What is a Nursing Home Arbitration Agreement and Should I Sign it?

Introduction

It’s an intimidating day for anyone – the day your mother, father, husband, wife, or even you yourself are admitted to the nursing home. Whether it’s for short-term rehabilitation or as a long-term resident, getting admitted to the nursing home for treatment is a new and stressful experience for the resident and their family. In a new and unfamiliar place with unfamiliar people, many questions will go through your mind as you get settled in. You may be wondering, did I choose the right nursing home? How will I pay for my stay at the nursing home? Will the nurses and care providers at the nursing facility take good care of me? 

The health and treatment needs of your loved one are probably first on your mind. Stories of poor care, neglect, and even abuse in the nursing home will leave you wondering if your loved one is safe. One of the last things you might be thinking as you sign the admission paperwork is “what do I do if the nursing home neglects or abuses my loved one?”

Unfortunately, the nursing home has already thought about this long before that first day. If the admission paperwork you or your loved one signs contains an arbitration agreement, then you may sign away the right to have a jury decide whether the nursing home committed neglect or abuse and to hold them accountable if something goes wrong.

Many nursing homes, skilled rehab centers, and assisted living facilities take advantage of the anxiety and confusion of the first day to try and have residents and their families sign arbitration agreements as part of the initial admission process. If you don’t pay close attention to the documents you sign during admission, then you may be forced to pursue justice in a venue that heavily favors the nursing homes when you or a loved one are hurt in the nursing home.

What is Arbitration?

Arbitration is when two parties with a legal dispute agree that instead of a jury trial, they want to have one or more neutral third parties decide the case. If a dispute arises between them, the two parties go to an “Arbitrator” or an “Arbitration Panel” to decide who is right, and how much money should be awarded for any harm they suffered. 

The parties will agree on an arbitrator, or sometimes each side picks an arbitrator of their choosing and those two arbitrators will agree on a third arbitrator to create a panel. Then the case proceeds similar to being in court, with the parties getting discovery and depositions, and then having a hearing where the arbitrators decide the case. The arbitrators’ agreement is binding, meaning the parties have to live with the decision and usually can’t appeal it. 

The arbitration agreement the parties sign controls the process for how arbitration proceeds, but almost always the parties agree to split the costs of the arbitration process including the arbitrators’ fees for their time, and the arbitrators’ decisions are almost always secret.

Does Arbitration Favor Nursing Homes and Assisted Living Facilities?

The simple truth is, arbitration favors the nursing home corporations that push their residents to sign arbitration agreements on admission. Nursing homes have the advantage of being repeat customers for arbitrators, the expenses of arbitration are higher than going to court, there’s no right to appeal an arbitrator’s award, and the arbitrators’ rulings are usually secret. 

This is why nursing homes are so eager to have their residents sign arbitration agreements the moment they enter the facility – they have clear advantages they wouldn’t have in court.

What is an Arbitrator and Who Will it Be?

The arbitrator is the person or people who will decide the case in arbitration. Each arbitration agreement has a different process for picking arbitrators, but often requires picking one or more people from arbitration organizations that are very favorable to the nursing home industry and anti-resident rights. 

Individuals are rarely involved in arbitration, but the nursing homes are repeat customers for the arbitrators that decide these cases. The nursing homes will want to pick arbitrators they know are more likely to rule in their favor. The arbitrators know this, so can be biased in favor of nursing homes to be sure they’re selected more often.

Does Arbitration Force Me to Give Up Any Rights? 

Yes. In addition to giving up the right to a jury trial, residents often waive the right to seek punitive damages and attorney fees. In a civil lawsuit, if the nursing home does something malicious or intentionally violates the resident’s rights, the jury can award damages to punish them and can make the defendant pay the resident’s attorneys’ fees. Many arbitration agreements don’t allow residents to recover these damages, even if the nursing home committed neglect or abuse. 

Arbitration is also binding, which means you give up the right to appeal the arbitrator’s decision and are usually stuck with that decision. Unlike in court where you have a right to appeal the judge’s or jury’s decision, you can usually only appeal an arbitrator’s decision if there was corruption, fraud, partiality, or some other serious misconduct by the arbitrator. 

Is Arbitration More Expensive?

Yes, the expense of arbitration is significant compared to having a judge and jury decide your case. While judges and their staff are paid by taxes, arbitrators are paid for their time by the parties – that bill can amount to thousands of dollars. Even if the arbitration agreement says the parties split the cost, the expense can be thousands of dollars more than filing a lawsuit at the courthouse. 

Sometimes, where the nursing home causes a resident pain and suffering as well as death, the resident’s family has to try the pain and suffering case in front of the arbitrators, but the wrongful death case in court – meaning the same case goes to trial twice. This means the cost to go to trial gets paid twice – expert witnesses have to prepare to testify and appear at a hearing twice, technology and support staff have to appear twice, and the cost to completely resolve a case skyrockets. 

Does Arbitration Take Longer? 

