Say No To Nursing Home Arbitration

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The decision to place a loved one in a nursing home is a gut-wrenching, emotionally draining experience. Most likely, the decision has been forced on you by an unexpected serious illness or major injury. Unfortunately, the decision must usually be made in a matter of hours, not days. You are placing the fate of a loved one in the hands of a facility, you likely know very little about. To make matters worse, the process is often accompanied by regret and guilt. To alleviate the guilt, many people need to trust in the nursing home. Most nursing homes understand this and they emphasize their trustworthiness during the admission process and through their marketing.

During the admission process, the nursing home hits you with countless forms. More than one client has told me they feel it is easier to buy a house than to place someone in a nursing home. Given the emotions involved and the strong desire to trust the facility, it’s no surprise most people will sign anything the nursing home puts in front of them without even reading it. The nursing home knows this and takes advantage of this trust.

Most nursing homes include an arbitration agreements as part of the admission process. Having placed their trust in the nursing home, the vast majority of people will sign the arbitration agreement without a second thought. Before your loved one is even through the front door, the nursing home has already violated your trust!

What is an arbitration agreement? Arbitration is a process where the parties to a dispute give up their constitutional right to a jury trial and agree to have the dispute settled by an arbitrator. If used appropriately in the right type of case, arbitration can be an effective method for resolving claims. Arbitration has traditionally been used to settle disputes between large companies or businesses. On the other hand, arbitration is simply not appropriate for cases involving serious personal injury or death.

The state of Georgia understands this and has passed a law prohibiting arbitration in nursing home cases unless the agreement to arbitrate is signed after the resident is injured and the person signing the agreement had a chance to obtain legal advice. The federal government, however, has substituted it’s judgment in place of Georgia’s and overruled Georgia by passing the Federal Arbitration Act (“FAA”), which pre-empts Georgia’s law and allows arbitration in nursing home cases, even when the arbitration agreement is signed before the dispute arises!

It shouldn’t surprise anyone to learn that the arbitration agreements forced on grieving families during the admission process heavily favors the nursing homes. As an initial matter, the arbitrator is typically selected by the nursing home. Usually, the arbitrator belongs to a group that has a long standing relationship with the nursing home industry. Moreover, the arbitration agreement often places substantial financial hurdles to pursue the claim. One agreement we encountered recently required a filing fee of over $5,000.00 before arbitration could be pursued. Fees like this are intended to prevent people from pursuing any claims against the nursing home. It’s also not unusual to find agreements that place substantial limits on what an injured party can recover. For example, one recent arbitration agreement we reviewed placed a limit on the amount of money the arbitrator (who they selected) could award as compensation for any injury caused by the nursing home. Perhaps most importantly, arbitration severely limits the parties rights to conduct discovery. Discovery is the process where parties to litigation exchange information regarding the merits of the case. This also includes the right to take sworn testimony, called a deposition, from nursing home employees. By limiting the right to conduct discovery, arbitration effectively prevents an aggrieved family from learning what really happened to their loved one.

While the arbitration agreements are unfair on their face, the nursing homes aren’t afraid to use unfair tactics to make sure the agreements are signed. First and foremost, nursing homes often tell families during the admission process that the agreements must be signed before they can admit the resident. According to Federal law, this is an outright lie. If the nursing home receives any money from Medicare (which virtually all nursing homes do), the facility cannot require an arbitration agreement be signed prior to admission. Nursing homes also tend to hide the arbitration agreement in the mountain of paperwork they require prior to admission. Usually, the agreement is signed without discussion. We have only had one case where the arbitration agreement was discussed before it was signed. In that case, our client asked the nursing home to explain the arbitration agreement to him. The nursing home told him “the arbitration agreement gives your mother protection in the unlikely event something were to happen to her while she is here”. The statement by the nursing home was misleading at best.

Why does the nursing home care if an arbitration agreement is signed? It’s simple, arbitration agreements help nursing homes avoid responsibility for their conduct. Without the threat of being sued over poor care, nursing homes lose one of their primary incentives for providing the best care possible. While most people would like to believe nursing homes are always going to do their absolute best, history has taught us otherwise. As large nursing home chains have purchased most of the locally owned nursing homes, the nursing home industry has focused less on patient care and more on profit. As a result, nursing home care has declined dramatically. As nursing home care continues to deteriorate, injured patients have attempted to hold the homes accountable the only way they can, by filing lawsuits. Instead of fixing the problem, poor care, the nursing home industry is attempting to take away the only way injured residents can stand up for themselves.

While some U.S. Congressmen are attempting to fix the problem of arbitration agreements in nursing homes by passing the “Arbitration Fairness Act”, we are not confident this much needed law will pass anytime soon. The bottom line is that when you are faced with placing a loved one in a nursing home, you must read the admission agreement closely. As experienced nursing home attorneys, no matter what the nursing home tells you, you should NOT sign any document requiring you to waive your constitutionally protected right to a jury trial.

additional resources:

1. Arbitration At Wikipedia
2. Nursing Home Arbitration Horror Stories