[Senate Hearing 110-618]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-618
 
         S. 2838, THE FAIRNESS IN NURSING HOME ARBITRATION ACT

=======================================================================


                             JOINT HEARING

                               before the

                       SUBCOMMITTEE ON ANTITRUST,
                 COMPETITION POLICY AND CONSUMER RIGHTS

                                 of the

                       COMMITTEE ON THE JUDICIARY

                                  and

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 18, 2008

                               __________

                          Serial No. J-110-101

                               __________

         Printed for the use of the Committee on the Judiciary




                     U.S. GOVERNMENT PRINTING OFFICE

44-741 PDF                 WASHINGTON DC:  2008
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP, 
Washington, DC 20402-0001


                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ARLEN SPECTER, Pennsylvania
JOSEPH R. BIDEN, Jr., Delaware       ORRIN G. HATCH, Utah
HERB KOHL, Wisconsin                 CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       JEFF SESSIONS, Alabama
CHARLES E. SCHUMER, New York         LINDSEY O. GRAHAM, South Carolina
RICHARD J. DURBIN, Illinois          JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
            Bruce A. Cohen, Chief Counsel and Staff Director
           Stephanie A. Middleton, Republican Staff Director
              Nicholas A. Rossi, Republican Chief Counsel
                                 ------                                

   Subcommittee on Antitrust, Competition Policy and Consumer Rights

                     HERB KOHL, Wisconsin, Chairman
PATRICK J. LEAHY, Vermont            ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, Jr., Delaware       ARLEN SPECTER, Pennsylvania
RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         SAM BROWNBACK, Kansas
BENJAMIN L. CARDIN, Maryland         TOM COBURN, Oklahoma
                     Jeffrey Miller, Chief Counsel
                William Castle, Republican Chief Counsel
                                 ------                                

                       SPECIAL COMMITTEE ON AGING

                     HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon                    GORDON H. SMITH, Oregon
BLANCHE L. LINCOLN, Arkansas         RICHARD C. SHELBY, Alabama
EVAN BAYH, Indiana                   SUSAN M. COLLINS, Maine
THOMAS R. CARPER, Delaware           MEL MARTINEZ, Florida
BILL NELSON, Florida                 LARRY E. CRAIG, Idaho
HILLARY RODHAM CLINTON, New York     ELIZABETH DOLE, North Carolina
KEN SALAZAR, Colorado                NORM COLEMAN, Minnesota
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           BOB CORKER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     ARLEN SPECTER, Pennsylvania
                     Debra Whitman, Staff Director
              Catherine Finley, Republican Staff Director



                            C O N T E N T S

                              ----------                              

                STATEMENTS OF MEMBERS OF THE COMMITTEES

                                                                   Page
Casey, Hon. Robert P., Jr., U.S. Senator from the State of 
  Pennsylvania, prepared statement...............................    74
Feingold, Hon. Russell D., a U.S. Senator from the State of 
  Wisconsin......................................................    17
    prepared statement...........................................    84
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......     2
Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin......     1
    prepared statement...........................................    90
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, 
  prepared statement.............................................    97
Martinez, Hon. Mel, a U.S. Senator from the State of Florida.....     3
Smith, Gordon H., a U.S. Senator from the State of Oregon, 
  prepared statement.............................................   111

                               WITNESSES

Connor, Kenneth L., Esq., Wilkes & McHugh, PA, Washington, D.C...    11
Hirschel, Alison E., President, National Consumer Voice for 
  Quality Long Term Care, Washington, D.C........................     7
Kurth, David W., Burlington, Wisconsin...........................     5
Rice-Schild, Kelley C., Executive Director, Floridean Nursing and 
  Rehabilitation Center, Miami, Florida..........................     9
Ware, Stephen J., Professor of Law, University of Kansas, 
  Lawrence, Kansas...............................................    12

                         QUESTIONS AND ANSWERS

Responses of Kenneth L. Connor to questions submitted by Senators 
  Kohl and Feingold..............................................    26
Responses of Alison Hirschel to questions submitted by Senators 
  Kohl and Feingold..............................................    34
Responses of Kelley C. Rice-Schild to questions submitted by 
  Senators Kohl and Feingold.....................................    37
Responses of Stephen J. Ware to questions submitted by Senators 
  Kohl and Feingold..............................................    39

                       SUBMISSIONS FOR THE RECORD

American Association of Homes and Services for the Aging (AAHSA), 
  Washington, D.C., statement....................................    48
AARP, Washington, D.C., statement and letters....................    50
Alzheimer's Association, Washington, D.C., statement and letter..    66
Bill S. 2838.....................................................    69
Center for Medicare Advocacy, Inc., Toby S. Edelman, Senior 
  Policy Attorney, Washington, D.C., statement...................    76
Connor, Kenneth L., Esq., Wilkes & McHugh, PA, Washington, D.C., 
  statement......................................................    81
Hirschel, Alison E., President, National Consumer Voice for 
  Quality Long Term Care, Washington, D.C., statement and 
  attachment.....................................................    85
Kurth, David W., Burlington, Wisconsin, statement................    92
National Senior Citizens Law Center, Eric M. Carlson, Director, 
  Long-Term Care Project, Los Angeles, California, letter........    99
Public Citizen, David J. Arkush, Director, Washington, D.C., 
  letter.........................................................   100
Rice-Schild, Kelley C., Executive Director, Floridean Nursing and 
  Rehabilitation Center, Miami, Florida, statement...............   103
Tripp, Lisa C., Assistant Professor, John Marshall Law School, 
  Atlanta, Georgia, statement and attachment.....................   114
Ware, Stephen J., Professor of Law, University of Kansas, 
  Lawrence, Kansas, statement....................................   127
Wisconsin Health Care Association (WHCA), Thomas P. Moore, 
  Executive Director, Madison, Wisconsin, statement and 
  attachments....................................................   132


         S. 2838, THE FAIRNESS IN NURSING HOME ARBITRATION ACT

                              ----------                              


                        WEDNESDAY, JUNE 18, 2008

                              United States Senate,
Subcommittee on Antitrust, Competition Policy and Consumer 
                                             Rights, of the
                                Committee on the Judiciary,
                        and the Special Committee on Aging,
                                                   Washington, D.C.
    The Subcommittees met, pursuant to notice, at 10:30 a.m., 
in room SD-226, Dirksen Senate Office Building, Hon. Herb Kohl, 
Chairman of the Subcommittee, presiding.
    Present: Senators Kohl, Feingold, Salazar, Hatch, and 
Martinez.

 OPENING STATEMENT OF HON. HERB KOHL, A U.S. SENATOR FROM THE 
                       STATE OF WISCONSIN

    Chairman Kohl. We will call this hearing to order and 
proceed. Today we are here to examine arbitration agreements in 
nursing home admissions contracts. We are conducting a joint 
hearing with both the Judiciary and the Aging Committees 
because the issue involves access to justice as it relates to 
the 1.5 million Americans currently in long-term care 
facilities and all those who may someday need this kind of 
care.
    Over the past several years, more and more long-term 
facilities have required incoming residents to sign mandatory 
arbitration agreements. By signing these agreements, residents 
give up their right to go to court. It is important to note 
that we believe the vast majority of nursing homes are doing a 
very good job and working hard to deliver quality care. But we 
must protect the rights of those who receive inadequate care to 
hold poor-performing facilities publicly accountable.
    As we will hear today, Mr. Kurth and his family want to 
protect others from the tragedy they have suffered and to send 
a strong message to underperforming facilities that harmful 
care is not acceptable. The experience of placing a family 
member in a long-term care facility is very emotional. Often 
the decision is the last resort after a medical emergency or 
when a family acknowledges that they cannot provide the level 
of care their loved one needs.
    The family's sole focus is on finding the best facility, 
not studying technical legal clauses buried in the document. 
Many incoming residents lack the capacity to make even simple 
decisions, much less judge the legal significance of an 
arbitration agreement. Most are unaware that they are signing 
away their right to go to court. Typically, admissions 
agreements are presented on a take-it-or-leave-it basis. 
Residents have few choices because they require immediate 
admission or because there are no other facilities in the area. 
And as a result, whether or not they understand the arbitration 
provision, they all feel compelled to sign in order to ensure 
that their loved one will be admitted.
    In response to these concerns, Senator Martinez and I have 
introduced a narrowly targeted bill which would invalidate 
mandatory arbitration agreements in long-term care facility 
contracts. It is important to note that our bill does not 
preclude arbitration as an option for resolving disputes.
    As proponents of arbitration emphasize and with whom I 
agree, arbitration can be a timely, efficient, and less 
adversarial option for resolving disputes and going to court. 
However, it is critical that the decision to use arbitration be 
made voluntarily by both parties and only after a dispute 
occurs. It is only fair that families and residents have the 
opportunity to make an informed decision based on the facts of 
their particular case. After the dispute, if both parties feel 
that arbitration will truly offer a fair shake, as its 
proponents argue, then they should be free to agree to it at 
that time.
    [The prepared statement of Senator Kohl appears as a 
submission for the record.]
    We will now turn to the Ranking Member of the Subcommittee, 
Senator Hatch, for any comments he may have.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Thank you, Mr. Chairman. It is always a 
pleasure to be with you, and I appreciate the important work 
that you, Mr. Chairman, and Senator Martinez have dedicated to 
this issue. Your intentions are noble, and I agree that it is 
vital that we ensure that our Nation's seniors receive proper 
medical and nursing home care. Unfortunately, I do not believe 
that S. 2838 meets our common goal of controlling costs which 
is required to sustain an appropriate and professional level of 
nursing home care for our growing senior population.
    Mr. Chairman, as you well know, our Nation faces a crisis. 
Out-of-control health care costs are the single most 
significant fiscal issue facing our Nation. In fact, I consider 
four major issues--Medicaid, Medicare, Social Security, and 
energy--to be the issues of the next 5 to 10 years that are 
going to make or break our Nation, and we have got to solve 
these problems. We have to eliminate waste and needless costs 
whenever possible.
    The numbers confronting us are truly staggering. The 
Department of Health and Human Services' Centers for Medicare 
and Medicaid Services estimate that as a percentage of gross 
domestic product, health care spending will increase from 16.3 
percent in 2007 to 19.5 percent in 2017. In other words, in the 
next 10 years, health care costs will increase faster than our 
Nation's GDP by at least 1.9 percent a year. That means by 2017 
our Nation will spend $4.3 trillion a year on health care. To 
place this sum in the proper context, $4.3 trillion was the 
approximate size of Japan's entire economy in 2007. To me, the 
bottom line is this: If we do not curtail costs, we could very 
well bankrupt our Nation. And given this historic challenge, we 
should take care before advancing any legislation that would 
unduly increase costs and undermine access to affordable care. 
Unfortunately, I believe that will be the unexpected 
consequence of this legislation. But I have got an open mind, 
and I am certainly going to listen.
    Arbitration clauses were not capriciously added to nursing 
home contracts. According to a report by Aon Global Risk 
Consulting titled ``Long Term Care 2008 General Liability and 
Professional Liability,'' nursing home liability costs exploded 
in the late 1990s. In those States that enacted tort reform, 
long-term care liability costs plummeted. Regrettably, most 
States have not enacted these reforms. Yet the report also 
concludes long-term health costs have begun to ``level'' in 
non-reforming States, in part because of arbitration clauses.
    Now, this is a promising development. I believe that S. 
2838 will relinquish these initial gains, and I fear that small 
business owners will be unable to afford or obtain additional 
liability insurance. As a result, many of them will be forced 
out of business.
    I also have trepidation that it will be the less-well-off 
seniors who will be unable to afford the resulting increases in 
nursing care prices, and as a consequence, their care will 
needlessly suffer. Both of these avoidable prospects will be 
caused by the elimination of arbitration clauses, in my 
opinion.
    Let me be clear. I am deeply concerned about nursing home 
abuse. The violation of a patient's trust just cannot be 
tolerated. I have read the Government Accountability Office 
report that you requested, Mr. Chairman, and I was struck by 
its conclusions. This report stated that there are serious 
deficiencies in nursing home care which are not being 
adequately reported to the Federal agencies responsible for 
monitoring Medicare and Medicaid patient care. And while I 
agree that these problems need to be addressed, I believe we 
should also acknowledge the important initiatives launched by 
the nursing home industry. These initiatives have made great 
strides in ensuring that a professional level of care is 
maintained at all nursing homes.
    Now, Mr. Chairman, as I stated at the beginning of my 
remarks, I deeply appreciate the leadership that you and 
Senator Martinez have shown on this issue. However, I must 
admit that I have serious concerns with this legislation due to 
my belief that it will not achieve our common goal of 
controlling costs that will enable us to sustain an appropriate 
level of nursing home care for our growing senior population. 
And these are matters that we just have to work through and 
hopefully resolve, and hopefully I can be of assistance to you 
in getting it resolved in the right way, because I have--I 
think we have the same goals in mind. We have the same hopes 
that we can get this system so it works better than it does 
today.
    I appreciate you doing this, and as usual, it is always a 
pleasure to work with you.
    Chairman Kohl. Thank you very much, Senator Hatch.
    Senator Martinez?