Yes. Nursing homes are often reluctant to honor their own arbitration agreements willingly, and a lawsuit must be filed before they will participate in arbitration. Once the lawsuit is filed, the nursing home’s lawyers file extensive motion practice and briefing insisting the case go to arbitration. If the judge denies their motion, the nursing homes get the right to appeal immediately, and the case will travel up and down the appeals courts for years before anyone even knows if the case will stay with the trial court or get pushed into arbitration. 

Often, there are no time limits on how long a case can be in arbitration, no legal rights to force the nursing homes to provide documents and depositions promptly, and a case can stall out with delay tactics by the nursing homes and their lawyers. As time presses on, the resident and their family can get worn down by the process and more willing to accept lower settlement offers to make it end. This delay is often a part of the nursing home’s strategy to avoid accountability.

Why Do Nursing Homes Want Residents to Sign Arbitration Agreements?

Nursing homes have many advantages in arbitration that they don’t have at the courthouse. They often aren’t at risk of punitive damages or being forced to pay the resident’s attorneys’ fees. The process takes longer and is more expensive than filing a lawsuit, which discourages residents from taking action and makes lawyers reluctant to help. Arbitration results in lower compensation to the injured residents and their families because the arbitrators are often biased in favor of the nursing home industry. And the arbitrators’ decisions are binding and often can’t be appealed, and even when residents do get a substantial verdict against a nursing home in arbitration the result is buried in secrecy. 

Actual examples from Cases

In our experience, arbitration agreements have had serious consequences even when the courts decide they aren’t enforceable. 

In one instance, the father of a 35-year-old girl with serious developmental disabilities has had justice delayed because of arbitration agreements that were present in yearly paperwork sent to him by the group home. For years, the group home provided care to his daughter without asking him to sign an arbitration agreement. Then one year the group home began tucking a generic form arbitration agreement into the yearly paperwork the father would sign for his daughter to continue living there. The agreement said it applied to claims “arising out of the nursing facility admission agreement” – but there was no nursing facility admission agreement, and the group home was not a nursing facility. The father signed several of these arbitration agreements, but then did more research and refused to sign any more of them – even though the group home sent another identical arbitration agreement each year with the yearly paperwork. 

One day, the resident was left alone overnight with an aide who had a history of abusive behavior towards the residents of the group home. There were no security cameras in place, no supervisors, and no other personnel. The following morning, the resident was found with her throat slashed by some sharp edged object by the next shift coming into the building. The overnight aide was acting strangely, went to her car to change her clothes when the next shift came on, and refused to cooperate with police investigating the slashing. 

The father filed a lawsuit for this and other instances of abuse, including leaving his daughter alone in a hot bus for hours on end during a summer day. The group home filed a motion to force arbitration, claiming the father waived the right to file a lawsuit by signing some of the faulty form arbitration agreements. The trial court decided that the arbitration agreements did not apply, but the group home immediately appealed the decision. Justice and closure for the father and his daughter has been delayed as the appeals court decides whether the arbitration agreements apply.

In another instance, a 70-year-old man and his wife have also had their day in court delayed because of an arbitration agreement signed on admission to a skilled rehab facility. The resident was at the skilled rehab facility following treatment for infection in a prosthetic knee replacement. He had a central line placed in his arm to deliver strong antibiotics, however the rehab facility didn’t regularly change the bandage over the central line or clean the central line site and he developed a blood infection. The infection traveled to the implants in his knees, which caused the joints to fail and need replaced. After many months in the nursing home recovering from the infection and unable to walk, the resident and his wife filed a lawsuit against the facility for causing the infection. Unfortunately, there was an arbitration agreement tucked into the admission paperwork he signed when he came to the nursing home. The nursing home has since filed motions with the court to try and force the case into arbitration, causing the progress on the case to hit a standstill. Even if the court rules in the resident’s favor, the nursing home will file an immediate appeal and delay matters even longer.

Conclusion 

If you or a loved one are admitted to a nursing home, skilled rehabilitation, or assisted living facility, always read the admission agreement and other papers the facility asks you to sign very carefully. Arbitration agreements have to be clearly labeled, so a careful read of all the admission papers should be enough to spot one. Residents cannot be forced to sign arbitration agreements as a condition of receiving care from nursing homes. If you think there is an arbitration agreement in the paperwork, you can reach out to an attorney to review the documents before you agree to sign it. 

Arbitration agreements can give nursing homes the upper hand and deny residents the right to a jury trial if the facility causes harm or violates their rights. While you will have a lot on your mind the first few days of admission, be sure to pay careful attention to the documents the facility tells you or your loved ones to sign.

Disclaimer: This information is provided for informational purposes only. Nothing in this article should be construed as providing legal advice or the creation of an attorney client relationship. Laws are updated frequently and change from state to state. If you desire legal advice, you can contact Michael Hill Trial Law at www.protectseniors.com, send an email to info@protectseniors.com, call (800) 659-2712 to begin an investigation or contact another attorney.