Should-Read: Ann Marie Marciarille: Those Pesky Pre-Dispute Arbitration Agreements for Skilled Nursing Facilities

July 19, 2017

Should-Read: Ann Marie Marciarille: Those Pesky Pre-Dispute Arbitration Agreements for Skilled Nursing Facilities

Should-Read: Ann Marie Marciarille: Those Pesky Pre-Dispute Arbitration Agreements for Skilled Nursing Facilities: “Assisting a parent or loved one in seeking skilled nursing facility admission is no joke…

…which is part of the reason it may be so liberating to laugh about what the snf admissions process may ask of adult sons and daughters of potential patients. Oh, the machinations for admission in an industry where admittance is not guaranteed and where trying to put your best foot forward (easy family to deal with; uncomplicated patient; commercially insured and so on) can bear some resemblance to a fraternity or sorority rush-with all the frantic pleas to “please like me!”  I have never seen this depicted more accurately and more achingly than in the 2007 movie “The Savages.” Laugh-out-loud funny scenes where the adult brother and sister, played by Philip Seymour Hoffman and Laura Linney, try to work the system to get their Dad admitted….

In light of all of this… why be taken back that many if not most snfs include a clause in their nursing home admission agreements requiring the signing party (capacitant older individual or responsible family member) to waive the right to a jury trial on many possible future claims against the snf and to agree to be bound, instead, by binding (often secret) arbitration?  These are  pre-dispute arbitration agreements and their scope extends to bar jury trial on claims of substandard care, as in the Kindred Nursing Centers opinion issued today by the Supreme Court. Enforcement of contractual waiver of pre-dispute arbitration agreements is strongly favored under the Federal Arbitration Act….

We can sleep well tonight knowing that snfs may enforce pre-dispute arbitration agreements signed by adult children of snf applicants under general power of attorney authority without any specific language authorizing jury trial waiver provisions. It would after all, make it “trivially easy” for a state like Kentucky to require under state law  a clear statement of such authority as a way to undermine the FAA. And there you have it.  All contracts, including those often  made in extremis in the face of overwhelming health care need, are just contracts after all. Strike the language you say? Refuse to sign off on that pre-dispute arbitration clause for Mom or Dad’s snf? Ah, but the clause is essential for admission, as is the POA itself for many facilities. You, as adult child of an individual needing speedy admission to a snf, are the supplicant here. And don’t forget it.

Nicholas Bagley: Nursing homes and mandatory arbitration: “Emboldened by a string of aggressive Supreme Court decisions, businesses are increasingly turning to arbitration to shield themselves from civil litigation…

…Arbitration does have its advantages. It’s cheaper and faster than civil litigation, and arbitrators can be selected who have some relevant expertise. In a competitive market, the benefits of arbitration should accrue to consumers in the form of lower prices. But the extraordinary growth of mandatory arbitration over the past couple of decades is one of the more unnerving developments in modern American law. Genuine consent to arbitration is often fictional. Arbitrators tend to favor the repeat players who hire them—companies, not consumers. Arbitration agreements can forestall class action lawsuits, making it difficult or impossible to hold companies to account for small-in-size but widespread injuries. And where civil litigation can shine a light on shoddy business practices, arbitration is shrouded in secrecy.

In October 2016, the Centers for Medicare and Medicaid Services (CMS) decided to push back on mandatory arbitration. By rule, CMS adopted a novel “condition of participation” for Medicare and Medicaid. Nursing homes that participate in the programs—which is to say, all nursing homes—could no longer ask their residents to sign away their right to sue upon entering the nursing home…. Predictably, the nursing home industry sued, arguing that the rule exceeded CMS’s authority…. It’s a big deal, for reasons I’ll explore over the next few weeks in a series of posts. What does the research say about civil litigation and nursing home safety? Can nursing home residents really make informed decisions about surrendering their constitutional right to a jury trial? And is it true that CMS lacks authority to regulate arbitration agreements?


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