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Fairness in Nursing Home Arbitration Act Approved

Jul 17, 2008 | Parker Waichman LLP

The House Judiciary Subcommittee on Commercial Law and Administrative Law just approved the Fairness in Nursing Home Arbitration Act of 2008, moving the Act one step closer to becoming law.  The Act prohibits the signing of an arbitration agreement as a prerequisite to nursing home admission.  Critics of such agreements say they only help shield the owners of long-term care facilities from the consequences of allowing nursing home abuse and neglect to occur on their premises.

This means that a pre-dispute arbitration agreement between a long-term care facility and a resident—or those acting on a resident’s behalf—are not valid nor are these pre-dispute agreements specifically enforceable.  Republicans on the subcommittee voted against the measure and some members tried to add amendments to make the Act easier on nursing homes, for example, Representative Chris Cannon (Republican-Utah) tried to add language to exclude nursing home physicians and providers and ensure the bill would not be retroactive, to name a couple.  These amendments were shouted down in voice votes.

U.S. Senators Mel Martinez—Republican-Florida—and Herb Kohl—Democrat-Wisconsin—introduced the legislation to protect dispute resolution options for nursing home residents in response to the growing number of facilities that required patients to agree to arbitration as the only method for dispute resolution prior to admittance.  "When a family makes the difficult decision to help a loved one enter a nursing home, among the primary considerations is quality care.  Forcing a family to choose between quality care and forgoing their rights within the judicial system is unfair and beyond the scope of the intent of arbitration laws," said Senator Martinez.  "This effort restores the original intent and tells families that they don't have to sign away their rights in order to access quality care."

"Nursing home residents, one of our nation's most vulnerable populations, must not lose their right to hold nursing homes accountable in the event of abuse or neglect," Senator Kohl said. "This bipartisan legislation protects senior long-term care residents who unwittingly sign away their constitutional right to have their case heard by an impartial judge or jury.  I am proud to work with Senator Martinez in introducing this bill, and urge my colleagues in the Senate to pass it without delay."

In 1925, the Federal Arbitration Act (FAA) was enacted by Congress with the intention of “allowing parties an alternative forum to efficiently resolve business disputes.”  Since the FAA was enacted, arbitration has expanded to now include non-business disputes.  Also, nursing homes often require patients to sign mandatory pre-dispute arbitration clauses upon admittance.  Many have long felt this requirement is an “unwarranted intrusion into a vulnerable population's right to access the civil justice system” to resolve potential claims.

The Fairness in Nursing Home Arbitration Act reflects the FAA's original intent and requires that agreements to arbitrate nursing home disputes be made after the dispute has arisen and not at the time of admittance into the home.  While the new Act does not prohibit arbitration in nursing home disputes, it does prevent a nursing home corporation—which typically has greater bargaining power--from forcing residents and their families into arbitration via a non-negotiable contract that was forced on the resident prior to the dispute.  The Act also ensures arbitration occurs on a voluntary basis and is not forced.

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