Throughout the country, there are hundreds of assisted living centers and nursing homes that include arbitration clauses in their admissions paperwork. These clauses are often not understood by the seniors who sign them, or by family members who submit paperwork on behalf of a loved one who is entering a nursing home. Unfortunately, whether the clauses are understood or not, they can seriously curtail the rights of nursing home residents and their families.
When an arbitration clause is signed, the resident and his loved ones waive the right to make abuse claims in court, even in cases of serious abuse or neglect that have devastating consequences or that result in death. Instead of going to court with a claim for damages after abuse or neglect, the resident or his family must resolve their claims in a more secretive arbitration process. This process can often end up being more favorable to nursing homes, and can sometimes stick families pursuing abuse or neglect claims with part of the costs of arbitrators fees.
Many people who have been affected by the limitations of these arbitration clauses are challenging them, and a federal rules has emboldened challengers, according to Star Tribune.
The Supreme Court is also scheduled to hear a case on arbitration clauses, which could hopefully make these clauses invalid in at least some circumstances.
Traditionally, the law favors enforcement of arbitration clauses. However, late last year, federal regulators banned many long-term care facilities from requiring pre-dispute arbitration. The federal ban applied only to long-term care facilities which receive funds from Medicaid and Medicare. Since most nursing homes do depend upon Medicaid and Medicare to pay a substantial portion of resident fees, this meant the ban applied to a substantial number of care facilities. Around 15,000 long-term care facilities ended up being restricted by the rule from forcing residents into arbitration when disputes arise.
The federal rule was blocked in court from taking effect. But, those who signed arbitration clauses or whose loved ones signed the clauses are citing the federal rule when they try to challenge the enforceability of the clauses. The rule is being used to suggest that many arbitration clauses are not valid, and that victims of neglect and abuse should be given the chance to be heard in court.
It remains to be seen if these challenges against arbitration clauses are effective. There is also a pending case before the Supreme Court, Kindred Nursing Centers v. Clark, which looks at the question of what happens when the arbitration clause is signed by an agent who was given authority under a power of attorney.
The Supreme Court of Kentucky found that those with the power of attorney weren't granted permission to waive the rights of residents to a trial, and thus the arbitration agreements weren't binding. The U.S. Supreme Court may or may not agree. If the court does find the agent's signature doesn't create a binding arbitration clause, this will ensure that at least in some situations, a nursing home patient can pursue a civil case rather than being forced to arbitrate.