Thursday, September 29, 2016

Feds move to block arbitration in nursing home contracts; Arkansas heads explode

Posted By on Thu, Sep 29, 2016 at 7:31 AM

click to enlarge MICHAEL MORTON: Nursing home owner undoubtedly won't like new federal rule on nursing home arbitration.
  • MICHAEL MORTON: Nursing home owner undoubtedly won't like new federal rule on nursing home arbitration.
This is big news:  The Obama administration has moved to bar nursing homes that get Medicare and Medicaid money from requiring that residents resolve disputes in arbitration rather than court.

Nursing home owners far prefer arbitration for settling claims of abuse, harassment and death. The nursing home industry is already crying foul — regulatory overreach. Advocates for better care of patients see things differently.

The Arkansas Supreme Court has had a batch of recent cases with some mixed outcomes on compelling arbitration, but mostly in favor of enforcing arbitration clauses. But nursing homes here are pushing strongly in that direction. One fallout has been at least one case where, after a change of ownership, a patient was compelled to arbitration with a company that no longer existed. Still, the court ruled, arbitration must occur.

There's a powerful political backdrop to all this. The nursing home industry has made a concerted effort to elect judges it believes friendly to its views. The result: Five of the current seven members of the Supreme Court received varying amounts of political contributions from nursing homes, led by Michael Morton of Fort Smith, owner of some 70 homes. One justice, Rhonda Wood, reaped more than half of her initial money haul in her campaign for the court from nursing home sources, mostly Morton. She has been asked to get off a nursing home appeal on account of the influence of that money, but so far has declined to do so. She has said she thinks enough time has passed to cure any outward appearance of bias that the money might cause. She's sitting on the Supreme Court challenge of a proposed constitutional amendment to insulate nursing homes from damage lawsuits. The world will watch when she rules on a special master's finding of flaws in the signatures gathered to put that amendment on the ballot.

Attorney General Leslie Rutledge has regularly inveighed against Obama administration rules that businesses find objectionable — clean air and water, overtime pay and more. Perhaps the Republican coalition of attorneys general that frequently sues over federal rules changes will coalesce again on this issue. Morton gave at least $92,000 to Rutledge, as well as vast sums to judges and others.

I'm guessing a lot of Arkansas heads — Morton, Wood, Justice Jo Hart (who credited Michael Morton for her election when she was invested), Rutledge and many others — exploded on this news late yesterday.

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