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Good News for Nursing Home Patients

Nursing-home-resident-1-300x196Millions of nursing home residents have signed away their right to sue their nursing home, regardless of whether they were sexually assaulted, physically abused or suffered serious injuries as a result of their care. The worst part is: these residents may not even know it. Forced arbitration clauses, which are often hidden in nursing home contracts that families sign, effectively force patients to renounce their ability to go to court, forcing them into binding private arbitration.

Fortunately, thanks to the intervention of the U.S. Department of Health and Human Services (HHS), nursing homes have been barred from inserting forced arbitration clauses as of November 28, 2016. This has significant ramifications that you need to know about.

Binding arbitration clauses customarily require both parties to a contract to agree to resolve their disputes in a private forum, outside the courtroom. This is a routine way for contracts between business entities to resolve their disputes, as it can save them time and money to circumvent the courts. Arbitration clauses in nursing home contracts, however, have vastly different effects. The parties do not enter the contract on equal footing; the nursing home is a sophisticated business with legal representation. The resident is generally elderly and/or disabled, and the resident’s family is often emotionally distressed. For these reasons, many residents sign forced arbitration contracts either without a full understanding of its implications or because they have no alternative.

Unfortunately, under the Supreme Court’s interpretation of the binding arbitration agreement, once a forced arbitration contract is signed, there is no relief from it. In 2014, a woman with Alzheimer’s disease was sexually assaulted twice in two days by residents at a nursing home in California. Even though an investigation found that the nursing home “failed to protect” the woman, the family could not sue in court because of the forced arbitration clause she signed. In another case, a 100-year old woman was strangled to death by her mentally ill roommate, who had been previously described by the nursing home as, “at risk to harm herself or others.” Even though the two clearly should not have been in the room together, let alone without a third party, all attempts by the woman’s family to hold the nursing home accountable were dismissed due to an arbitration clause.

Finally, arbitration clauses are almost always in the interest of the nursing home. Arbitration firms have a clear incentive to side with the nursing homes against the individual plaintiff because the firms depend on the nursing homes for business. In one instance, a nursing home hired the same arbitration firm over 400 times. The perverse incentive for the arbitrator to side with businesses over individuals is exemplified by the fact that people get less money in arbitrations than in trial: “A 2009 study …found the average awards after arbitration were 35 percent lower than if the plaintiff had gone to court.”

If a loved one of yours is currently in a nursing home or is considering one in the future, here are three concrete steps you can take to protect their right to a trial: First, if your loved one is currently in a nursing home, read the contract carefully and, if there is a forced arbitration clause, talk to the nursing home about removing it. If they won’t, consider moving to another nursing home after November 28, 2016 (as all contracts signed before this date will remain unchanged by the law). Second, if you are considering a nursing home, wait to sign a contract until November 28th, the day the law goes into effect, or make sure you do not sign a forced arbitration clause. If you are unsure of what any nursing home contract states, consult an attorney. Finally, educate yourself about the change in law by referring to HHS’ report.

References:

Picchi, Aimee, “Moving Into a Nursing Home? You Will Soon Have More Right,” Consumer Reports, 3 October 2016.

Silver-Greenberg, Jessica and Corkery, Michael, “Pivotal Nursing Home Suit Raises a Simple Question: Who Signed the Contract?” The New York Times, 21 February 2016.

Silver-Greenberg, Jessica and Corkery, Michael, “U.S. Just Made It a Lot Less Difficult to Sue Nursing Homes,” The New York Times, 28 September 2016.

“The American Health Care Association: Special Study on Arbitration in the Long Term Care Industry,” Aon Global Risk Consulting, 16 June 2009.