Federal Government Bans Nursing Home Arbitrations

In a landmark policy change, pre-dispute nursing home arbitration agreements have been banned by the Centers for Medicare & Medicaid Services (CMS), a federal agency. CMS explains that banning arbitration agreements in nursing homes is "an integral part of our efforts to achieve broad-based improvements both in the quality of health care furnished through federal programs, and in patient safety." Our government has finally come around on what patient advocates have been saying for years; nursing home arbitration agreements are unfair and block patient's access to courts.

Binding Arbitration in Nursing Home Abuse Cases:
What is it?

 One sided arbitration agreements are taking access to courts away from regular people and shielding large corporations, like nursing home chains, from being held accountable.

One sided arbitration agreements are taking access to courts away from regular people and shielding large corporations, like nursing home chains, from being held accountable.

Upon admission to a nursing home, residents sign a large stack of papers. This includes emergency contacts, insurance information, consent to medical treatment, physician and hospital preference, rules at the facility, etc. Slipped into the voluminous paperwork is an arbitration agreement, which is written in legalese and difficult for a layperson to understand. Most elderly residents do not understand what they are signing, but the legal impact is significant.

Nursing Home Arbitration Agreements Remove Disputes from Courts

When a nursing home enforces an arbitration agreement, this means:

  • The nursing home resident is alleging that they were injured or killed as a result of nursing home abuse;
  • The nursing home is removing the dispute from the proper venue (in Court before a jury) and placing it before a panel of industry-insiders, known as arbitrators;
  • These arbitrators are private, for-profit insiders, not public servants;
  • Discovery (the ability to obtain critical documents and witness statements) is usually limited;
  • Arbitration is private (a jury trial is public); and,
  • Certain damages may be unavailable to the plaintiff in arbitration versus what is available in a jury trial.

Why Forced Arbitration Matters

People are willing to fight and die to protect our constitutional rights. Most Americans are aware that the First Amendment protects freedom of speech and that the Second Amendment provides a right to bear arms. The lesser-known Seventh Amendment is no less important:

In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . 7th Amendment, US Constitution

Arbitration agreements take away this constitutionally protected right to a civil jury trial. Nursing homes employ a team of lawyers to concoct a self-serving arbitration agreement. Most nursing home residents have no idea what they are signing upon admission into the facility. The Federal Government's recognition of this unfairness will create a paradigm shift in nursing home accountability to the public. This change in policy makes every senior citizen in the US safer when they enter a long term care facility.

Questions About Nursing Home Abuse Claims and Arbitration?

If you have any questions about your potential nursing home neglect lawsuit and the arbitration system, speak with our nursing home abuse lawyers today. Call us now at 561-316-7207 for a free consultation.

Florida Law on Nursing Home Arbitration Clauses

Florida Law on Nursing Home Arbitration Clauses

In adopting the Nursing Home Residents' Act, Chapter 400, the Florida legislature was responding to widespread elder abuse in Florida's nursing homes. Romano v. Manor Care, Inc., 861 So.2d 59, 62-63 (Fla. 4th DCA 2004). One of the primary purposes of enacting remedial legislation is to correct or remedy a problem or redress an injury. Campus Communs., Inc. v. Earnhardt, 821 So.2d 388, 396 (Fla. 5th DCA 2002). Accordingly, remedial statutes should be given their intended purposes, and as a result receive “special” treatment such as retroactive application. City of Orlando v. Desjardins, 493 So.2d 1027, 1028 (Fla. 1986). The Florida legislature clearly and explicitly created a remedial statute under its police power in order to protect institutionalized Floridian nursing home residents and to discourage nursing home neglect and abuse.

