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Arbitration Clauses and Nursing Home Abuse Cases

Written July 26, 2017

When the time comes to relocate to a nursing home, there’s a lot on your mind. Whether it’s you personally, or a family member, it’s easy to become overwhelmed with the paperwork and logistics involved in the switch.

In our effort to make it as quick and painless as possible, we often sign whatever document is placed in front of us with nothing more than a glance. We trust that the home has our – or our loved ones – best interests at heart.

That can be a big mistake. You could be signing away your right to a lawsuit in the event of injury, abuse, or neglect.

The Arbitration Clause

Care facilities in the United States are increasingly inserting arbitration clauses in their already confusing admission contracts. These documents can be very long and chock-full of complicated terminology. Too many people sign without really understanding what it all means.

We all do it. Think about the last time a website or online business required you to accept their Terms of Service. Did you actually read the whole thing from start to finish before clicking on “accept”?

When it comes to nursing homes, an arbitration clause is inserted into an already bewildering legal document. By signing it, you agree that all disputes will be resolved via arbitration and not a lawsuit. It limits or outright removes your ability to file a civil suit in a case of abuse or neglect causing personal injury or death.

But what exactly is arbitration?

An arbitration is an out-of-court proceeding with a neutral third-party arbitrator who will make a decision regarding the dispute. It is not a court. The person making the decision is not a judge. Most arbitration clauses are binding agreements, meaning both parties must obey the arbitrator’s decision. There is no possibility for appeal. Non-binding versions do exist – where either party can reject and ignore the decision – but they are exceedingly rare.
Nursing homes favor arbitration clauses as it protects them from frivolous lawsuits and limits their liability. But it also leaves the door open to shirk responsibility for gross negligence and abuse. They’re at substantially lower risk of having to pay millions of dollars in financial compensation.

Proposed Changes

The Centers for Medicare and Medicaid Services (CMS) have launched a federal regulation proposal. Called the Reform of Requirements for Long-term Care Facilities, it would require all nursing homes receiving federal funding to follow a set of mandatory rules when it comes to arbitration clauses:

  • nursing homes would be required to point it out and clearly explain its meaning
  • the resident or family member would have to declare that they understand it
  • it must be entered into voluntarily; signing the clause can not be a condition of admittance
  • both parties agree to a neutral arbitrator and a mutually agreeable location for any dispute

The CMS would also like to see arbitration clauses kept separate from the main admittance contract rather than buried somewhere in it.

The Pros and Cons

As with everything in life, there are pros and cons to arbitration clauses.

On the pro side, arbitration can be faster, easier to navigate, and more efficient than a traditional lawsuit. Having a clause in place can help lower the cost of care at the facility because the likelihood of them having to pay a multimillion dollar settlement is considerably lower.

On the other hand, though, a binding arbitration clause can’t be appealed. There is no right to discovery – where both sides in a dispute agree to disclose information with each other – as there is in a lawsuit. Surprisingly, it can be more expensive, too, as both sides split the cost of arbitration 50-50. And perhaps most worrying of all – even in instances of gross negligence or abuse – an arbitration hearing is a private, confidential matter. There is no public record or obligation for a nursing home found “guilty” to report the matter to anyone.

A study of 1449 claims between 2003-2011 found that 30% of abuse complaints handled via arbitration awarded no financial compensation to the victim or his/her family.

You can see why nursing homes like them.

The good news? You don’t have to sign it. It’s illegal to say or even suggest that it’s a requirement for acceptance into the facility. If one is there, ask for it to be removed.

Even if you’ve already signed one, you still have options. If you signed less than 30 days ago, you may be able to revoke your signature. In cases of personal injury or wrongful death, a skilled lawyer may be able to have it ruled invalid depending on the details of your situation.

Arbitration clauses are typically there to protect the care facility, not its residents. Don’t sign one. If you have and find yourself or someone you love the victim of nursing home abuse, there is still hope. The personal injury attorneys at Duffy & Duffy, PLLC may be able to help. Contact us today, and let’s talk.

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