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Arbitration Clauses & Nursing Homes

When our elders can no longer take care of themselves, many of use turn to an assisted living facility or nursing home. Most of the time, these facilities provide sufficient and life-saving care. However, there are those horror stories and examples of times where the system has failed. Some nursing homes are understaffed with poorly trained employees and underpaid workers. The system would rather cut costs and instead make a profit—compromising a patient’s living condition. As such, when signing a contract for a nursing home, many of these agreements contain arbitration clauses to prevent a lawsuit from ever attacking the home. It’s important to know what you are getting into when putting a loved family member into the hands of a trusted professional.

What is an Arbitration Clause?

Arbitration is an out-of-court proceeding in which a neutral third party called an arbitrator hears evidence and then makes a binding decision. It is considered to be the most commonly used method of alternative dispute resolution that either binds an agreement. Binding contracts require participants to follow the arbitrator’s decision whereby the courts will enforce it. There is also a nonbinding agreement (rarely used in comparison to the binding agreement) where either party is free to reject the arbitrator’s decision and take the dispute to court, as if the arbitration has never taken place.

When signed, these agreements become mandatory and are designated so by an arbitration clause. Most contract arbitration occurs because the parties included such an arbitration clause requiring them to arbitrate any disputes arising under or related to the contract. If a provision like this isn’t included in the contract, the parties can still arbitrate if they both agree to it (although it’s tough to reach an agreement to arbitrate once a dispute has arisen). Moreover, these agreements have advantages and disadvantages that would be essential to know about.

  • Advantages: It is usually faster, simpler, more efficient and more flexible for scheduling than litigation. It can also avoid some of the hostility of courtroom disputes, perhaps because it’s a private proceeding versus the public drama of the courtroom. If the subject of the dispute is about something specific, such as nursing home abuse, the parties can select an arbitrator who has experience in that field, rather than a judge who may not be familiar with the issues involved.
  • Disadvantages: A binding arbitration ruling cannot be appealed. It can only be set aside if a part can prove that the arbitrator was biased in the decision or that the arbitrator’s decision violated public policy. As opposed to a court case, there is no automatic right to discovery. This is an important step in litigation whereby the parties have to disclose information about their cases to the other party. Continually, the costs of arbitration can be significant, in some cases, they may even exceed the costs of litigation [1].

How is it effecting Nursing Homes in Florida?

According to an article on Law 360, this past summer, the Centers for Medicare & Medicaid Services announced a proposed regulation restricting the use of binding arbitration agreements by nursing homes. CMS describes the proposed requirements as follows: the nursing home must explain the agreement; the resident must acknowledge understanding the agreement; the agreement must be entered into voluntarily; and the arbitration session must be conducted by a neutral arbitrator in a location that is convenient to both parties. Additionally, and most importantly off all, under this proposed regulation, admission to the nursing home cannot be conditioned on signing or anyone else from contacting federal, state or local officials, including the Office of the State Long-Term Care Ombudsman [2]. While still being debated, in Florida:

The Florida Arbitration Code (FAC) is applicable to arbitration agreements that do not involve interstate commerce. The FAC governs the arbitration process, including the scope and enforceability of arbitration agreements, the appointment of arbitrators, arbitration hearing procedures, the entry and enforcement of arbitral awards, and any appeals of awards. Under the FAC, Florida courts have held that the determination of whether any dispute is subject to arbitration should be resolved in favor of arbitration. A court’s role in deciding whether to compel arbitration is limited to three gateway issues to determine the enforceability of an arbitration agreement: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration has been waived. The FAC applies in arbitration cases only to the extent that it is not in conflict with federal law.”[3]

As such, if a party tries to challenge the validity of an arbitration clause, he or she must assert contract defenses applicable to all contracts, such as fraud, duress, or unconscionability. One such example is in the case Sovereign Healthcare of Tampa v. Estate of Yarawsky, 2D13-2083, where an elderly nursing home resident had lived at the plaintiff’s facility for 10 months prior to his death. After his death, the decedent’s estate filed a lawsuit against the nursing home, alleging that the decedent died due to the nursing home’s negligence. In return, the nursing home filed a motion to compel arbitration on the basis that the resident admissions forms and financial agreement executed at the time of the decedent’s admission contained an arbitration agreement. The final decision upheld the trial court’s rescission of the motion to compel arbitration, finding that the decedent was not bound by the terms of the admission paperwork or the arbitration clause in it because of the fact that the decedent’s wife executed the agreement as the responsible party—not as the decedent’s representative. As such, there was no evidence that the wife had the authority to bind the resident to the arbitration agreement [4].

Dolman Law Group

Arbitration clauses in any contract can add a whole new level of difficulty to a lawsuit and often requires the counsel of an experienced personal injury attorney from the Dolman Law Group. If a loved one has suffered a life-changing physical injury or you have lost a loved one because of an assisted living facility or nursing home that was negligent or failed to fulfill its care obligations, you may have grounds for a nursing home negligence case. All citizens are entitled to the same civil rights regardless of age. If a nursing home is abusing those rights by providing inadequate or abusive care, they must be held accountable. Call our offices today if you have problems with arbitration clauses and suspect nursing home neglect. The number to dial is (727) 451-6900.

Dolman Law Group
800 North Belcher Road
Clearwater, FL 33765
(727) 451-6900

Florida Nursing Home Abuse Attorneys

References:

[1] https://www.nolo.com/legal-encyclopedia/arbitration-clauses-contracts-32644.html
[2] http://www.law360.com/articles/731269/nursing-home-arbitration-agreements-attacked-from-all-sides
[3] https://www.flsenate.gov/UserContent/Session/2011/Publications/InterimReports/pdf/2011-129ju.pdf
[4] https://scholar.google.com/scholar_case?case=540156538620750174&q=Sovereign+Healthcare+of+Tampa+v.+Estate+of+Yarawsky&hl=en&as_sdt=40006&as_vis=1