 STATEMENT OF HON. MEL MARTINEZ, A U.S. SENATOR FROM THE STATE 
                           OF FLORIDA

    Senator Martinez. Thank you very much, Mr. Chairman. I am 
delighted to be here with you this morning. I thank you for 
calling this important hearing, and we are here today to 
consider whether nursing homes should be able to require their 
patients to sign away their right to a jury trial as a 
condition of admittance to a facility. And while I believe 
arbitration is a valid way to settle business and financial 
disputes, it should be a completely voluntary process where 
both parties have a reasonable opportunity to understand the 
benefits and the consequences of agreeing to arbitrate future 
disputes.
    As a practicing attorney for many years, I had the 
opportunity on many occasions to participate in arbitration 
proceedings. And like the Chairman, I believe that alternative 
dispute resolution is a very legitimate way to resolve 
disputes, but it particularly should be limited and should 
apply in the intent of what the Arbitration Act was intended to 
do, which is with people in similar positions when they are 
entering into the decision to arbitrate. It is clear to me, 
however, that prospective nursing home residents, one of our 
Nation's most vulnerable populations, should not be forced to 
decide the forum for resolving their potential claims as a 
condition of admittance to a nursing home. Allowing pre-dispute 
arbitration agreements for resolving future nursing home 
disputes forces patients and their families to choose between 
quality care and foregoing their rights within the judicial 
system. That is hardly a free and voluntary choice, and it is 
well beyond the original intent of our arbitration laws.
    The Federal Arbitration Act of 1925 was originally enacted 
to provide parties an alternative forum for voluntarily and 
efficiently resolving potential business disputes. But more and 
more frequently, nursing homes are requiring patients to agree 
to arbitration as the sole vehicle for dispute resolution 
before patients actually take residence in the facility. I 
believe this is an unwarranted expansion of binding 
arbitration, and if after a dispute or claim arises both the 
patient and the nursing home freely were to decide to arbitrate 
their case, then this legislation would allow that as well. So 
that decision to arbitrate is clearly voluntary and may be the 
best way to resolve a particular dispute.
    Some in the arbitration industry themselves feel that 
included in this is the American Arbitration Association, one 
of the country's largest forums, generally refused cases over 
nursing home care where the patient was forced to sign a pre-
dispute arbitration agreement prior to admittance. They 
recognize the vulnerability of nursing home residents and their 
families at the time of admission when they are most 
vulnerable, when they are most distraught, when they are most 
concerned, and that is not a time when we should be asking them 
to make a legal decision that they would knowingly make at that 
time to bind themselves to only arbitration as their sole 
remedy.
    Nursing home disputes often involve allegations of neglect 
and of abuse, and, unfortunately, the prospects of patients and 
their families being able to file a complaint in the civil 
justice system may be the only way of holding nursing homes 
accountable. I believe it is a way of forcing the industry to 
regulate itself because we do know that their care falls in too 
many instances below the level of care that we would all want 
to see in that industry. So the fact of the matter is what we 
are doing here is removing the one incentive that the industry 
has to self-regulate and to police itself and to provide a 
level of care that I believe is what all of us would like to 
see for this very vulnerable group of American citizens.
    What Senator Kohl and I have proposed in our legislation is 
to restore the Federal Arbitration Act to its original intent 
by requiring that agreements to arbitrate nursing home disputes 
be made after the dispute has actually arisen. S. 2838, the 
Fairness in Nursing Home Arbitration Act of 2008, will help to 
ensure that arbitration is a voluntary process for both parties 
involved and not a coerced forum to resolve disputes. Every 
American deserves equal protection under the law and the right 
to seek legal recourse when they are harmed by others, and I 
really do believe that this bill goes a long way in helping to 
maintain that balance between the vulnerable population of 
nursing home patients and the big businesses that run the 
nursing homes.
    Thank you, Mr. Chairman.
    Chairman Kohl. Thank you, Senator Martinez.
    We turn now to our panel of witnesses. Our first witness 
will be David Kurth. Mr. Kurth is from Burlington, Wisconsin, 
and is an engineering project manager at MedPlast in Elkhorn, 
Wisconsin. Mr. Kurth is here to discuss his family's experience 
with nursing home arbitration agreements.
    Our next witness will be Alison Hirschel. Ms. Hirschel is 
the President of the National Consumer Voice for Quality Long-
Term Care, a grass-roots advocacy group. Ms. Hirschel is also 
the elder law attorney at the Michigan Poverty Law Program.
    Next we will be hearing from Kelley Rice-Schild. Ms. Rice-
Schild is the owner and executive director of Floridean Nursing 
Home in Miami, Florida. Floridean is a family-owned long-term 
care facility with 60 residents. Ms. Rice-Schild is here 
representing the American Health Care Association and the 
National Center for Assisted Living.
    Our next witness will be Kenneth Connor. Mr. Connor is an 
attorney at Wilkes & McHugh, a civil litigation law firm where 
he specializes in cases involving nursing home abuse and 
neglect.
    The final witness will be Stephen Ware. Mr. Ware is a 
professor at the University of Kansas Law School where he 
specializes in arbitration.
    We thank you all for appearing at our Subcommittee's 
hearing today, and if you will all now stand and raise your 
right hand and take the oath. Do you affirm that the testimony 
you are about to give before this Committee will be the truth, 
the whole truth, and nothing but the truth, so help you God?
    Mr. Kurth. I do.
    Ms. Hirschel. I do.
    Ms. Rice-Schild. I do.
    Mr. Connor. I do.
    Mr. Ware. I do.
    Chairman Kohl. Thank you so much.
    Mr. Kurth, we will take your testimony.

