Sunday, July 27, 2008

Fairness in Nursing Home Arbitration Act

Earlier this week the House Judiciary Subcommittee on Commercial Law and Administrative law approved the federal Fairness in Nursing Home Arbitration Act, which would preclude nursing homes from forcing patients to sign an arbitration agreement prior to a dispute. Consumer advocates including the AARP and the Alzheimer’s Association supported the Act. The Act doesn’t preclude binding arbitration as an option in the event of a dispute, but instead requires the decision to be made by both parties after a dispute occurs.

Arbitration is an alternative method of dispute resolution that does not require going to court. Instead of a court proceeding, an arbitrator is appointed to hear both sides of the dispute and issue a ruling. The arbitrator considers both federal and state law when resolving the dispute. Advocates of arbitration say it provides a faster resolution and is less expensive for both the nursing home and the resident. Critics of arbitration note that arbitrators are less likely to rule for the plaintiff, and if they do, the awards are generally smaller. Critics also note that since arbitration is confidential, it leads to less accountability on the part of the nursing home, and shields the nursing home owner from the consequences of allowing abuse or neglect to occur.

The Fairness in Nursing Home Arbitration Act (the “Act”) was designed to prevent patients from signing away their right to have a dispute heard in court. The Act recognizes that entering a nursing home can be a stressful event, and often occurs after a patient has experienced a serious or long illness. The patient may also be under medication that impairs their judgment or ability to understand the admission documents. In the State of California, nursing homes are not permitted by law to include an arbitration clause in their contracts for admission of a patient. However, most nursing homes do have an optional arbitration clause provision that they attach to the admission contract as an attachment or addendum. Many patients sign this attachment without fully understanding their rights or that they have waived their right to a trial before a judge or jury.

The Act invalidates any pre-dispute arbitration agreement between a nursing home and resident. Some members of the committee attempted to modify the bill, by trying to ensure that the bill would not be retroactive, or by attempting to exclude nursing home physicians. These modifications were rejected. The committee’s approval of the Act makes it one step closer to becoming law. I will keep you posted on further developments.

If you or a family member is entering a nursing home, read all of the admission documents carefully. If you don’t understand something, don’t sign it until you’ve consulted an attorney. Remember, under California law, they can’t make you sign an arbitration clause as a condition to admission.

Thanks for reading. If you have a question or comment, please feel free to post it here. If you have a question or need assistance with a potential claim against a nursing home or assisted living facility, contact me for a confidential consultation.