Binding arbitration clauses are often included in the agreements entered into between the nursing home and resident, or resident representative. The Centers for Medicare and Medicaid Advocacy recently enacted rule 84 Fed. Reg. 34718 permitting nursing homes to enter into pre-dispute, binding agreements. The rule accounts for the sensitive circumstances encompassing a resident’s admission into the care facility. Maintaining enforceable and fair arbitration agreements provide for a more accessible alternative resolution to disputes and prove to be preferable in many situations. The federal rule contains a mandate that arbitration agreements must not be used as a condition of admission, or as a requirement for a resident to continue to receive care at a facility. It also provides that the binding arbitration clause must be clearly explained to the resident or representatives at the time of signing. The purpose for outlaying the intricate elements of the arbitration provision is to ensure agreements are reasonable and equitable. Unlike arbitration provisions in other agreements, nursing home agreements explicitly maintain a 30-day right to rescission – which enables residents to consult with counsel or reassess their decision to sign, should they change their mind.
The importance of a well-drafted arbitration provisions in nursing home agreements, as well as the need to explain same, is underscored by a specific instance earlier this month, where a Pennsylvania Superior Court panel revived the lower court’s decision to deny enforcement of the binding arbitration agreement between the Plaintiff, James Gollick, on behalf of his late mother, Anna may Gollick (Decedent), and Defendants, Sycamore Creek Healthcare Group. The appeal arose from a wrongful death action, asserting that nursing home was negligent in their care of Ms. Gollick. The Court’s decision to overturn the lower court’s denial, was based on the outstanding question of whether the trial court erred in refusing to enforce a valid arbitration agreement between the nursing home and Ms. Gollick. Ms. Gollick signed a binding agreement containing an arbitration provision upon admission to the care facility, that required all disputes be adjudicated through arbitration. Contrary to the assertion of Mr. Gollick that his mother was impaired and had limited capabilities at the time she signed the arbitration agreement, the nursing home states Ms. Gollick clearly understood the terms of the agreement. Similarly, a recent Florida lawsuit involving the enforceability of an arbitration provision – over purportedly prohibitively expensive arbitration fees – was heard before the Florida Supreme Court where it was determined, in enforcing the arbitration agreement, that “it is simply not the role of the judiciary to rewrite the terms of a contract the parties freely negotiated at arm’s length”.
The concern over whether nursing home agreements with arbitration provisions limit a resident’s ability to maintain full legal recourse is unmerited, however the fairness factor ultimately lies in the proper execution of the agreement. The advantages of arbitration provisions in nursing home agreements include less complex and less costly alternatives to the conventional litigation process. A more accessible alternative resolution to disputes proves preferable in many situations and navigating the pros and cons in different healthcare fields should be considered when crafting such agreements to be articulate and comprehensive. Likewise, having proper mechanisms in place to confirm a nursing home resident’s mental capacity to sign agreements is of significant importance. Following simple protocols to explain and ensure the resident’s understanding of the terms may serve as a basis to prevail if enforcement is later challenged.
How Frier Levitt Can Help
Frier Levitt’s many years of healthcare experience and knowledge base provide the ideal insight for assisting healthcare institutions in navigating and preparing exemplary agreements with arbitration provisions. Our main focus is to ensure our clients’ legal interests are well protected and preempt potential legal discourse. Contact us today to learn more about how you can properly prepare and avoid unwanted exposure to potential disputes through properly drafted and binding arbitration agreements.
