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Adam Graves
Adam Graves
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Proposed Federal Law Could Put an End to Forced Arbitration by Nursing Homes

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Placing a loved one in a nursing home is an extremely difficult and emotional decision. And, the admission process and accompanying paperwork, can be overwhelming to family members who are already agonizing over their decision.Arbitration agreements should not be a mandatory part of staying in a retirement home.

In some states, nursing homes are allowed to bury binding arbitration agreements in stacks of admissions paperwork and gloss over – or fail to explain – what they really mean for residents and their families. If signed, claims such as wrongful death would be resolved in arbitration, rather than in court. For families, that could mean a denial of justice for their loved ones and less compensation for their loss.

The federal government is now considering a proposed rule that would regulate the way nursing homes present arbitration agreements when residents are admitted; however, similar attempts have failed in recent years, making it even more critical for nursing home residents and their loved ones to ensure they are protecting their legal rights.

The Proposed Rule

The proposed federal regulation would ban nursing homes from requiring residents to sign binding arbitration agreements for admission.

Some states already require nursing homes to use only voluntary arbitration agreements; however, in other states mandatory arbitration agreements are allowed and often lead to negative consequences for nursing home residents and their families, particularly in cases involving abuse and neglect. Consider this example from a recent NPR article:

NPR nursing home

Why Understanding Arbitration Agreements Is Important to Nursing Home Residents and Family Members

The high rate of abuse and neglect in U.S. nursing homes makes the proposed regulation a critical safeguard for nursing home residents.

An estimated 22 percent of patients at skilled-nursing facilities experienced preventable injuries, such as medication errors, falls and infections, according to a 2014 report by the U.S. Department for Health and Human Services.

When cases of abuse and neglect are resolved through arbitration and not tried in open court, nursing homes can hide occurrences of abuse and neglect from the public, further perpetuating the systemic health and safety problems that plague U.S. nursing homes.

The proposed federal regulation would require a nursing home to make sure the resident or family member acknowledges that he or she understands the arbitration agreement before signing it; however, assessing understanding is subjective and there is no way to know who is being assigned to explain the agreement and whether it is being explained in a neutral way.

Even if the arbitration agreement is voluntary, residents may still feel pressured to sign the agreement, particularly if it’s part of the admission process.

In states that require voluntary arbitration agreements, nursing homes often bury the arbitration agreements in the admissions paperwork with little to no explanation of what they mean. Thus, people may not understand they are entering into binding arbitration agreements and what that means if a claim against the nursing home were to arise.

Protect Your Legal Rights

If an incident of abuse or wrongful death occurs, families should be allowed to make a decision about arbitration or taking a nursing home to court after the incident occurs, not before.

Industry representatives will argue that arbitration is more efficient for both sides and allows consumers to get “an expedited award.” But research shows that awards from arbitration are about 35 percent lower than if the plaintiff had gone to court.

Whether the federal government bans mandatory arbitration agreements remains to be seen. Massive nursing home corporations have managed to block similar rules in recent years.

In the meantime, consumers can protect themselves from binding arbitration agreements by carefully reading and evaluating every nursing home form before signing it. If you have questions about arbitration agreements or if you have a potential claim against a nursing home, seek legal counsel to learn more about your rights.