AHCA/NCAL: Arbitration a “Reasonable, Intelligent Option” to Resolve Eldercare-Related Legal Disputes
Fairness in Nursing Home Arbitration Act Discriminates Against Long Term Care Patients, Providers
Washington, DC – Claiming that the Fairness in Nursing Home Arbitration Act of 2008 “needlessly discriminates against long term care providers and the patients and residents in our nation’s nursing facilities and assisted living residences”, the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) told the House Judiciary Subcommittee on Commercial and Administrative Law that pre-dispute arbitration agreements are a viable legal option for long term care consumers and providers, and their use should not be eliminated by passage of overzealous legislative remedies.
“Like the vast majority of Americans, AHCA/NCAL believes that legislative proposals to limit arbitration and undermine the Federal Arbitration Act (FAA) are bad public policy,” testified Gavin Gadberry on behalf of the associations. “We strongly support the use of arbitration as a reasonable, intelligent option for both patients and providers to help assist in the resolution of legal disputes, and aggressively oppose efforts to diminish the use of arbitration by American businesses, especially those unfairly targeting long term care consumers and providers.”
In his testimony, Gadberry remarked that the troubling anecdotes presented at today’s hearing represent the exception instead of the rule within the long term care community. “AHCA/NCAL has been working diligently to change the debate regarding long term care to focus on quality… and has been actively engaged in a broad range of activities which seek to enhance the overall performance and excellence of the entire long term care sector,” he continued.
In the late 1990’s, explained Gadberry, the long term care profession was subject to excessive liability costs, which were exacerbated by an increasingly litigious environment. As a result, he said, operators of nursing facilities and assisted living residences were forced into making difficult decisions including potential closure or divestiture of facilities and corporate restructuring. This trend, he observed, was especially true in states such as Florida, Arkansas, and his home state of Texas, where state laws fostered an exponential growth in the number of claims filed against long term care providers – even those with a history of providing the highest quality care.
“AHCA/NCAL supports the use of arbitration because unlike traditional litigation, our members have experienced arbitration as more efficient, less adversarial, and having a reduced time to settlement,” Gadberry said.
In addition, the AHCA/NCAL witness stated that because it vastly reduces transaction costs, “arbitration may also enable patients and their families to retain a greater proportion of any financial settlement than with traditional litigation.” A recent Aon report, he continued, found that currently, 55.2 percent of the total amount of claims costs paid for GL/PL claims in the long term care industry is going directly to attorneys. “This means that less than half of the dollars spent on liability is actually going to the patients and their families. The decreased transaction costs associated with arbitration mean more of any award received goes to the party whom is most deserving – the patient or resident, not their legal representative.”
Stated Gadberry: “We believe that the recently introduced Fairness in Nursing Home Arbitration Act of 2008 (H.R. 6126 and S. 2838) is a misguided attempt to restrict and weaken the Federal Arbitration Act (FAA). We firmly believe this legislation and other efforts to undermine the FAA are bad public policy and a step in the wrong direction.”
Public sentiment, he observed, is also opposed to eliminating the use of arbitration to resolve disputes. In fact, the U.S. Chamber of Commerce’s Institute for Legal Reform recently conducted a national poll which found that “given the choice, voters strongly prefer [82%] arbitration over litigation to resolve any serious dispute with a company.” The bipartisan survey, which was released in April 2008, also concluded that “voters strongly believe Congress should NOT remove arbitration agreements from the contracts consumers sign with companies providing goods and services (71%).”
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) represent more than 11,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and development disabilities. By delivering solutions for quality care, AHCA/NCAL aims to improve the lives of the millions of frail, elderly and individuals with disabilities who receive long term or post-acute care in our member facilities each day. For more information, please visit www.ahca.org or www.ncal.org.