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Arbitration Required for Claims of Injury by a Nursing Home or Assisted Living Facility Resident?

As you may know, businesses and large companies often try to avoid exposure to the courts, by including in their lengthy agreements with customers an often unread provision that requires a customer to go through arbitration instead of the courts, to seek a remedy when harmed.   In other words, to waive their rights to pursue a remedy through the courts.

In 2016 a rule advanced under the Obama Administration was issued by the Centers for Medicare and Medicaid Services (CMS) that prohibited skilled nursing facilities that receive funding from Medicare or Medicaid from requiring residents to sign an agreement waiving their rights to go to court to pursue a claim against the facility before any injury occurred – for example, as part of the admission process, and instead have the dispute resolved through arbitration, a process widely seen as producing results more friendly to the business interests, than consumers.    In 2019 the Trump Administration officially rolled back that ban and a new Rule took effect in 2019, which allows nursing homes to require what are known as “pre dispute arbitration agreements”, but prohibiting a nursing home from requiring prospective residents to sign such as a condition for admission.      (You can find an interesting article on this topic by google searching  “Arbitration has come to Senior Living.  You Don’t Have to Sign Up.”)

As this argument continues to unfold, our understanding is that now such a provision can be included in the admission paper work as long as residents are notified about it, and given a 30 day period to rescind the waiver of a right to go to court.  Nursing home residency rights advocates have asserted that this weaker rule will in effect have the same result of allowing nursing homes to require arbitration as a condition of admission, given a) the extremely stressful circumstances families go through when a senior is admitted to a nursing home facility, and b) the vast discrepancy in negotiating power between a consumer and the institutions concerned.

“[T]he circumstances surrounding the admissions process combined with the enormous disparity of bargaining power means that most prospective residents are unaware of the content of what they are signing or the significance of the decision to enter into a pre-dispute arbitration agreement,” the group Justice in Aging said in a statement. “In short, allowing facilities to ask residents to sign pre-dispute arbitration agreements is unfair to residents and their families and will harm their rights, safety, and quality of care.”  As I understand it, even this weaker rule will not apply to many institutions, and assisted living facilities.

Our senior citizens and the disabled who often have no alternative than reside in facilities of this nature, are a particularly vulnerable lot (as are their families, by extension).  As a matter of public policy, why would we want this population to be required, as a practical matter, to waive their rights to sue, if they are harmed?  To those familiar with the admission process for many (not all) nursing facilities, the idea that those seeking admission are making knowledgeable decisions about the terms of the admission agreements, and whether to accept or rescind the arbitration of a future harm, is sadly… laughable.  And let this be another warning to those who are willing to serve as Responsible Party upon any admission agreement.  In all be extremely unusual cases, only the party being admitted to the facility should sign the admission agreements.  Those who may be serving as a power of attorney, or be a joint owner of an account, can be required to agree not to use the funds of the senior for purposes other than to meet the needs of the senior, but many admission agreements go far beyond that and impose duties on the Responsible Party, of which they may be unaware, or even if told about them in a cursory way, may not fully grasp the legal obligations and financial liability they are assuming if they sign documents as Responsible Party.

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