       STATEMENT OF DAVID W. KURTH, BURLINGTON, WISCONSIN

    Mr. Kurth. Chairman Kohl, Ranking Member Hatch, and 
distinguished members of the Committees, thank you for the 
invitation to speak to you today. I would also like to 
acknowledge my sister, Kim, and my mother, Elaine, who are both 
accompanying me here today.
    I am here to express my family's support of S. 2838, the 
Fairness in Nursing Home Arbitration Act, and I would like to 
thank Senators Martinez and Kohl for introducing this bill.
    My name is David William Kurth, and my father's name was 
William Frederick Kurth. He loved our country and served many 
years as an officer in both the United States Army and the 
Wisconsin National Guard. My father was an Eagle Scout, a Boy 
Scout leader, and served as a volunteer fireman for more than 
25 years in our community.
    My father entered Mount Carmel Nursing Home in October of 
2004. In February, he fell and broke his hip and had to spend 
several days in the Burlington Hospital having his hip 
repaired. Shortly after returning to Mount Carmel Nursing Home, 
his left leg was broken again during physical therapy that was 
improperly applied. My mother said that the therapist insisted 
that my father's leg must be fully straightened. My mother said 
also that my father was screaming in pain and trying his best 
to resist their efforts. Yet they did not listen, and as a 
result, they broke his leg.
    It was at this same time he contracted MRSA infection. Also 
during this time, his health care coverage was changed from 
Medicare to Medicaid. The very day his coverage changed, he was 
moved from his private room in the Medicare wing to a shared 
room in the Medicaid wing of the nursing facility. His new room 
was filthy and smelled of feces. The bed he was placed in was 
coated with dirt. My wife and I had to clean his room and his 
bed. The bathroom he shared with three other men had not been 
properly cleaned in weeks, possibly months.
    On one occasion, I found the room to reek of feces. There 
was a rag with feces next to my father's face on his feeding 
table. His clean clothes were on the floor intermingled with 
several changes of soiled sheets. Even though my father had 
contracted the MRSA infection, the staff made no attempt to 
protect his roommates, his visitors, or even their own staff 
from contracting this very communicable disease.
    In April, Dr. Ryan found two or three small bedsores on my 
father's backside and instructed the wound care nursing team to 
give special attention to these wounds. What we did not know 
was that around this same time the management of the facility 
had made a cost-cutting move and disbanded the wound care team. 
What this meant was that the wound care for over 150 patients 
that had previously been done by a team of people was now to be 
attended by only one nurse. Records show that this sole wound 
care nurse never attended to my father's wounds during the 
months of April or May, even after it was brought to her 
attention by the visiting doctor.
    After examining my father again prior to Memorial Day, the 
doctor immediately rushed my father to the emergency room. The 
doctor told us how shocked he was at the poor care my father 
had received. He had also told us that my father was terminally 
ill and that he did not have much chance of surviving his 
infections. My father died on June 25, 2005, from sepsis of the 
blood due to infections caused by approximately 13 bedsores. 
Most of these bedsores ran deep into the bones of his hips and 
pelvis. The infections were caused by the excrement and urine 
that was not properly cleansed from the wounds for days at a 
time. The bedsores were caused by neglect.
    The wound care nurse that was responsible for caring for my 
father has been charged and found guilty of criminal neglect by 
the State of Wisconsin for her actions.
    On the day of my father's memorial service, a Kindred 
representative contacted me to express her concerns for the way 
my father suffered and said they felt responsible and wanted to 
pay for my father's funeral expenses. I declined her offer.
    To make matters worse, the parent corporation of the 
nursing home is hiding behind a mandatory arbitration clause to 
prevent the light of truth from being shed on their corrupt 
management policies.
    How can anyone in good conscience argue that it should be 
perfectly legal to trick frail, elderly, infirm senior citizens 
during the most stressful time in their lives into waiving 
their legal rights?
    My sister and I and my mother are here today to plead with 
you to help right a great wrong that is being perpetrated on 
the elderly of America. It is by God Almighty's hand that you 
have come to your position this day for such a time as this. 
Please do not let my father's story be allowed to happen to 
another innocent American.
    Thank you for your time.
    [The prepared statement of Mr. Kurth appears as a 
submission for the record.]
    Chairman Kohl. Thank you very much, Mr. Kurth.
    Ms. Alison Hirschel.

 STATEMENT OF ALISON E. HIRSCHEL, PRESIDENT, NATIONAL CONSUMER 
    VOICE FOR QUALITY LONG TERM CARE, EAST LANSING, MICHIGAN

    Ms. Hirschel. Good morning, Chairman Kohl, Ranking Member 
Hatch, and Senators Martinez and Feingold. Thank you very much 
for inviting me to speak on behalf of NCCNHR, the National 
Consumer Voice for Quality Long Term Care, and thank you, 
Senators Kohl and Martinez, for introducing this important 
legislation. I am delighted to note that Lynn Miller, a nursing 
home resident who is on the NCCNHR Board, is with us today here 
in the front row.
    For the past 23 years, I have advised long-term care 
consumers about their rights and options, and I know that 
residents and families often sign admissions agreements at a 
time of great stress in their lives, and they do when decisions 
need to be made in a hurry. Most consumers do not notice that 
there is a mandatory arbitration provision in the contract they 
are signing, and if they do, they might not understand them. 
They probably do not know that under these provisions, the 
facility chooses the arbitrator. They do not understand that 
arbitration can be very costly for consumers, that arbitration 
awards are generally significantly lower than jury awards, and 
that there is no appeal. And the last thing on most consumers' 
minds is how they will seek a remedy if something goes wrong. 
They enter a long-term care facility seeking care and 
compassion, not litigation or arbitration.
    Even if consumers understand the arbitration clause, they 
will not challenge it. First, this is not a negotiation between 
two equal parties. Consumers sign whatever they need to sign to 
get their family member into a facility. Second, nobody wants 
to be considered a troublemaker before they have even entered 
the facility, and to put the life of a vulnerable resident in 
the hands of someone who might already be annoyed at them. And 
they especially do not want to be a troublemaker about a clause 
in the contract that they do not think will ever affect them.
    But, of course, sometimes things do go grievously wrong. 
For example, Vunies B. High was a 92-year-old Detroit area 
resident with dementia. She happened to be the sister of the 
legendary boxer Joe Louis. She was a graduate of Howard 
University and a very accomplished woman and a long-time 
teacher. Ms. High's family placed her in an assisted living 
facility because they thought that she would be safe there. On 
a frigid night this past February. the staff failed to notice 
when Ms. High wandered out of the facility wearing only her 
pajamas. She froze to death right outside her door. Her family 
then discovered that the admissions agreement they signed 
contained a mandatory, binding arbitration provision that 
stated that the provider had the sole and unfettered option to 
choose to resolve the dispute in arbitration; the provider 
would choose the location, and presumably the arbitrator; the 
provider would choose the rules; and the provider retained its 
right to go to court if it had any dispute against Ms. High, 
though Ms. High was required to give up her right to go to 
court if she had a dispute against them.
    Because of this agreement, Ms. High's family may not have 
an opportunity to seek redress in the courts for her tragic and 
preventable death. This is troubling because the potential for 
litigation provides an important incentive for facilities to 
provide better care. It is a way for individuals who really 
have been wronged in sometimes harrowing ways to hold providers 
accountable. And it is a method for ensuring, in contrast to 
arbitration, that these abuses are brought to light.
    At the same time we are seeing more mandatory arbitration 
clauses, Government studies continue to provide disturbing 
evidence that our enforcement system is not working well. As 
Senator Grassley remarked in 2007, ``The enforcement system is 
broken.'' In my own State, complaints take an average of 90 
days to investigate, and sometimes as long as a year. In that 
time, all evidence disappears, and it is impossible to 
substantiate even the most serious and legitimate complaints. 
And if you cannot substantiate them, you cannot impose a 
penalty.
    Licensed assisted living facilities in my State are 
inspected less often, less rigorously, and inspectors have even 
fewer tools if problems are discovered. And there is no 
enforcement at all in unlicensed facilities like the one in 
which Ms. High's family unwittingly placed her. So enforcement 
cannot be an adequate substitute for litigation in really 
egregious cases.
    I know that opponents of this bill lament that funds that 
should be spent on resident care are diverted to pay for 
litigation and liability insurance. But I want to be clear 
about three important points:
    First, what really costs taxpayers unfathomable amounts of 
money is poor care itself. For example, when a Wisconsin 
nursing home ignored for more than 5 days Glen Macaux's 
doctor's orders to inspect his surgical site, the resulting 
infection caused septic shock, excruciating pain, severe 
depression, and total disability, and hospital bills of almost 
$200,000. And this is replicated over and over across the 
country.
    Second, even if providers were spared the expense of 
litigation and high insurance premiums, there is no guarantee 
that they would put that money into improving residents' lives.
    And, finally, I want to note that anti-arbitration. We are 
only opposed to pre-dispute, binding, mandatory arbitration. 
Arbitration was not intended as an end run around justice or a 
way to keep wrongdoing out of the public eye. In cases in which 
consumers have already suffered grievous harm, Congress should 
not permit long-term care facilities to add the bitter burden 
of denying individuals their fundamental right of access to the 
courts.
    Thank you.
    [The prepared statement of Ms. Hirschel appears as a 
submission for the record.]
    Chairman Kohl. Thank you, Ms. Hirschel.
    Ms. Rice-Schild.

    STATEMENT OF KELLEY C. RICE-SCHILD, EXECUTIVE DIRECTOR, 
  FLORIDEAN NURSING AND REHABILITATION CENTER, MIAMI, FLORIDA

    Ms. Rice-Schild. Thank you, Chairman Kohl, Ranking Member 
Hatch, and members of the Committee. I am grateful to have the 
opportunity to be with you here today and to offer the long-
term care profession's perspective on arbitration. My name is 
Kelley Rice-Schild, and I am here today on behalf of American 
Health Care Association and the National Center for Assisted 
Living.
    In addition to representing the long-term care industry, I 
am also here as an owner, operator, small businesswoman, and 
nursing home administrator. The Floridean in Miami was founded 
by my great-grandmother, Florence Dean, in 1944 and is a high-
quality nursing facility that has been operated by a member of 
my family ever since. The Floridean is the oldest nursing home 
in Miami and serves as many as 60 South Floridians every day. 
Our mission is to meet and exceed the expectations of our 
patients and their families by providing the highest-quality 
care possible.
    Before I address the benefits of arbitration as an 
alternative to litigation, allow me to take a moment to assure 
the Committee that the troubling anecdotes presented today 
represent the exception rather than the rule within our long-
term care community.
    I am proud of the advances our profession has made in 
delivering high-quality care, and we remain committed to 
sustaining these gains in the future when demand for care will 
dramatically increase.
    Data tracked by CMS clearly illustrates improvements in 
patient outcomes, increases in overall direct care staffing 
levels, and significant decreases in quality of care survey 
deficiencies in our Nation's skilled nursing facilities. We 
remain committed to building upon these quality improvements 
for the future.
    In the late 1990s, our profession was subject to an 
increasingly difficult legal environment. Long-term care 
operators were forced into making difficult decisions, 
including potential closure of facilities and corporate 
restructuring. In addition to pursuing tort reform, we sought 
alternatives to traditional litigation, including arbitration. 
This trend was especially true in States such as Texas, 
Arkansas, and my home State of Florida, where State laws 
fostered an exponential growth in the number of claims filed 
against long-term care providers, even those like mine with a 
history of providing the highest-quality care.
    This led to an explosion in the cost of maintaining 
insurance to protect operators from the risks associated with a 
tort environment that often encouraged unsubstantiated claims, 
featuring highway billboards and other advertising encouraging 
consumers to sue their long-term care provider.
    In 2001, tort reform legislation passed in Florida. 
Unfortunately, insurance is still not widely available and is 
unaffordable for most operators. Today in my facility, I am 
covered by a $25,000 general and professional liability policy 
for which I pay $37,000 a year. To carry more insurance would 
simply make my facility a target for litigation, despite our 
over 60-year history of providing nothing but the highest level 
quality of care.
    In order to serve the good steward of my family's long-time 
business and to continue to operate in such an environment, I 
turned to arbitration. I was not alone. In 2002, American 
Health Care developed a model arbitration agreement form for 
possible use in admission process as a service to our member 
facilities and the residents they serve. This model agreement 
in no way alters the rights of remedies available to the 
resident under State tort law. It states that entering into an 
arbitration agreement is not a condition of admission to the 
facility. It is clearly free and voluntary. The form also 
provides a 30-day window for the resident or their 
representative to reconsider and rescind the arbitration 
agreement.
    We support the use of arbitration because, unlike 
traditional litigation, our experience is arbitration is more 
efficient, less adversarial, and has a reduced time to 
settlement. A recent Aon report found arbitration reduces the 
time to settlement by more than 2 months, on average, and that 
very few claims actually go all the way to arbitration, as most 
claims are settled in advance.
    The Aon report also finds that 55 percent of the total 
amount of claims costs paid by the long-term profession is 
going to directly to attorneys. It is unfortunate to 
sensationalize this debate with anecdotes and misinformation 
perpetuated by high-profile trial attorneys who are the primary 
beneficiaries of eliminating arbitration and long-term care. In 
fact, Mr. Connor's testimony last week before the House 
Judiciary Subcommittee inaccurately portrayed the manner in 
which arbitration agreements are presented to residents and 
their families upon admission.
    We believe that legislative proposals to limit arbitration 
and undermine the FAA is bad public policy. We strongly support 
the use of arbitration as a reasonable option to resolve legal 
disputes and aggressively oppose efforts to diminish the use of 
arbitration.
    Thank you for this opportunity to offer comments today. I 
look forward to your questions.
    [The prepared statement of Ms. Rice-Schild appears as a 
submission for the record.]
    Chairman Kohl. Thank you, Ms. Rice-Schild.
    Mr. Connor?