In determining whether a valid agreement to arbitrate exists, the Florida Supreme Court recently ruled that the presence of a provision in an arbitration agreement that limits a party's remedial statutory rights may render the agreement void as contrary to public policy. Franks v. Bowers, 116 So.3d 1240, 1241 (Fla. 2013) (declaring arbitration agreement void as against Florida's public policy because it limited plaintiff's statutory rights); McKenzie Check Advance of Florida, LLC v. Betts, 112 So.3d 1176, 1183 (Fla. 2013). See also Shotts v. OP Winter Haven, Inc., 86 So.3d 456, 474-75 (Fla. 2011); Gessa v. Manor Care of Florida, Inc., 86 So.3d 484, 489-90 (Fla. 2011). The Florida Supreme Court in Shotts and Gessa held that the Nursing Home Residents' Act in Chapter 400 is remedial in nature and certain provisions found in arbitration agreements may abrogate those remedial rights specifically conferred upon nursing home residents by the Florida legislature. Shotts, 86 So.3d at 474; Gessa, 86 So.3d at 492; see also §§ 400.022, 400.023, Fla. Stat. (2013). If an arbitration agreement limits or impinges on the ability of a nursing home resident to effectively vindicate its statutory rights in the arbitral forum, the Florida Supreme Court has found that the arbitration agreement may be rendered unenforceable as against Florida's public policy. Shotts, 86 So.3d at 474; Gessa, 86 So.3d at 493.

The Nursing Home Resident's Rights Act, found in chapter 400 of the Florida Statutes, is a remedial statute which was enacted by the Florida legislature to protect Florida's most vulnerable citizens from abuse, neglect and exploitation. See Knowles v. Beverly-Enterprise-Florida, Inc., 898 So.2d 1, 24 (Fla. 2005) (“The Nursing Home Act, properly interpreted, reflects the legislative plan to protect the interests of these citizens who are forced to avail themselves of nursing home care. Garcia v. Brookwood Extended Care Ctr., 643 So.2d 715 (Fla. 3d DCA 1994)”); accord Blankfeld v. Richmond Health Care, Inc., 902 So.2d 296, 297 (Fla. 4th DCA 2005) en banc; Romano v. Manor Care, Inc., 861 So.2d 59 (Fla. 4th DCA 2003); Prieto v. Healthcare Retirement Corp. of America, 919 So.2d 531, 533 (Fla. 3d DCA 2005).

The Second District's Judge Altenbernd, in a lengthy and well reasoned concurrence in Steihl, expressed his frustration at the proliferation of nursing home arbitration appeals in recent years, and the resultant disparate impact of an ever-changing body of law on the remedial rights of Florida's nursing home residents. Judge Altenbernd noted that as of the August, 2009, with the issuance of the Steihl opinion, there were 35 reported decisions in these matters. At present, only four (4) months after Steihl, there are 50 and counting. Instead of the professed reason for promoting the use of arbitration-streamlining dispute resolution and reducing litigation expenses, nursing home arbitrations have had quite the opposite effect, causing Judge Altenbernd to agree with the majority in Steihl based solely on the existenceof binding precedent, but changing his mind about the wisdom of allowing arbitrators to dictate or alter the public policy of this state.

I have come to the conclusion, however, that it is both bad policy and bad law to allow an arbitrator to make case-specific, non-precedential, confidential decisions about the enforceability of clauses in an arbitration agreement when those clauses limit or eliminate rights specially created by the legislature to protect nursing home residents. In the context of a dispute between a corporation that essentially has physical custody of an elderly person and that person's guardian, when the dispute arises not from contract law, but from special rights created by the legislature for the protection of the elderly, and when the contract is not a unique contract negotiated on a level playing field, but a form contract applicable to a large group of senior citizens, I think it is a mistake to delegate these legal decisions to the arbitrator.

Judge Altenbernd noted the confidentiality requirements of such agreements, explaining the unfairness to residents of the same nursing home experiencing similar injuries where certain arbitrators enforce the limitations, others strike them as void and violative of public policy, and still others might determine the entire agreement to be void and allow the parties to return to court, with only the nursing home chain knowing the outcomes.

Not only does this procedure prevent the creation of binding precedent, it creates nothing approaching the rule of law.... Only the nursing home corporation will know that the results were so different and resulted in vastly different awards. None of the rulings will bind any future claims. No one will have a right to appeal or challenge the different rules of law applied to the same circumstances under the same statutory and contractual law. In passing the bill of rights for nursing home residents, the Legislature cannot conceivably have envisioned such a result.