Consumer Federation of California

CFC supported AB 2947 (Eng) which would have prohibited the requirement that persons admitted to nursing homes agree to arbitrate any dispute arising under the Elder Abuse and Dependent Adult Civil Protection Act. The governor vetoed the bill.

The Seventh Amendment to the United States Constitution guarantees the right to a jury trial for civil disputes. Many businesses today require consumers to sign contracts that waive their right to have their day in court, and instead force consumers to seek redress of grievances in an arbitration proceeding. Arbitration is a hearing before a professional neutral expert, who is granted the power to resolve the dispute. Arbitration rules of evidence are different than the rules in a courtroom. By definition, an arbitrator is not an aggrieved consumer’s peer.  

Arbitration can work well to resolve disputes between parties that have roughly equal resources and equal occasion to use arbitration (for example to resolve labor disputes or business disputes). When a consumer brings a dispute to an arbitrator, the deck is more likely to be stacked in the business’ favor.   Arbitrators make their fees by charging both parties for their services. A nursing home resident is not likely to bring more than one dispute before the arbitrator. The nursing home operator may be defending dozens or hundreds of cases through arbitration. This makes the nursing home operator the source of repeat business for an arbitrator, who may be influenced by a desire to have repeat business when considering the merits of the case. Arbitration costs can be expensive, and are not recoverable by a consumer who wins a case.

CFC believes that arbitration can provide an alternative dispute resolution option, provided it is mutually agreed upon by both parties at the time the dispute arises. We oppose mandatory pre-dispute arbitration clauses as a condition for a consumer to obtain a service or product.

The bill would have prohibited a residential care facility for the elderly (RCFE) from requiring, as a condition of admission or continued residence or care at the facility, an elder or dependent adult (1) to waive legal rights, remedies, forums, duties, or procedures under Elder Abuse and Dependent Adult Civil Protection Act (EADACPA), including the right to file and pursue a complaint with authorities or the right to file and pursue a civil complaint, or (2) to limit the authority of the state or any other public agency  to investigate and pursue claims alleging any violation of EADACPA. 

Residential Care Facilities for the Elderly (RCFEs) are licensed homes that provide care, supervision, and assistance with activities of daily living, such as bathing, dressing, or grooming. RCFEs may also provide incidental medical services under special care plans. RCFEs serve older adults over the age of 60, and persons under the age of 60 with compatible needs. Although all RCFEs are licensed by DSS, the category includes assisted living facilities, retirement homes, and board and care homes. RCFEs can range in size from six beds to over 100 beds. It is estimated that up to 11 percent of those over age 80 and 24 percent of those over age 85 will live in nursing facilities for some period of time. California currently has 7,757 licensed RCFEs. The Community Care Licensing Division of the California Department of Social Services regulates RCFEs.

Skilled Nursing Facilities (SNFs), also known as nursing homes, are considered health care facilities licensed under Health & Safety Code Sec. 1250. SNFs provide services that cannot be dispensed in assisted living, board and care homes, or residential care facilities. Typically these services involve managing complex and potentially serious medical problems such as infections, wound care, IV therapy, and coma care. They offer both short and long term care options for those with serious problems and disabilities such as quadriplegics, MS patients, ALS patients and others who are bedridden and are unable to do anything on their own.                               

Compared to SNFs, RCFEs are very poorly regulated, and, where there are regulations, the Community Care Licensing Division of the Department of Social Services’ track record for enforcement is dismal. The result is that many victims of elder or dependent adult physical abuse, neglect, or financial abuse have had to seek relief or redress through civil actions under EADACPA. However, in the face of EADACPA actions, RCFEs began to ask their new and current residents to sign admission agreements that contain binding arbitration provisions and waivers that prevent full court access to evaluate claims of abuse or neglect. AB 2947 would have prohibited RCFEs from requiring, as a condition of admission to or continued residence and care at the facility, the waiver of legal rights and remedies by an elder or dependent adult or his or her representative as against public policy.          

A 2008 study prepared for the California Healthcare Foundation concluded that "the current system is not meeting the needs of CCLD (Community Care Licensing Division of the California Department of Social Services), consumers, providers, or policy makers, nor is it efficient or cost-effective,"  and that "resident characteristics so essential for quality assurance are not integrated or accessible." Random inspections of RCFEs now occur only once every three years, and due to the looming budget cuts at the time, it is estimated that random inspections would occur only once every seven years.

Because of the poor record of enforcement, private attorney involvement in representing RCFE residents is particularly crucial. The EADACPA provides special  remedies in an action for relief from physical abuse, neglect, or fiduciary abuse of an elder by a defendant  who is found guilty of recklessness, oppression, fraud, or malice. In an effort to prevent residents from being able to sue for abuse or neglect, residential care facilities are asking new and current residents to sign admission agreements that include binding arbitration provisions which prevent court access to evaluate abuse claims. AB 2947 would have ensured that residents have the full protections afforded to them under EADACPA.