  STATEMENT OF KENNETH L. CONNOR, ESQ., WILKES & MCHUGH, PA, 
                        WASHINGTON, D.C.

    Mr. Connor. Thank you, Senator Kohl, Ranking Member Hatch, 
Senator Martinez. I would like to thank you, Senator Kohl, and 
you, Senator Martinez, for your sponsorship of this very 
important legislation.
    Senator Hatch has rightly outlined, I think, some of the 
major crises that are facing our country. I would submit to you 
that we also have an unacknowledged crisis of care with respect 
to our elderly and long-term care facilities in this country. I 
know because I have seen it firsthand. I have tried cases 
involving abuse and neglect of nursing home residents from 
Florida to California. I have seen nursing home residents who 
had pressure ulcers as big as pie plates. Their wounds 
oftentimes were so putrid and foul-smelling that you could 
smell the resident walking down the hall before you ever 
entered their room and saw them. I have seen them with gaunt 
faces and hollow eyes, suffering from avoidable malnutrition, 
their tongues too parched and swollen to speak because they are 
suffering from preventable dehydration. Sometimes they are 
victims of sexual abuse by their caregivers or physical abuse 
by other demented patients who are not properly supervised. And 
most of the times, these problems are rooted in the failure of 
nursing homes to maintain sufficient staff to take care of 
their residents. And the reason that is the case is that labor 
costs are the biggest single item in a nursing home budget. And 
when you are dealing with a capitated system where they are 
paid a flat fee for the care of residents, the way you increase 
profits is by reducing costs. And so they short the staff, and 
then in our experience often falsify the records to reflect a 
false and inaccurate picture of the care that is being given in 
the nursing home.
    Now, historically, the means of redress for these kinds of 
injuries has been to resort to the courts--that is, the right 
to a jury trial that was so cherished by our forefathers that 
many refused to sign the Constitution until they agreed to 
secure it in the Seventh Amendment.
    I can tell you as a practical matter, these problems are 
only going to get worse with time. We have got an enormous age 
wave coming. We have a veritable senior tsunami on the horizon. 
Dr. Leon Kass has rightly said that we are rapidly becoming a 
mass geriatric society, even as we are facing the pressures 
that you, Senator Hatch, have identified in terms of the crisis 
in our Medicare and Medicaid systems. And at the same time, we 
are experiencing a shift in the cultural consensus about the 
way we view the elderly and handicapped especially. We are 
moving away from a sanctity-of-life ethic to a quality-of-life 
ethic, and old people suffering from dementia in the nursing 
home do not score well using quality-of-life calculus. They do 
not perform well on functional capacity studies, and they cost 
more to maintain than they produce, and they are often the 
victims of abuse and neglect in nursing homes.
    And I respectfully dispute what Ms. Rice-Schild has said. 
All you have to do is look at the briefs and memos that our 
office has filed on multiple occasions in court, along with 
that of others.
    You know, in any other setting if you took advantage of an 
elderly person whose eyes were dim and whose hearing was dull 
and who lacked mental capacity or perhaps is on medication that 
impaired their mental faculties, and you talk them into 
forfeiting important legal rights or forfeiting the important 
right to recover money for their damages, in almost any other 
setting, the perpetrators of that kind of conduct would be 
prosecuted. Yet it is an approved process in nursing homes. 
Nursing homes take advantage of frail, vulnerable residents who 
are mortified and terrified that they are about to be left by 
their families in an institution. The families themselves are 
stricken with grief and guilt over the fact that they cannot 
care for their loved one anymore and they have to turn them 
over.
    The last thing on their mind when they come to the nursing 
home is that they are going to be required to forfeit their 
legal rights. All they are concerned about is getting care for 
their mother or grandmother whom they know they cannot care for 
any longer.
    These agreements are often sandwiched at the end of a 50- 
or 60-page admitting packet. They are rarely ever explained. 
Oftentimes we find that people who explain them do not even 
know or understand the consequences.
    If arbitration is such a good remedy--and I would submit to 
you that arbitration can be an appropriate means of alternative 
dispute resolution, then let's foster it after the dispute 
arises, not before the dispute arises, when the victims of 
abuse and neglect and their families do not have a clue about 
what they are suffering. If your goal is to hold wrongdoers 
fully accountable for the consequences of their wrongdoing and 
to see to it that innocent victims of wrongdoing are 
compensated fairly for what they have suffered, I would suggest 
to you you ought to support this important legislation.
    Thank you.
    [The prepared statement of Mr. Connor appears as a 
submission for the record.]
    Chairman Kohl. Thank you, Mr. Connor.
    Mr. Ware.

