Arbitration Clauses in Nursing Home Admissions Paperwork Lower Lawsuit Payouts

When anyone checks in to a nursing home, he or she is invariably and firstly given a large pile of paperwork to sign. And understandably, the person charged with signing those papers may not read every single line on every single page.

Hidden among the legalese is often an agreement to submit all disputes to binding arbitration if anything goes wrong at the nursing home. Rather than being able to sue a nursing home for personal injury or wrongful death, a resident or his or her family would have to handle the matter through a third-party arbitrator, with no recourse if they are unhappy with the result.

In 2012, the Washington Post published an exposé on mandatory arbitration clauses in nursing home contracts, revealing that they were systematically unfavorable to patients and their families. Research has shown that nursing home cases that go to arbitration are significantly more likely to result in no compensation or reduced compensation than cases that are pursued through the court system. In addition, both parties have to pay the arbitrator’s fee, no matter the outcome.

According to the Post, consumer advocacy groups discourage patients and their families from agreeing to mandatory arbitration.

Nursing home advocacy groups argue that arbitration benefits patients. When payouts to victims are lowered, they say, the total cost of care for all patients goes down. But critics counter that because arbitration agreements are confidential, they decrease public scrutiny on the quality of care that patients receive.

Patients and families may not realize it, but in many cases, nursing homes will still admit a patient even if he or she does not sign the arbitration agreement. In fact, the American Health Care Association, which advocates for nursing homes, does not support making that signature a condition of admission.

By leaving the signature off of that agreement, patients and families can handle disputes any way they choose. They may choose arbitration, or they may choose to pursue a trial – whichever fits the circumstances best should an issue arise.