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Government Considering Regulation of Nursing Home Arbitration Agreements

Dean Cole of Minnesota began to wander at night as his dementia worsened; he even forgot how to drink water. He became less and less manageable at home by his wife, Virginia, and was eventually checked into a nursing home by his family.

“Within a little over two weeks he’d lost 20 pounds and went into a coma,” said Mark Kosieradzki, the Cole family’s attorney. Dean was rushed to the hospital, and it was discovered that “he’d become totally dehydrated. They did get his fluid level up, but he was never, ever able to recover from it” and died within the month.

Virginia had signed a number of papers when Dean was first admitted to the nursing home, and among these was, according to Kosieradzki, “a binding agreement to go to arbitration if she ever had a claim against the facility.” Rather than take the nursing home to court, her wrongful death claim was handled by three private arbitrators who charge for their services, and Kosieradzki says the arbitration bill totaled $60,750, which was split 50/50 between the two parties in the case. Although Virginia won the case, she was forced to pay the expert witnesses, arbitrators, and attorneys’ fees, and ended up with less than $20,000 for her husband’s wrongful death.

Of course, the original arbitration agreement with the nursing home prohibited Virginia from pursuing a more viable legal claim against the facility. Fortunately, the federal government is looking into new potential safeguards and regulations for how these agreements are handled, as well as newly proposed regulations which would require nursing homes to more thoroughly explain arbitration agreements so that residents and their loved ones better understand the terms and conditions.

Thirty-four U.S. Senators and more than fifty consumer, medical, labor, and legal organizations have not only confronted the government about pre-dispute arbitration agreements, but want them banned entirely. “No one should be forced to accept a denial of justice as a price for the care their loved ones deserve,” said Henry Waxman, a former California congressman. He claims that arbitration agreements help conceal the negligence of nursing homes and abuse of their residents because such cases cannot be tried in open court. “None of the systemic health and safety problems that cause the harm will ever see the light of day,” he says.
On the opposing side of the proposed changes is the American Health Care Association, which represents a majority of U.S. nursing homes. Its senior vice-president for government relations, Clifton Porter II, claims “they’re prescribing us to do things that we, frankly, already do,” though he acknowledges that practices vary by facility and relevant state law. He also points to the prevalence of arbitration agreements throughout the health care industry, such as in doctors’ offices, hospitals, and surgery centers, and somewhat credulously claims that arbitration is “more efficient” for both sides. “It actually allows consumers to get an expedited award,” he said, “and you have the benefit of not having to use the courts and go through the entire process.”

Despite his firm opposition, fact-checkers have been quick to point out that the “expedited award” of arbitration is, on average, 35% lower than if the plaintiff had taken the case to court – a conclusion reached in a study by Porter’s own organization in 2009 – and this is one of the strongest motivating forces behind these newly proposed regulations: family members who are required to sign an arbitration agreement to admit a loved one into a nursing home essentially forfeit the legal right to file suit should abuse or negligence ever be discovered, and those who wish not to abide by such an agreement shouldn’t be required to do so.

For now, Porter stands firm, and claims that the American Health Care Association may fight the government in court if regulation or outright prohibition of these arbitration agreements is implemented.

If you or a loved one has suffered an injury due to medical malpractice or negligence, contact Mike Agruss Law, LLC for a free consultation. We are a Chicago-based injury law firm representing individuals (and their families) who have suffered an injury in an accident. We will handle your case quickly and advise you every step of the way, and we will not hesitate to go to trial for you.

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