 STATEMENT OF STEPHEN J. WARE, PROFESSOR OF LAW, UNIVERSITY OF 
                    KANSAS, LAWRENCE, KANSAS

    Mr. Ware. Chairman Kohl, Ranking Member Hatch, Senator 
Martinez, members of the Committees. Thank you for having me 
here today. My name is Stephen Ware. I am a professor of law at 
the University of Kansas. I speak to you today not on behalf of 
my university, but as an individual scholar who specializes in 
arbitration law. I have written two books on the subject and 20 
arbitration articles in scholarly journals. Within my field of 
arbitration law, I have focused on the arbitration of disputes 
involving ordinary individuals, and it is safe to say that for 
the last 15 years, the bulk of my professional life has been 
devoted to studying the law, economics, and policy of such 
arbitrations. It is based on this experience that I oppose S. 
2838 because I believe it will tend to harm those it aims to 
protect, that is, nursing home residents and their families.
    I have three points I want to make about arbitration. The 
first point, which Senator Kohl alluded to, is that to the 
extent we have reliable empirical evidence comparing 
arbitration and litigation, arbitration does tend to be a 
quicker, cheaper method of dispute resolution. So the savings 
that Senator Hatch alluded to are backed up by empirical data.
    That leads me to my second point, which is that advocates 
of this bill often praise arbitration and allude to those 
benefits of arbitration and say that while we are going to keep 
arbitration, we like arbitration, all this bill will do is ban 
pre-dispute arbitration agreements. That, however, sets up a 
false choice. If you ban pre-dispute arbitration agreements, 
you effectively end virtually all arbitration of this sort of 
dispute, and that is because parties rarely enter into post-
dispute arbitration agreements. The vast majority of 
arbitration arises out of pre-dispute arbitration agreements.
    The fact that parties rarely enter into post-dispute 
arbitration agreements does not reflect badly on arbitration. 
What it reflects is the perspective the disputing parties have 
after a dispute arises. At that time, parties and their lawyers 
can assess a case, and they try to maneuver into a forum that 
advances the self-interest of that side of the case. In other 
words, one party may be attracted to litigation precisely 
because it is not as fast or as cheap as arbitration. That can 
give a strategic advantage to that side. So we rarely see post-
dispute arbitration agreements. Enacting a bill like this, I 
expect, will virtually eliminate arbitration of these sorts of 
disputes.
    That then brings me to my third point, which is the 
fairness of arbitration. I think it is important to avoid 
generalizing here because there are a wide variety of 
arbitration agreements out there and a wide variety of things 
happening in arbitration. And here is where I really believe we 
have a sensible system under the Federal Arbitration Act as it 
stands now, with courts refusing to enforce arbitration 
agreements that are unfair, that would lead to an unfair 
arbitration process. So as Senator Martinez says, we all want 
to hold nursing homes accountable for their negligence. 
Certainly the sort of atrocious care Mr. Kurth described, we 
all want to hold nursing homes accountable for that sort of 
care. The question is: Will arbitration do that? And sometimes 
the answer is yes, sometimes the answer is no. It depends on 
the particular arbitration agreement, the particular 
arbitrators involved.
    So what we have now is a very sensible system in the law 
where courts decide on a case-by-case basis which arbitration 
agreements to enforce and which ones are unfair and should not 
be enforced. I think that is a better system, case-by-case 
adjudication of these fact-intensive issues, than legislation 
which would pain with a broad brush and would be overinclusive.
    Thank you very much.
    [The prepared statement of Mr. Ware appears as a submission 
for the record.]
    Chairman Kohl. Thank you, Mr. Ware.
    A question for you, Mr. Connor. Ms. Rice-Schild says that 
Mr. Kurth's case, as we heard about it today, is ``the 
exception and not the rule.'' I would ask you how prevalent are 
arbitration agreements in admissions contracts and how common 
are stories like Mr. Kurth's that we heard today.
    Mr. Connor. Mr. Kurth's story is all too common. There are 
many nursing homes in this country that give high-quality care, 
but Mr. Kurth's story and the story that was outlined by Ms. 
Hirschel are very, very common. I have reviewed hundreds and 
hundreds of charts from nursing homes all over the country and 
see these systemic problems. These are not isolated problems. 
They are systemic. And we also see systemic fraud in the 
industry. In fact, in 2000, the DOJ commented at one of these 
hearings that fraud had been built into the business model of 
the nursing home industry. And I can tell you that in the 
ensuing time since that statement was made, it has been 
validated time and time again in the cases that I have been 
involved in where nursing homes try to conceal the true 
staffing picture and the true nature of the care that is being 
given.
    We encounter these nursing home pre-dispute arbitration 
agreements, I would estimate, in 60 to 70 percent of our cases, 
and that percentage is rising over time, because it is a 
tremendous advantage to the nursing home to enter into these 
agreements. These proceedings are often secret. They are not 
exposed to public opprobrium like they would be in a public 
trial or in the case of a public jury verdict. They often are 
able to shift the costs of arbitrating to the plaintiffs in 
this case. It often is cheaper for the defendant nursing homes. 
But at bottom, I would suggest to you, the inherent unfairness 
that arises from taking advantage of a frail, elderly person to 
get them to forfeit important legal rights before a dispute 
arises is just simply unconscionable and ought not to be 
sanctioned by this Congress.
    Chairman Kohl. Thank you.
    Ms. Hirschel, long-term care facilities claim that without 
arbitration, their costs would increase and access to quality 
care will decrease. I am concerned about our seniors having 
access to quality long-term care, as we all are. Will this 
bill, as they say, result in fewer facilities to care for our 
aging population?
    Ms. Hirschel. Senator Kohl, I do not think so, and I would 
like to caution us not to equate the legitimate issue that 
Senator Hatch raised of rising health care costs across the 
board with the specific issue of consumers' rights to go to 
court in truly egregious cases. There are lots of other ways 
that facilities can control costs and keep their doors open and 
provide access.
    The first thing is they can provide good care. There is no 
evidence of a spate of frivolous lawsuits. In fact, the Harvard 
study in 2003 showed that in more than half the cases that were 
filed against nursing homes, the resident died. So these are 
not--even defense lawyers for the industry have acknowledged 
that these cases are not frivolous. If you provide good care, 
you do not get sued for those very expensive, egregious cases.
    The second thing I think would be very interesting is to 
look at how the insurance industry sets its rates for nursing 
home liability insurance. The Center for Medicare Advocacy did 
a study that showed that those rates increase exponentially and 
not directly related to civil litigation costs, but to a host 
of other factors. And I think we really need to see whether 
those rates are truly based on rising litigation or on other 
factors that are not legitimate, and whether the insurance 
companies, in fact, are bleeding profits out of nursing homes 
that should be spent on care.
    And, finally, I think we need to look at the private equity 
firms, which I know that you and Senator Grassley have looked 
at very carefully. They are bleeding resources out of 
facilities and putting profits over residents. If we ensured 
that the funds that should be spent on resident care stayed in 
the facility instead of in the private equity investors' 
pockets, that would also allow facilities to continue providing 
quality care and keeping their doors open.
    So, in sum, I would just say that nursing homes can keep 
their doors open if they provide good care, if they have 
responsible corporate policies, and if we ensure that liability 
insurance rates are fair and reasonable. Thank you.
    Chairman Kohl. Thank you.
    Senator Martinez?
    Senator Martinez. Thank you, Mr. Chairman.
    I want to thank all the witnesses for very compelling 
testimony. The fact is that these are difficult issues. We are 
talking about issues that are really at the heart of a cycle of 
life where we need to show the kind of care and concern that I 
know all of you passionately care about.
    Ms. Rice-Schild, I also want you to know that I am certain 
your establishment gives quality care. I am sure there are 
places where quality care happens. I also have faith in the 
judicial system to ferret out the frivolous from the 
legitimate. And I think at the end of the day, while a lawsuit 
might be filed, before a lawsuit ultimately comes to being a 
collectible verdict, that there needs to be a process in place 
that is fair to all concerned.
    I was intrigued by something you said, and I want to 
clarify it. You mentioned that in Florida we had tort reform, 
and I believe you said in 2001, I believe. But yet your 
insurance rates did not drop significantly. Is that right?
    Ms. Rice-Schild. No, Senator. The insurance companies, the 
major carriers, are not writing medical malpractice insurance 
in Florida.
    Senator Martinez. But that was in spite of tort reform, so 
tort reform really did not alter the insurance situation.
    Ms. Rice-Schild. I think there needs to be a track record 
before the insurance companies will come back to the State, and 
slowly but surely we are all hoping that will happen and it 
will be affordable.
    Senator Martinez. But at this current time, you do not find 
that there is affordable insurance in Florida?
    Ms. Rice-Schild. No, Senator. It is almost dollar for 
dollar. The last time that I was able to get real medical 
malpractice insurance was 1999. I had $1 million/$3 million 
coverage, and I paid $24,000. I have an almost pristine record. 
Then after the bottom dropped out, I was reduced to having to 
get a $25,000. Now if I wanted to get $1 million/$3 million--I 
spoke to an insurance agent just recently on my renewal--it 
would be close to $800,000.
    Senator Martinez. So essentially tort reform did not alter 
the equation in terms of--
    Ms. Rice-Schild. Not yet, Senator. We are hoping that it 
will.
    Senator Martinez. Okay. And it is almost a decade, so I am 
wondering what it really is the solution that it is held out to 
be. I am sure when you were advocating for tort reform in 
Florida, you were assured that this would drop your rates, and 
you were probably telling legislators at the time that that 
would happen. And, unfortunately, it happens, and that is my 
point.
    Ms. Hirschel, in the limited time I have, let me move 
along. Folks who come into a situation and they are presented 
an arbitration agreement, do they get a discount? Do they pay 
less in any way?
    Ms. Hirschel. No, sir, they do not.
    Senator Martinez. And is it your experience--
    Ms. Hirschel. Not in my experience. I am sorry to 
interrupt, but certainly not in my experience. I have not heard 
that.
    Senator Martinez. And do you believe that people are in 
anyway informed at the time of signing of that contract as to 
what they are doing in terms of giving up their legal rights? 
Mr. Connor mentioned that sometimes these might be sandwiched 
in the back of a package. I took my dad to a nursing home and 
grabbed him out of there in about a week because I was appalled 
myself. That is just my own little experience. But, anyway, I 
remember signing a lot of stuff. And, frankly, as I have sat 
here, I wondered if I signed an arbitration agreement as part 
of that. I do not know.
    Ms. Hirschel. Well, my sense is that different facilities 
have very different practices. Some do explain the process, and 
I know that some defense attorneys for nursing homes suggest 
that their facilities have a video that explains the entire 
process, although the defense lawyer whose paper I read said 
that none of his clients have chosen to do that.
    So some do and some do not. I have certainly seen the 
admissions contracts where those arbitration clauses are 
absolutely buried and use very difficult legal language. But as 
I said in my testimony, even in the cases where clients, where 
applicants understand that there is an arbitration agreement, 
they are afraid to ask to have that removed. They just want to 
get their family member in, and they do not think it is going 
to apply to them.
    Senator Martinez. Mr. Ware, I was intrigued by your faith 
in a two-proceeding system. I understand that alternative 
dispute resolution is a very progressive way of resolving legal 
disputes, and I have participated in them on many occasions in 
different settings. And I think that they are appropriate. 
However, when you recommend that essentially there be an 
arbitration process and then it be taken before a court so that 
on a case-by-case basis a court can then decide if it was 
fairly entered into? I am not sure I understand that.
    Mr. Ware. No, Senator. I recommend the law as it is right 
now, the current law, which is when people agree to arbitrate, 
if they choose to arbitrate, they just go ahead and arbitrate. 
If one of the parties wants to get out of the arbitration 
agreement, they can go to court and a court assesses whether 
the agreement should be enforced or not.
    Senator Martinez. But then that forces them into 
litigation.
    Mr. Ware. Certainly, right. The choice to try to back out 
of one's arbitration agreement gives you the alternative of a 
court to back you up on that and let you out of the arbitration 
agreement.
    Senator Martinez. But do you find that when people enter 
into these arbitration agreements, particularly in nursing home 
settings, that they are aware of the legal rights that they are 
giving up and that they in any way have any sort of an equal 
bargaining position? I mentioned in my opening statement about 
my belief that arbitration really has its fruits in resolving 
business disputes where there is some sort of an equilibrium, 
if you will, in the bargaining position of the respective 
parties.
    Do you think that exists in this situation? And does that 
concern you?
    Mr. Ware. Well, that is, again, where I would hesitate to 
generalize. I mean, part of my job as a law professor is to 
imagine extreme cases on either side. So I can imagine extreme 
cases where people would say, yes, this arbitration agreement 
was fairly, voluntarily entered into, and ought to be enforced, 
just like I can imagine extreme cases on the other side. And 
then there is a lot of gray area in the middle where reasonable 
people can disagree. And that, again, is why I believe we have 
got such fact-intensive, case-by-case, issues arising here, so 
rather than the broad brush of litigation, this is better 
resolved case by case by courts looking at individual facts.
    Senator Martinez. Thank you, Mr. Chairman. My time is up.
    Chairman Kohl. Thank you, Senator Martinez.
    Senator Feingold?

