with congress that when they enacted this law it had the needs of the consumers as well as others in mind so not just business was intended back in one thousand nine hundred for when the federal arbitration act case where you have to make quick decisions or forego the opportunity to have certain care and there are often times arbitration a group of consumers aren't even aware that they're the and they're worried about their health yes on loves to respond the chairman of the sanchez i have a grandmother in a nursing facility and my parents went through the process of placing her and it's a process doesn't usually happen overnight you don't show up to a nursing home like you show up to an emergency room in an ambulance with a whistle siren in the lights flashing it's a process generally most nursing facilities allow you're coming to visit and looking for a facility elect to look at the packet may even give you a copy to take home so they have the opportunity to look at the package one of the things that was said today was that the mission fact is about fifty pages long i want your help in asking for your there one of the reasons the missions package is so long is that the federal regulations and state regulations require all sorts of disclosures involving medicare and medicaid and one of the things that's interesting medicare and medicaid are so complex and i beg for your help there for nursing home residents medicare and medicaid part part b part d there's all other provisions in there they have to be explained in sign off by the family responsible party of or the  patients themselves in that problem your point is well taken although i will say however they're generally no explanation given the mandatory binding arbitration agreements that are slipped into these very long contracts and that that being the difference mean they're not generally slipped in in our recommendations to the nursing facility or membership was that you set up a process and a policy where they are going to the membership but the recommendations that you make aren't binding upon your membership they don't have to follow them they can throw them out the window it's made up of members that are nursing facilities and that leadership directed us to come up with a reasonable approach and that's what we do but but they're not bound by the recommended that they're going to be bound by th this one is very vulnerable and is in special need of protection in any other setting if if someone were to prey upon a frail we vulnerable person whose eyes were damaged whose hearing was bad and whose competency was in question and who might be on medication that impaired their judgment and deprive them of their money or substantial legal rights we'd be prosecuting them but thanks to about federal preemption and how that works in your contract the federal return that that's its sole purpose is to seek out or prevent states from in acting laws that discourage arbitration this federal arbitration act as done in certain states that have restrictions or disc provisions that discourage arbitration it prevents not all states have in fact most states have a general arbitration provision that is very similar to the federal return which says that prima will be construed based on the contract law that states and that occurs right now reserve only preempt in situations laws that states have passed that discourage arbitration the states themselves still control the enforceability the arbitration and what we're setting up here is a provision under the federal arbitration act that targets a specific industry and discourages the use of prey dispute arbitration whenever they are encouraged everywhere else that i think is the one of the main absolutely and we're very concerned about it now and even more concerned for the future that's one of the i think important challenges to our generation to begin to solve this problem for the next fifty years but we shouldn't solve it on the backs of the nursing home residents and their families they can be victimized there there are many other approaches to reducing the cost of long term care and it doesn't have to be entirely dependent on predispose dispute arbitration contracts i think you i know that my staff would like to work with you on some of those alternatives this is a serious problem yes i think the fundamental made in this county like to respond to this we might have is that you think that lawyers are going to come in and protect the most vulnerable when in fact what they will do is come in and take the most lucrative cases and that may be a motivation to nursing homes to not not allow processes that hurt the vulnerable but i don't see it as a system that actually helps those in homes avoid or develop the practices that would avoid the kind of problems that are going to result in lawsuits i think congressman can if you adopt a post dispute arbitration policy to the extent that there are cost savings and benefits for those who suffer lesser injuries and who have lower case values that would promote the resolution of those cases the reality is lawyers are business people too and they simply from a fee economic feasibility standpoint can't handle a case that is not likely to yield back the return to the client and of the lawyer who represents them now seems to me that representing not just as a lawyer here but as representing the industry there have to be attempts of people looking at ways to help avoid the kind of problems that stuart is talking about that is you have to a group of people that are looking at this and saying what can we do in the first place you've got an information system that we didn't have ten years ago the internet provides a great deal of information secondly there are interests that your people have in promoting the understanding of arbitration or dispute incontinent incapable of turning herself you could have a camera in a room and family could watch are you as an industry looking at those kinds of issues to help help you guys figure out how to take care of people who raid from robust to incapable absolutely the nursing home profession is made up of people it's not like a production line or anything else where you can go fix something you have to train people you have to count people and when people through embracing quality with our government partners to try to improve care finally you're right about the information out there in the transparency that is so much better than it was many many years ago in my state we have what's called the quality reporting system it's a very detailed reporting system that ranks and puts up the survey history not only health and life and life safety code history for that facility it lists whenever ownership changes so you know when there's things going on with the corporate ownership it also keeps it running track of how the performance of the facility has been in the past and there's been bad for performance in the past it's listed but it also lists if you had zero deficiency there's also nursing home compare which is a medicare side and that side is something relatively new in that it lists similarly in all the deficiencies location of the facility but more importantly recently they started putting staffing right not staffing rushes excuse me staffing  time periods amount of staffing that's being put in place by the facility that's one of the most important tools is how many human beings we have out there taking care of our patients and those those where we're so far where we were before over eighty seven went into effect and when over eighty seven went into effect it was a whole new ballgame things have changed and things are continuing to improve and our association is proving embracing trying to get to quality for patients some of the t problems and doing it outside of context may actually be much more appropriate is that something you have done or would be willing to do dr are works we work together as much as we can endorse times and we have to agree to disagree but there are friends and we try to work together for the best interests of the frail never leave our nation a position is very clear we're interested in quality care for our members and for all older adults united states when that quality of care is compromised and we all secondarily think that there has to be access to the court system period we are always willing and go out of our way to talk to every agency an individual who wants to participate in this dialogue kind of the gentleman has expired i recognize myself for five minutes although i don't expect using the entire five minutes just one last question  and this is for mr connor supporters of mandatory binding arbitration agreements contend that they are a defense against litigation and therefore they keep costs down for them which they ultimately pass down to consumers and in this case apparently resident how neutral are mandatory arbitration agreements if such clauses are seen as a defense to lawsuits well i have to take issue with the premise which outlining those costs the the real reason that these are used in lieu of litigation on the part of the nursing home is not to minimize costs it's to minimize as exposure for lab building is to minimize their accountability it's to reduce the awards that will be levied against them by  a cross section of the community who hears the evidence and as an alternative is that their preference is to have a go to service or provider that they that has not given the standard of care if the award is in arbitration it's a it's a lower amount that's a word to family been a comparable court case is that that's exactly right when they say it's cheaper they mean it's cheaper for the person that did the wrongdoing that's right but it's the cost to the resident so you would agree with dr hall's assessment that there needs to be a way to perhaps the increasing number of facilities and make it cost effective but not on the backs of victims who suffered at the hands of the people there's nothing wrong with making a profit what's wrong is doing it on the back of innocent victims for whom you're supposed to be caring thank you and i will  balance of my time i want to again thank the witnesses for their participation in our hearing today without objection members will have five legislative days to submit any additional written questions which we are going to forward to the witnesses and a that you answer as promptly as you can so that they can be made a part of the record and without objection the record will remain open for five legislative days for the submission of any additional materials again i want to thank all of our panelists for their time and patience and this