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Long-Term Care Contract Provision Under Fire
By
Michael A. Piekarz
Staff Writer
What
critics call a “disturbing increase” in long-term care
contracts containing pre-dispute arbitration agreements has resulted
in congressional efforts to ensure that long-term care facilities
are held publicly accountable for substandard care.
Many long-term care facility contracts contain binding mandatory arbitration
clauses (BMACs). These clauses require residents or their legal representatives
to resolve disputes that arise between residents and the facilities by using
mandatory arbitration. Such arbitration agreements usually require that all parts
of the legal process remain confidential.
Critics point to areas of particular concern. Most nursing home residents and
their families are unaware of arbitration clauses in admission documents and
unwittingly waive important rights. The secretive nature of the arbitration process
can mean that the courts have little involvement. Often, courts cannot decide
the enforceability of these binding mandatory arbitration clauses in contracts.
There are also concerns that arbitration companies are beholden to the nursing
homes that hire them for repeat business, which creates a bias against consumers.
“Typically, admissions agreements are presented on a ‘take-it-or-leave-it’ basis.
Residents have few choices because they require immediate admission or because
there are no other facilities in the area,” said Senator Herb Kohl, D-Wis.
“As a result, whether or not they understand the arbitration provision,
they often feel compelled to sign in order to ensure that their loved one will
be admitted,” he said.
In April, Senator Kohl and Senator Mel Martinez, R-Fla., introduced S. 2838,
the Fairness in Nursing Home Arbitration Act of 2008 (FNHA). The legislation
is a narrowly-targeted measure that would prevent nursing homes and assisted
living facilities from insisting that prospective residents sign them as a prerequisite
for care.
“Every American deserves equal protection under the law and the right to
seek legal recourse when they’re harmed by others,” said Senator
Martinez. “Prospective nursing home residents – one of our nation’s
most vulnerable populations – should not be forced to decide the forum
for resolving their potential claims as a condition for admittance to a nursing
home.”
Other steps include government hearings on BMACs. On June 18, 2008, the Senate
Special Committee on Aging conducted a joint hearing with the Senate Committee
on Judiciary, Subcommittee on Antitrust, Competition and Consumer Rights to discuss
the FNHA.
The joint panel first heard from David Kurth of Burlington, Wisconsin. Kurth
testified about his family’s experience with the tragic passing of his
father in a nursing home and the facility’s attempt to invalidate an arbitration
agreement signed by his mother during the admissions process.
Kelley Rice-Schild testified on behalf of the American Health Care Association,
and she talked about the bill from her perspective as executive director of a
long-term care facility in Florida. Finally, Stephen Ware, Professor of Law at
the University of Kansas, discussed arbitration agreements and the arbitration
process.
“We believe the recently-introduced Fairness in Nursing Home Arbitration
Act of 2008 is a misguided attempt to restrict and weaken the Federal Arbitration
Act (FAA), which has been in place for more than 80 years,” testified Rice-Schild.
“We firmly believe this legislation and other efforts to undermine the
FAA is bad public policy and a step in the wrong direction.”
The FNHA is in the first step of the legislative process and has been referred
to the Senate Judiciary Committee for further action.
This page and its contents ©2008
Metropolitan News Company, Inc.