STATEMENT OF RUSSELL D. FEINGOLD, A U.S. SENATOR FROM THE STATE 
                          OF WISCONSIN

    Senator Feingold. Well, thank you, Mr. Chairman, for 
holding this hearing and for your leadership on this issue.
    I want to first welcome Mr. Kurth from Burlington, 
Wisconsin, and his family members, and express my deepest 
sympathy for the loss of your father and the ordeal you and 
your family have undergone. That was very powerful and, 
frankly, very disturbing testimony. Thanks for coming here to 
tell your story and to try to help other families.
    One of the most fundamental principles of our justice 
system is the right to take a dispute to court. I have been 
concerned for many years that mandatory arbitration clauses in 
all sorts of contracts that consumers and employees must sign 
are slowly eroding the legal protections that should be 
available to all Americans. I have introduced legislation to 
make these provisions unenforceable basically in all contexts 
because I believe they are inherently unfair, other than some 
of the commercial situations that Senator Martinez was just 
referring to.
    Arbitration is an important form of alternative dispute 
resolution, but it should never be forced on someone, 
particularly not on someone with unequal bargaining power 
before a dispute even arises. People who sign contracts to go 
into a long-term care facility are among the most vulnerable of 
our citizens, whether they are seniors or their families. They 
sign papers that are handed to them in often very difficult and 
emotional circumstances. They are not represented by lawyers to 
review the fine print. As we have heard from the witnesses 
today, residents and their families typically have no 
opportunity to negotiate the terms of the contracts they sign. 
Often they believe or they are told the contracts are take-it-
or-leave-it propositions. In some cases, the facility, but not 
the resident, retains the right to modify the contract and even 
to pursue a collection action in court. If the dispute goes to 
arbitration, the secret proceedings often severely restrict 
discovery and impose limits on witnesses, experts, and 
information sharing.
    So I am pleased to cosponsor the Nursing Home Contract 
Arbitration Fairness Act introduced by Senator Martinez and my 
senior colleague from Wisconsin Senator Kohl. The bill will 
restore access to the courts for nursing home residents who 
have suffered abuse and neglect. That access in the end helps 
improve the quality of care for our seniors. Mr. Chairman, the 
rule of law means little if the only forum available to those 
who believe that they have been wronged is an alternative 
unaccountable system that they have not chosen voluntarily when 
the laws do not necessarily apply. This legislation protects 
seniors from exploitation while still allowing alternative 
methods of dispute resolution to be chosen by the parties. I 
applaud you, Senator Kohl and Senator Martinez, for introducing 
the bill, and I hope this hearing will move us closer to 
enacting it.
    [The prepared statement of Senator Feingold appears as a 
submission for the record.]
    Mr. Kurth, thank you again for coming and testifying. One 
thing you talk about in your testimony is how the secrecy of 
arbitration is used as a shield for corporations to hide 
behind. Is one of the reasons that you wanted to have a real 
trial in court that you wanted to help educate the public and 
talk about what your family has been through in an open 
proceeding?
    Mr. Kurth. Yes, sir. We live in a small community, and what 
we saw was that even though this happened, this terrible thing 
happened, nobody knew about it unless they knew our family. Yet 
other members of the community were continuing to enter the 
facility; they had no idea what they were getting into or what 
they were being asked.
    When I was there, in one of the other rooms was somebody 
that taught us biology in high school. This is all about public 
safety and public awareness and fairness as well. We just want 
to make sure that this does not happen to other people from our 
community.
    Senator Feingold. Thank you.
    Mr. Connor, in Ms. Rice-Schild's testimony she claims that 
you misrepresented how arbitration agreements are presented to 
potential residents. She also claims that potential residents 
at her facility are not required to sign the arbitration 
agreement and that several have chosen not to do so.
    In your 25 years representing residents and nursing homes, 
have you found that residents are generally told that they do 
not have to sign the arbitration clause?
    Mr. Connor. No, that would be in my experience the 
exception rather than the rule, and, in fact, as Ms. Hirschel 
has pointed out, oftentimes residents and their families are 
reluctant at the very outset to buck the system and to buck the 
proposals. They do not want to be deemed to be problem 
oriented. But in any number of instances, residents have been 
told that if they do not sign the agreement, then they will not 
be permitted to gain admission to the facility. And this is 
simply not acceptable in many instances because it may be many 
miles to the next nearest facility, and they will not have an 
opportunity to visit their loved ones as they otherwise would.
    These agreements are often sugar-coated in very soothing 
tones and vague terms. They are told if there is a dispute, we 
will be able to quickly resolve it at minimal expense.
    Well, the extent of the rights that one is giving up are 
dramatic, and the minimization and expense is to the nursing 
home. It is not to the resident. Oftentimes, the filing fees 
alone in arbitration cases run into the thousands and thousands 
of dollars. That is not true with filing fees for a court, 
plain and simple.
    Senator Feingold. Ms. Hirschel, just following up on 
something Senator Martinez was talking about, Mr. Ware argues 
that the bill we are discussing today is unnecessary because 
courts can still find an arbitration agreement unconscionable 
if it is blatantly unfair to one of the parties. Now, that, of 
course, requires a lawsuit to be filed, which I thought 
arbitration was supposed to avoid. But leaving that aside, do 
you think that the fact that courts can theoretically find an 
agreement unconscionable is enough protection for vulnerable 
citizens in this situation?
    Ms. Hirschel. Well, first, Senator Feingold, I think that 
in my understanding of these arbitration agreements, they are 
unfair because the nursing home picks the arbitrator and 
because the arbitrator is often a health care industry lawyer 
who has an interest in finding for the facility and having low 
awards so that they will get repeat business from that long-
term care facility. The facility picks the location. There are 
costs, as Mr. Connor was just referring to, that do not occur 
in litigation. So I think that these agreements just are 
unfair, especially when you think about the very vulnerable 
people who are asked to sign them.
    Second, as you suggested, I think it is really very 
cumbersome, very costly, and perhaps unrealistic to suggest 
that every time a family finds themselves in a situation like 
the Kurths or in the situation of Joe Louis' sister that they 
would first go through a court proceeding and then, if they 
lose, have to go through arbitration as well.
    Senator Feingold. Mr. Connor, do you want to comment on 
that?
    Mr. Connor. Yes, Senator Feingold. I should point out that 
increasingly we are seeing provisions in the arbitration 
agreement that indicate that if there is a dispute about the 
appropriateness or propriety of the arbitration, that will be 
resolved by the arbitrator as well. There just--I think it is 
just important to understand the reality of the situation. 
These are agreements that are tilted against the resident and 
in favor of the nursing home. The business is provided to the 
arbitrators that are involved. They typically are health care 
lawyers who have a very cozy and close relationship with the 
defendant nursing homes.
    Now, if you had a judge who was hawking his venue as a 
business-friendly environment and whose fees and salary were 
being paid by the defendants in that case, you would say he has 
a conflict of interest or she has a conflict of interest, and 
they are not qualified to serve. This is an unlevel playing 
field that results in the abuse of nursing home victims who 
already have been abused and neglected by their caregivers.
    Senator Feingold. Thank you, Mr. Connor.
    Thank you, Mr. Chairman.
    Chairman Kohl. Thank you, Senator Feingold.
    Senator Salazar?
    Senator Salazar. Thank you very much, Chairman Kohl, for 
holding this hearing on this very important issue, and to you, 
Mr. Kurth, I give you my condolences for the loss of your 
family member.
    I have a general question, and that is--and maybe you can 
answer this. My sense is that when people go into a nursing 
home, they sign a whole set of documents, kind of like a house 
closing where you have a number of maybe 10, 15, 30 pages that 
you are signing. And my question to you is: How knowingly are 
people about the arbitration provisions and the agreement at 
the time that they are actually signing it? Is it something 
that you believe they actually focus on and they know that they 
are signing an agreement that says if there is a dispute with 
the nursing home, it is going to go to arbitration? Or do you 
think this is part of the boilerplate that they end up signing? 
Who wants to take that question? Kelley? Ms. Rice-Schild?
    Ms. Rice-Schild. I will take the question since I probably 
have the most experience explaining admission to residents. The 
residents, when they are admitted--and I will speak for my 
facility. Many times it is not on the day of admission, and I 
know that a lot of my peers, it is not on the day of admission, 
because it is a hectic and emotional day. And in our case, the 
arbitration agreement needs to be initialed and explained. So 
before the patient or representative initials that section, you 
explain to them exactly what it means. And it is also 
voluntary, just like admission to the facility is voluntary. 
You do not have to--you are not forced to stay in the facility 
if you experience bad care. You are not forced to sign the 
arbitration agreement. It is 100 percent voluntary, and you can 
cross it out if you wish, and it makes no difference.
    Senator Salazar. And how many of the patients that you 
admit actually cross it out?
    Ms. Rice-Schild. I have had about four or five cross it 
out.
    Senator Salazar. Four or five out of--
    Ms. Rice-Schild. Four or five since we have started using 
arbitration clauses in admission agreements. I know for other 
facilities it is about 90 percent that do sign the arbitration 
agreement, 10 percent that do not.
    Senator Salazar. So most people will go ahead and sign it.
    Ms. Hirschel?
    Ms. Hirschel. Yes, Senator, I think it was really telling 
that Senator Martinez himself said that he really did not know 
if the admissions paper he signed for his family member 
included a mandatory arbitration provision. And I know 
absolutely that if I were to poll all of the clients I have had 
in the last few years about what the--not just whether there 
was arbitration, but what most of the provisions in the 
admissions contract were, my clients would not be able to tell 
me that. And certainly not all facilities have the practices 
that Ms. Rice-Schild has described.
    So I think that the combination of the fact that these are 
sometimes varied, they are in legalese in many cases, and there 
is just too much going on means that families simple do not 
understand them.
    Senator Salazar. Let me ask another question related to 
arbitration. You know, as a lawyer practicing in the private 
sector for a long time, I often would talk to my own clients 
about looking at less expensive ways of being able to resolve 
disputes by going through mediation and going through 
arbitration and avoiding the high costs of a full-blown court 
dispute. It seems to me that since the Federal Arbitration Act 
was passed for nursing homes in 1925, a lot has happened. And I 
would ask the question whether we just need to reform the 
mediation, arbitration, dispute resolution provisions of the 
law, or do you think we just need to throw them all out? Who 
wants to take that one? Yes, at the very end, Professor?
    Mr. Ware. Senator Salazar, I think you raise an important 
question because the Federal Arbitration Act has been serving 
this Nation for 80-some-odd years now. And I think part of the 
genius of this act is that it does give the courts on a case-
by-case basis the power to decide the variety of issues that 
have been raised by the witnesses here.
    For example, Ms. Hirschel refers to arbitration agreements 
that allow the facility to choose the arbitrator. That is 
something I have never seen, and occasionally I have seen 
outside of the nursing home context an agreement allowing the 
party that drafted the arbitration agreement to choose the 
arbitrator, and courts, I have seen--every time I have seen 
this--hold that unconscionable, unenforceable. Some of the 
other clauses the witnesses have mentioned also, courts 
frequently hold unconscionable, such as overly high fees for 
the consumer or one-way arbitration that Senator Feingold 
referred to where only one party is bound to arbitrate.
    In other words, these are the sorts of extreme clauses that 
are one-way, that are favorable to one side. The law is working 
in that courts do refuse to enforce them.
    Senator Salazar. Let me just ask a question of all of you 
