December 2011 Archives

December 12, 2011

Florida Supreme Court Rules Courts Must Decide Whether Nursing Home Arbitration Applies - Shotts v. OP Winter Haven

As a Philadelphia injury lawyer, I often handle nursing home lawsuits in which the victim or a relative has signed an arbitration agreement with the nursing home. This is an agreement to settle disputes in a private version of the public courts we're used to, and it is often bad for the victim and family because it allows the nursing home some opportunity to "buy" the ruling it prefers or limit families' rights. As a result, many families are challenging these contracts, especially when they were signed under suspicious circumstances. In the Florida Supreme Court's Shotts v. OP Winter Haven, the family challenged the legality of a nursing home arbitration agreement, and the trial court allowed the arbitrator to decide whether the agreement was valid. The Florida Supreme Court reversed this, finding that the courts should decide whether to enforce such contracts.

Gayle Shotts was for many years the caretaker of her uncle, Edward Henry Clark, who suffered brain damage in a car crash in 1977. He later entered a nursing home, where he died in 2003. The opinion does not detail his death, but Shotts sued for wrongful death and the home moved to compel arbitration under an agreement Shotts signed on Clark's admission. The agreement required rules of the American Health Lawyers Association to be used; that no punitive damages could be awarded; and that any voiding of one provision would not void others. It also expressly said it would be governed by the Federal Arbitration Act. Shotts contended that the agreement was unenforceable because it violates Florida public policy, particularly the limitations on her remedies. The trial court granted the motion to compel arbitration, and the appeals court agreed that the contract was not unconscionable. It added that while the punitive damages portion could be unconscionable, arbitrators could sever it without nullifying the contract.

Shotts appealed. She argued that other Florida courts have found that courts, not arbitrators, must decide whether contracts are enforceable; and that other courts have found arbitration contracts unenforceable. The Florida Supreme Court agreed. Under its own precedent and other Florida precedent, it said, courts must decide whether a valid agreement to arbitrate exists -- even if arbitrators are permitted to decide on other issues of the contract. The high court cited with approval a concurring opinion in the Second District Court of Appeal, arguing that arbitrators should not make these decisions because of the power imbalance under which contracts are signed and the nursing home's ability to write itself a favorable contract. The high court noted that its decision conforms to that of most Districts. On the limitations of remedies, the court also agreed that they violate public policy, echoing several Districts. Some courts have even ruled against the specific limitations on punitive damages and which rules should be used.

Thus, the high court found that Shotts was correct to contend that the contract was unconscionable for violating public policy. Several provisions directly undermine the state Nursing Home Residents Rights Act, the court said. It ruled that any such arbitration contract is unenforceable. It then ruled that under Florida caselaw, the portions of the agreement that violate public policy are not severable, because they are fundamental to the contract. Two judges dissented, arguing that the Federal Arbitration Act should have been controlling and provided a different outcome.

As a Pennsylvania nursing home lawyer, I'm pleased with this outcome. Particularly in the analysis of the conditions under which nursing home contracts are signed, its analysis reminds me of the analysis in the West Virginia Supreme Court, which ruled this year that arbitration clauses in at least three nursing home arbitration clauses were unconscionable. As a rule, families place their loved ones in nursing homes because they cannot care for them at home anymore. Thus, they don't necessarily have the luxury of shopping around; they must make a decision quickly. In addition, most families don't have the legal background to read these arbitration agreements carefully, which means they may not fully understand what they're signing. This opens the door to allow nursing homes to face no repercussions from serious Pennsylvania nursing home abuse. As a Philadelphia medical malpractice lawyer, I hope other states take notice.

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December 6, 2011

Federal Inspector General Calls for Penalties for Nursing Homes That Overuse Antipsychotics

I've written here many times about the overuse of antipsychotic medications among nursing home patients. These are typically prescribed for control of dementia patients with unpleasant behaviors like aggression, which is an off-label use not approved by the Food and Drug Administration. The practice has long been under fire by Philadelphia medical malpractice lawyers because of the drugs' tendency to sedate the patients into insensibility. The drugs also sometimes carry dangerous side effects; eight atypical antipsychotics recently got a warning that they may actually raise the risk of death in elderly patients. So I was interested to read an article suggesting that the Centers for Medicare and Medicaid, a federal agency that oversees those two programs, has proposed penalizing homes that overuse the drugs.

The proposal came in testimony from the Office of the Inspector General of the Department of Health and Human Services, which oversees CMS. The Inspector General, Daniel Levinson, authored a companion study that found a very high rate of erroneous Medicare claims for antipsychotics to treat dementia, that most antipsychotics are used for that purpose in nursing homes and that 14 percent of all Medicare patients in nursing homes had antipsychotic claims. Levinson has publicly argued that this is too high, especially considering the risk of death for elderly people taking atypical antipsychotics. In testimony before Congress Nov. 30, Levinson suggested that HHS penalize facilities that use Medicare to fund improper use of antipsychotics; one penalty could be withholding Medicare payments. The report by the Inspector General's office examined why Medicare Part D insurers don't refuse to reimburse for this off-label use.

As a Philadelphia injury lawyer, I'm pleased that this issue is getting the attention it deserves. Nursing home attorneys have argued for years that the use of drugs as "chemical restraints" is a misuse of medication, which robs patients of their ability to enjoy life and carries financial costs and potentially damaging medical side effects. Indeed, someone else testified at that hearing that antipsychotics are now essentially replacing physical restraints, which have fallen out of favor in nursing homes. Both of these are a form of Pennsylvania nursing home abuse that patients and their families should not allow, given the considerable risks. Families that suffer injury, illness or abuse because of off-label antipsychotic use should consider whether they want to get in touch with a Pennsylvania nursing home lawyer.

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