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Do I Have to Sign a Nursing Home's Arbitration Agreement?

Nursing home admission contracts are confusing and often full of legal jargon and fine print. If you have a loved one whose mental or physical health is deteriorating and you do not have the ability to care for them yourself, you likely need to get them accepted into a nursing home or other assisted living facility sooner rather than later, and you may not have the time or means to read or fully understand the contract. Unfortunately, many nursing homes depend on this, which can lead to people signing binding arbitration agreements unknowingly, or without knowing what that entails.

One of the most important things you can do before admitting your loved one into a nursing home is to check the contract to see if it includes a binding arbitration clause.

What Is an Arbitration Agreement?

When you sign a binding arbitration agreement, you waive your right to file a lawsuit and your constitutional right to a jury, if the nursing home is later found guilty of malpractice, abuse, or neglect.

This doesn’t mean you have no way to get justice, but it does mean you have to go through private arbitration rather than a lawsuit and must agree to whatever decision is made in the arbitration, even in cases of wrongful death.

What is arbitration?

An arbitration hearing is similar to a civil lawsuit in that both sides present evidence to support their positions, and then a neutral third party weighs the evidence before issuing a ruling.

However, in arbitration, the person making the decision is not a judge, it doesn’t take place in a courtroom, there’s no jury present (which is otherwise a constitutional right), and there’s rarely an option to appeal. But the decisions made are legally binding.

Why do nursing homes like arbitration?

Many businesses prefer arbitration hearings because they are much quicker to resolve, and much cheaper to conduct. However, there are several other key reasons nursing homes push for arbitration:

  • Arbitration hearings are always conducted privately, which means watchdog groups can’t monitor them to ensure everything that happens during the hearing is legal.

  • The results of arbitration hearings are also private, which means the nursing home doesn’t have to report what happened, even if they are found guilty of abuse or negligence.

  • The same stringent rules for evidence don’t apply, which means the nursing home could offer up unsubstantiated rumors about the resident as evidence to try to discredit them (this type of evidence is not admissible in personal injury lawsuits).

  • Although arbitrators are supposed to be neutral, many are employed by for-profit groups, which means they may choose to side with the nursing home, their client, to earn more business.

  • Even when arbitrators side with the resident, the damages awarded are usually much lower than they would receive in a personal injury lawsuit.

  • Arbitration can make it too inconvenient for the resident’s family to pursue a hearing – for example, if the nursing home is part of a chain with its headquarters in another state, they could force the resident to attend a hearing in that other state.

Are Mandatory Arbitration Clauses in Nursing Home Contracts Legal?

It’s currently illegal to make arbitration a requirement for acceptance into a nursing home or other assisted living facility or to say or suggest it is. If you see an arbitration clause as part of your loved one’s nursing home contract, ask for it to be removed.

Until recently, as many as 90% of nursing homes required signing an arbitration clause before a potential resident could be accepted for admission. However, under the Obama administration, a law was passed stating nursing homes that accept Medicare or Medicaid cannot use binding arbitration in disputes with residents.

This law was further revised under the Trump administration to state that nursing homes may use binding arbitration but cannot make it a mandatory condition for admission and must clearly state that it is not required for admission in their admission contracts.

What to Do If You’ve Signed an Arbitration Agreement

If you signed the nursing home contract and its included binding arbitration clause less than 30 days ago, you may be able to revoke your signature with the help of a lawyer. However, if more than 30 days have passed, hope is not lost.

Sawyer Law Firm is one of the few nursing home abuse firms in Alabama to take on cases involving arbitration and win. Your family deserves compensation when the facility you entrusted with your loved one’s health and well-being abuses that trust. Speak to our firm today for a free case consultation and let us fight for you.


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