and just ask you to raise your hands. I will give you three 
options. If you were Queen for the Day and you had to choose 
between three options--one, throwing out the Federal 
Arbitration Act, leaving it silent; two, reforming it to take 
care of some of the abuses that people have talked about; or, 
three, just keeping it the same, keeping it as it is.
    So throw it out, how many would just throw it out? Raise 
your hand if you would just throw it out.
    Okay. How many of you--you might want to throw it out, you 
might want to think about it.
    How about reform? How many of you would want to reform it 
and it needs change? So three of you.
    And how many of you would say keep it as it is? Okay. Thank 
you very much.
    Thank you, Mr. Chairman.
    Chairman Kohl. Thank you, Senator Salazar.
    Ms. Rice-Schild, according to stats that I have seen, close 
to 70 percent, 65 to 70 percent of people admitted to long-term 
care facilities have some form of dementia or serious mental 
impairment. Under what conditions could we imagine that they 
are qualified to make the kind of a judgment that we are 
talking about here at this hearing?
    Ms. Rice-Schild. Chairman Kohl, if a patient has dementia 
or is unable to sign for themselves, then in Florida there is a 
State law that requires a health care proxy. The person that 
has been designated to make health care decisions on behalf of 
the person because they are not mentally capable to would be 
responsible for all health care facilities, including signing 
the admission contract.
    Chairman Kohl. But isn't it true that when you are dealing 
with a class of people, the ones that we are primarily focusing 
on, when you are dealing with people who have such impairments, 
it is not possible for them to be making these kinds of 
decisions that we are talking about right now.
    Ms. Rice-Schild. Yes, that is correct, Senator. That is why 
somebody has been appointed to make those decisions for them.
    Chairman Kohl. I want to ask this question: In our bill, we 
are suggesting that the decision as to whether or not we engage 
in arbitration or go to court should be made after a dispute 
arises. That presupposes that both parties will decide, and, 
you know, they will figure out what they believe to be the most 
appropriate way. Whether they have their day in court, which 
is, you know, part of the American basic fabric of justice, or 
whether they choose to go to arbitration, now we are making a 
judgment here. I mean, you know, obviously things are not--but 
isn't that the most reasonable way to litigate? Decide what is 
going to be done in the event that an issue arises, that after 
the issue arises, the party has a right to go to arbitration, 
or the party has a right to go to court? If as you say, Mr. 
Ware, they will always decide to go to court, well, not 
necessarily. But if they would, that is the American way. So 
what is the issue, Mr. Ware?
    Mr. Ware. Well, the issue is whether people should have the 
option to agree at the pre-dispute stage to bind themselves to 
this contract.
    Chairman Kohl. Well, why should they do that? I mean, why 
don't we just abolish court proceedings altogether in 
everything and just say the American way from now on is 
arbitration, we do not go to court, we do not deal with juries, 
we do not deal with that whole process? What is so different 
about long-term care facilities that it should be accepted as 
the common way in which we handle disputes in our society?
    Mr. Ware. Well, Senator Kohl, as even Senator Feingold 
alluded to earlier, there are cases where everyone agrees 
arbitration is desirable, and an agreement of parties to use it 
should be enforced, whether it is a business-to-business case 
or whatever. And my point, again, is there is lots of gray 
area. There are lots of intermediate cases between the extremes 
on one side, where nobody would want the agreement enforced, 
and extremes on the other side, where everybody would. And the 
question again is: Should you resolve that through legislation, 
which paints with a very broad brush? Or should you leave it to 
the courts assessing the nuances of each case on a fact-
intensive basis?
    Chairman Kohl. I am not sure I understand that.
    Mr. Connor?
    Mr. Connor. Senator Kohl, I think it speaks volumes that 
Professor Ware says that given the option about whether to 
choose arbitration or litigation after the dispute has arisen 
speaks volumes about the perceived fairness of the remedy at 
issue. He is concerned that if you pass this, nobody will pick 
it. Well, why won't they pick it? Because they are getting the 
shaft in the current system.
    But I can tell you, for instance, there might very well be 
instances involving post-dispute arbitration where a nursing 
home resident who is still alive, who was not killed by the 
abuse or neglect, would prefer to have the case arbitrated and 
brought to a quicker resolution so that they could get the 
benefit of the monies to be awarded to augment the care that 
they would receive going forward into the future.
    But I just think it speaks volumes about the fairness, or 
lack thereof, of this kind of decisionmaking when the 
professor, who studied this for 15 years says, you know, if you 
give a person a shot at it after the dispute arises, they are 
not going to take it, and it is going to gut pre-dispute 
arbitration.
    Mr. Ware. Senator Kohl, the reason parties do not agree to 
post-dispute arbitration very often is because it takes two to 
tango. It takes two to form an arbitration agreement. If either 
side of the dispute thinks litigation is more favorable to them 
than arbitration, then there is no post-dispute arbitration 
agreement. They end up litigating. Sometimes it is the 
plaintiff who says I have got a strategic advantage here from 
litigation; it enables me to do something to club this 
defendant that arbitration does not enable me to do. Sometimes 
it is the defendant who says litigation gives me a strategic 
advantage; it allows me to do something to club the plaintiff 
that arbitration does not allow me to do.
    In other words, the burdensome procedures of litigation, 
the elaborate pleadings and discovery and motion practice and 
all, sometimes that is a tool the plaintiffs can use; sometimes 
that is a tool defendants can use. Arbitration's a quicker, 
cheaper process, gives both sides fewer of those clubs to hit 
the other side with.
    Mr. Connor. All of which, Senator, I would suggest speaks 
to the fact that people are not making an informed judgment. 
They are not giving informed consent on the front end when they 
enter into these agreements.
    Chairman Kohl. Ms. Rice-Schild?
    Ms. Rice-Schild. It just seems to me that doing it post 
would be similar to closing the barn door after the horse is 
gone. It is a very emotional time. It is an adversarial time. 
And if you are going to be clear-headed, I think it needs to be 
done prior to any incidents that would arise.
    Chairman Kohl. Yes, Ms. Hirschel?
    Ms. Hirschel. Thank you, Senator. I want to say that I 
really share your confusion about why these cases would be 
considered different and why, if the arguments here apply, we 
would not just throw out our whole civil justice system 
altogether. And I think that neither our civil justice system 
nor families like the Kurths should be vilified. If there are 
costs to litigation, I want to note that there are also 
extraordinary benefits to that litigation, including the public 
disclosure of wrongdoing, appropriate penalties for facilities 
that really have done something terribly wrong; and also, the 
fact that through allowing civil litigation, we do promote 
citizens' belief that the system is just, and that is 
important, too.
    Chairman Kohl. That is a very important point, and I would 
like to ask you that, Ms. Rice-Schild. One of the things that 
keep our society honest is that, you know, people are exposed 
for wrongdoing in addition to being condemned and fined. Why 
should your industry be any different?
    Ms. Rice-Schild. I do not in any way support poor care, and 
I apologize also to Mr. Kurth because I feel it is deplorable 
that conditions should arise like that. I am not here today to 
support any poor-performing facility. I am here really to say 
that we need to have some protection so that the good 
facilities, like my facility, will not go bankrupt with one 
lawsuit. And that could very easily happen. After 60 years, 
four generations, one lawsuit, because I cannot afford 
insurance because in Florida it is not written, my facility 
could be gone. So we do not need to throw the baby out with the 
bath water.
    Chairman Kohl. Again, I want to make the point or ask the 
question. One of the purposes of the system, whether it be in 
your industry or any other industry, is that exposure to 
wrongdoing if convicted, you know, has an adverse impact on 
future business opportunity. Now, why should your industry be 
excepted from that?
    Ms. Rice-Schild. It seems that we currently are included 
with all other businesses in the Arbitration Act, and we are 
being singled out in this bill. I do not know that I can answer 
your question because I feel like skilled nursing facilities 
and, from my experience, 25 years of trying to in joint 
partnership provide very quality care with my patients and 
families, are being singled out.
    Chairman Kohl. You know, one of the things that we are 
working on in our Committee--and we have succeeded in getting 
it--is a public rating of all facilities so that people who are 
thinking about placing a loved one into a facility can look on 
the website and see what the rating is, one star, two, three, 
four, five stars. Transparency, in other words, which is really 
important. I am sure you understand when people choose where to 
enter themselves or enter a loved one in terms of a long-term 
care facility, it is very helpful to know which ones have great 
records and which ones have blemished records.
    Now, this process tends to obscure that, and we are looking 
for transparency. The process that we are discussing today and 
your advocacy of it, Mr. Ware, obscures that. Now, that is 
pretty important, isn't it, Mr. Ware?
    Mr. Ware. Yes. I think it is important to remember that the 
public accountability we all want for negligent nursing homes 
can come through arbitration just as through litigation. People 
have used the word ``secret'' to describe arbitration. But, 
again, that gets to the rare arbitration clause that requires 
parties to the dispute to keep the dispute confidential, and 
courts tend not to enforce those. That is another one of those 
red buttons where courts find unconscionable such agreements. 
So parties to arbitration who want to expose to the public the 
negligence are free to do so.
    Chairman Kohl. Yes, but that is a voluntary thing. When you 
go to court, it is not voluntary.
    Mr. Ware. Well, that is certainly true that the public, 
members of the public, can walk into a courtroom uninvited and 
typically cannot do that in arbitration. That is right. But the 
people who have an incentive to make publicly known negligence 
or a dispute in arbitration, the parties and their lawyers are 
free to do so.
    Chairman Kohl. Yes, but they could be paid, as so often 
occurs in other situations, a certain amount of money to keep 
it confidential.
    Mr. Ware. Oh, yes, Senator. But when you come to a 
settlement agreement that has a confidentiality clause, that is 
an important issue that I know you have worked on. But it is an 
important issue in arbitration and in litigation equally. That 
concern of settlement secrecy is not something particular to 
arbitration.
    Chairman Kohl. Yes, but when you go to court and have a 
jury trial, that is public, isn't it, Mr. Connor?
    Mr. Connor. It is, and I would submit, Senator Kohl, that 
sunshine is one of the best disinfectants for the industry.
    Just to give you an example, I recently tried a case in 
Santa Ana, California, where a woman died from horrific Stage 
IV pressure ulcers to the bone on both heels. In the aftermath 
of that trial, there was a television news clip that ran on the 
news for 2 days that referenced the facility, Sunrise Senior 
Living of Laguna Hills, California. And it referenced it about 
four times in the news clip.
    Now, I am sure that the owners of Sunrise Senior Living 
were mortified about it, but the public benefit to be derived 
from the public learning about what went on in that facility 
was tremendous. And I guarantee you many more people learned of 
the poor quality of care in that facility than they would have 
picked up from an Internet site that had some rating system.
    Chairman Kohl. Anybody else have comments to make on this 
hearing, any issues, implications, inferences, something we 
have not covered that you think needs to be discussed, 
mentioned?
    [No response.]
    Chairman Kohl. Well, I want to thank you all for being here 
today. I think that we have fairly brought to the surface all 
the different issues, the angles, and the implications of what 
we are talking about. And, without objection, letters of 
support for the bill or against the bill from anybody--AARP, 
the Alzheimer's Association, numerous consumer groups, as well 
as any other group--will be included in the record. The record 
will remain open for a week for additional statements, 
comments, questions, and we thank you again for being here.
    This hearing is adjourned.
    [Whereupon, at 11:53 a.m., the Subcommittees were 
adjourned.]
    [Questions and answers and submissions for the record 
follow.]
[GRAPHIC] [TIFF OMITTED] 44741.000

