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Nursing Home Arbitration Agreement Disputes Go On Amid Injunction

For a brief moment last year, it seemed as if nursing home arbitration agreements might be a thing of the past. That’s because the Centers for Medicare & Medicaid Services (CMS) issued a new rule barring any nursing home that accepts federal money from CMS (which is virtually all nursing homes) from requiring mandatory arbitration agreements during the admissions process. That was supposed to take effect in November. courtroom

However, a federal judge in Mississippi granted an injunction against implementation of that rule, at the request of a nursing home industry trade group. The CMS quietly released a memo in December indicating it wouldn’t enforce the arbitration rule so long as the injunction was in place. At this point, there remains uncertainty because it isn’t clear how the Trump administration, which oversees CMS, will handle this issue.

So in the meanwhile, courts across the country continue to weigh in. Prior to the injunction, the Florida Supreme Court ruled that an arbitration agreement signed by an adult son on behalf of his father was not binding on his father. The son did not have power of attorney and thus lacked authority to sign the documents on his father’s behalf, and thus his father wasn’t required to have his claim handled by an arbitrator. 

That was an important ruling because it set clear parameters on what has become a muddled – and increasingly controversial – issue in the courts. The reason so many people are fighting back so fervently is because arbitration outcomes tend to favor nursing home defendants. Arbitrators are chosen by the nursing homes, rely on incoming business from these nursing home disputes and are not bound by the law in rendering their decisions. Yes, they are supposed to be cheaper and faster than going to court, but ultimately, even those cases decided in plaintiffs’ favor are typically less than what plaintiff would have received had the matter been decided by a jury.

More recently, the Georgia Supreme Court took on the issue, though the outcome was not the one for which plaintiff hoped.

In that case, plaintiffs were the widowed husband and daughter of a woman who died allegedly as a result of nursing home negligence. When plaintiff was first admitted to the nursing home, she signed an arbitration agreement, which indicated she would agree to resolve all claims or controversies arising out of her care with an arbitrator, rather than take the matter to court.

After her death, her loved ones filed a wrongful death lawsuit on behalf of her estate. Naturally, defendant nursing home moved to compel arbitration, citing the agreement. Plaintiffs argued, however, that they should not be bound by an arbitration agreement they didn’t sign.

The court of appeals in that state agreed, and found an arbitration agreement shouldn’t bind the decedent’s beneficiaries in a wrongful death claim. However, the state supreme court disagreed and reversed.

This decision, justices ruled, is predicated on the long-standing precedent that holds wrongful death actions are derived entirely from a decedent’s right of action.

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Additional Resources:

United Health Services of Georgia, Inc. v. Norton, March 6, 2017, Georgia Supreme Court

More Blog Entries:

Lawmakers in Some States Seek Crackdown on Bad Nursing Homes, March 9, 2017, Nursing Home Abuse Lawyer Blog

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