1[GRAPHIC] [TIFF OMITTED] 44741.000

2[GRAPHIC] [TIFF OMITTED] 44741.000

3[GRAPHIC] [TIFF OMITTED] 44741.000

4[GRAPHIC] [TIFF OMITTED] 44741.000

5[GRAPHIC] [TIFF OMITTED] 44741.000

6[GRAPHIC] [TIFF OMITTED] 44741.000

7[GRAPHIC] [TIFF OMITTED] 44741.000

8[GRAPHIC] [TIFF OMITTED] 44741.000

9[GRAPHIC] [TIFF OMITTED] 44741.001

0[GRAPHIC] [TIFF OMITTED] 44741.001

1[GRAPHIC] [TIFF OMITTED] 44741.001

2[GRAPHIC] [TIFF OMITTED] 44741.001

3[GRAPHIC] [TIFF OMITTED] 44741.001

4[GRAPHIC] [TIFF OMITTED] 44741.001

5[GRAPHIC] [TIFF OMITTED] 44741.001

6[GRAPHIC] [TIFF OMITTED] 44741.001

7[GRAPHIC] [TIFF OMITTED] 44741.001

8[GRAPHIC] [TIFF OMITTED] 44741.001

9[GRAPHIC] [TIFF OMITTED] 44741.002

0[GRAPHIC] [TIFF OMITTED] 44741.002

1[GRAPHIC] [TIFF OMITTED] 44741.002

2[GRAPHIC] [TIFF OMITTED] 44741.002

3[GRAPHIC] [TIFF OMITTED] 44741.002

4[GRAPHIC] [TIFF OMITTED] 44741.002

5[GRAPHIC] [TIFF OMITTED] 44741.002

6[GRAPHIC] [TIFF OMITTED] 44741.002

7[GRAPHIC] [TIFF OMITTED] 44741.002

8[GRAPHIC] [TIFF OMITTED] 44741.002

9[GRAPHIC] [TIFF OMITTED] 44741.003

0[GRAPHIC] [TIFF OMITTED] 44741.003

1[GRAPHIC] [TIFF OMITTED] 44741.003

2[GRAPHIC] [TIFF OMITTED] 44741.003

3[GRAPHIC] [TIFF OMITTED] 44741.003

4[GRAPHIC] [TIFF OMITTED] 44741.003

5[GRAPHIC] [TIFF OMITTED] 44741.003

6[GRAPHIC] [TIFF OMITTED] 44741.003

7[GRAPHIC] [TIFF OMITTED] 44741.003

8[GRAPHIC] [TIFF OMITTED] 44741.003

9[GRAPHIC] [TIFF OMITTED] 44741.004

0[GRAPHIC] [TIFF OMITTED] 44741.004

1[GRAPHIC] [TIFF OMITTED] 44741.004

2[GRAPHIC] [TIFF OMITTED] 44741.004

3[GRAPHIC] [TIFF OMITTED] 44741.004

4[GRAPHIC] [TIFF OMITTED] 44741.004

5[GRAPHIC] [TIFF OMITTED] 44741.004

6[GRAPHIC] [TIFF OMITTED] 44741.004

7[GRAPHIC] [TIFF OMITTED] 44741.004

8[GRAPHIC] [TIFF OMITTED] 44741.004

9[GRAPHIC] [TIFF OMITTED] 44741.005

0[GRAPHIC] [TIFF OMITTED] 44741.005

1[GRAPHIC] [TIFF OMITTED] 44741.005

2[GRAPHIC] [TIFF OMITTED] 44741.005

3[GRAPHIC] [TIFF OMITTED] 44741.005

4[GRAPHIC] [TIFF OMITTED] 44741.005

5[GRAPHIC] [TIFF OMITTED] 44741.005

6[GRAPHIC] [TIFF OMITTED] 44741.005

7[GRAPHIC] [TIFF OMITTED] 44741.005

8[GRAPHIC] [TIFF OMITTED] 44741.005

9[GRAPHIC] [TIFF OMITTED] 44741.006

0[GRAPHIC] [TIFF OMITTED] 44741.006

1[GRAPHIC] [TIFF OMITTED] 44741.006

2[GRAPHIC] [TIFF OMITTED] 44741.006

3[GRAPHIC] [TIFF OMITTED] 44741.006

4[GRAPHIC] [TIFF OMITTED] 44741.006

5[GRAPHIC] [TIFF OMITTED] 44741.006

6[GRAPHIC] [TIFF OMITTED] 44741.006

7[GRAPHIC] [TIFF OMITTED] 44741.006

8[GRAPHIC] [TIFF OMITTED] 44741.006

9[GRAPHIC] [TIFF OMITTED] 44741.007

0[GRAPHIC] [TIFF OMITTED] 44741.007

1[GRAPHIC] [TIFF OMITTED] 44741.007

2[GRAPHIC] [TIFF OMITTED] 44741.007

3[GRAPHIC] [TIFF OMITTED] 44741.007

4[GRAPHIC] [TIFF OMITTED] 44741.007

5[GRAPHIC] [TIFF OMITTED] 44741.007

6[GRAPHIC] [TIFF OMITTED] 44741.007

7[GRAPHIC] [TIFF OMITTED] 44741.007

8[GRAPHIC] [TIFF OMITTED] 44741.007

9[GRAPHIC] [TIFF OMITTED] 44741.008

0[GRAPHIC] [TIFF OMITTED] 44741.008

1[GRAPHIC] [TIFF OMITTED] 44741.008

2[GRAPHIC] [TIFF OMITTED] 44741.008

3[GRAPHIC] [TIFF OMITTED] 44741.008

4[GRAPHIC] [TIFF OMITTED] 44741.008

5[GRAPHIC] [TIFF OMITTED] 44741.008

6[GRAPHIC] [TIFF OMITTED] 44741.008

7[GRAPHIC] [TIFF OMITTED] 44741.008

8[GRAPHIC] [TIFF OMITTED] 44741.008

9[GRAPHIC] [TIFF OMITTED] 44741.009

0[GRAPHIC] [TIFF OMITTED] 44741.009

1[GRAPHIC] [TIFF OMITTED] 44741.009

2[GRAPHIC] [TIFF OMITTED] 44741.009

3[GRAPHIC] [TIFF OMITTED] 44741.009

4[GRAPHIC] [TIFF OMITTED] 44741.009

5[GRAPHIC] [TIFF OMITTED] 44741.009

6[GRAPHIC] [TIFF OMITTED] 44741.009

7[GRAPHIC] [TIFF OMITTED] 44741.009

8[GRAPHIC] [TIFF OMITTED] 44741.009

9[GRAPHIC] [TIFF OMITTED] 44741.010

0[GRAPHIC] [TIFF OMITTED] 44741.010

1[GRAPHIC] [TIFF OMITTED] 44741.010

2[GRAPHIC] [TIFF OMITTED] 44741.010

3[GRAPHIC] [TIFF OMITTED] 44741.010

4[GRAPHIC] [TIFF OMITTED] 44741.010

5[GRAPHIC] [TIFF OMITTED] 44741.010

6[GRAPHIC] [TIFF OMITTED] 44741.010

7[GRAPHIC] [TIFF OMITTED] 44741.010

8[GRAPHIC] [TIFF OMITTED] 44741.010

9[GRAPHIC] [TIFF OMITTED] 44741.011

0[GRAPHIC] [TIFF OMITTED] 44741.011

1[GRAPHIC] [TIFF OMITTED] 44741.011

2[GRAPHIC] [TIFF OMITTED] 44741.011

3[GRAPHIC] [TIFF OMITTED] 44741.011

4[GRAPHIC] [TIFF OMITTED] 44741.011

5[GRAPHIC] [TIFF OMITTED] 44741.011

6[GRAPHIC] [TIFF OMITTED] 44741.011

7[GRAPHIC] [TIFF OMITTED] 44741.011

8[GRAPHIC] [TIFF OMITTED] 44741.011

9[GRAPHIC] [TIFF OMITTED] 44741.012

0[GRAPHIC] [TIFF OMITTED] 44741.012

1[GRAPHIC] [TIFF OMITTED] 44741.012

2[GRAPHIC] [TIFF OMITTED] 44741.012

3[GRAPHIC] [TIFF OMITTED] 44741.012

4[GRAPHIC] [TIFF OMITTED] 44741.012

5[GRAPHIC] [TIFF OMITTED] 44741.012

6[GRAPHIC] [TIFF OMITTED] 44741.012

7[GRAPHIC] [TIFF OMITTED] 44741.012

8[GRAPHIC] [TIFF OMITTED] 44741.012

9[GRAPHIC] [TIFF OMITTED] 44741.013

0[GRAPHIC] [TIFF OMITTED] 44741.013

1[GRAPHIC] [TIFF OMITTED] 44741.013

2[GRAPHIC] [TIFF OMITTED] 44741.013

3[GRAPHIC] [TIFF OMITTED] 44741.013

4[GRAPHIC] [TIFF OMITTED] 44741.013

5[GRAPHIC] [TIFF OMITTED] 44741.013

6[GRAPHIC] [TIFF OMITTED] 44741.013

7[GRAPHIC] [TIFF OMITTED] 44741.013

8[GRAPHIC] [TIFF OMITTED] 44741.013

9[GRAPHIC] [TIFF OMITTED] 44741.014

0[GRAPHIC] [TIFF OMITTED] 44741.014

1[GRAPHIC] [TIFF OMITTED] 44741.014

2[GRAPHIC] [TIFF OMITTED] 44741.014

3[GRAPHIC] [TIFF OMITTED] 44741.014

4[GRAPHIC] [TIFF OMITTED] 44741.014

5[GRAPHIC] [TIFF OMITTED] 44741.014

6[GRAPHIC] [TIFF OMITTED] 44741.014

7[GRAPHIC] [TIFF OMITTED] 44741.014

8[GRAPHIC] [TIFF OMITTED] 44741.014

9[GRAPHIC] [TIFF OMITTED] 44741.015

                                 0