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Residents' Rights Threatened by Nursing Home Contracts

As members of the American Association for Justice, our nursing home lawyers advocate for the rights of patients, residents and American families. One of the most widespread threats to these rights are forced arbitration clauses in contracts, and particularly in nursing home admissions contracts.

We wrote about this topic a few weeks ago where we outlined what pre-dispute, binding arbitration clauses are and why nursing homes include them in their contracts.

The New York Times recently published Parts I and II of a series on forced arbitration. This series details the origins and evolution of forced arbitration, how they are abused by corporations, and the catastrophic impact they have on Americans.

Forced arbitration clauses are present in contracts for cellphones, credit cards, car rentals, jobs, internet and cable providers, nursing homes and a myriad of other industries. In a nutshell, these clauses prevent consumers from pursuing claims in court (including joining class-action lawsuits), essentially forcing them to waive their right to the justice system.

Some judges have referred to these clauses as "get out of jail free" cards for corporations, saying they are among the most important shifts in our country's legal history. Created by a group of credit card companies, Wall Street executives and retailers, forced arbitration was established to protect corporations from lawsuits.

What Exactly is Arbitration?

Arbitration is nothing like civil court. Instead of judges and juries, claims are reviewed and decided by arbitrators who are hired by the corporations. The proceedings are confidential and cases do not need to be reported to the government. Arbitrators are able to determine which and how much evidence a plaintiff can present, and what a defense can withhold. Rules of evidence generally do not apply, and arbitrators do not need to have any experience as a judge. Their decisions, however, are final, leaving plaintiffs no possibility to appeal.

Courts are unable to intervene in the arbitration process, even when they are practiced under substantial and obvious injustice.

Arbitration companies are private companies who, as any other business, want repeat business. They foster relationships with defendants because they are repeat customers, and thus have an economic incentive to decide in their favor. The threat of losing business underlies each case. Companies can even specifically state which arbitration company will handle cases within contracts.

How This Impacts Residents

The Times expose includes several stories of nursing home residents and families devastated by forced arbitration. One of these was of a woman with Alzheimer's at Bella Vista Health Center in California. She suffered two sexual attacks at the facility by other residents, and state investigations found Bella Vista had failed to protect her. The woman's family tried to fight to have her arbitration clause in her contract voiced, though they lost that fight and had to settle with Bella Vista under seal.

Another woman with dementia at a nursing home in McLead, Illinois, developed severe bedsores and needed immediate medical treatment. Her legal guardian received a fax stating that doctors at the facility refused to treat her unless he signed a forced arbitration agreement.

Another is the story of Roberta Powers, who lived at Greenbriar at the Altamont nursing home in Birmingham, Alabama. One day, her daughter Roschelle found her holding pills, vomiting and disoriented and alerted the staff. A few days later, Roberta's son found her alone and unresponsive and called an ambulance. Roberta died the next day with more than 20 times the recommended dose of her diabetes medication in her bloodstream.

The family was forced into arbitration with Greenbriar. The arbitrator found in favor of the nursing home.

What Can Be Done

Even in the rare instances when plaintiffs do prevail in arbitration, all evidence is kept confidential, so neither the public nor government agencies can see any patterns or admissions of wrongdoing. Knowing this is a problem, 34 senators (including our Senator Dick Durbin) recently asked the government to deny Medicare and Medicaid funding to nursing homes that use arbitration clauses.

Their letter (readhere) asserts that most families faced with placing their loved one in a nursing home have few options due to costs and location constraints. When forced to make a choice between giving up their right to court or admission into the only nursing home they can afford (and afford to visit), it is not really a choice at all. It is forced, and it is this complete lack of choice that makes it corrupt.

Few people understand when they have signed an arbitration clause, and even fewer understand its consequences. As the 34 senators wrote in their letter, it is "only after a resident has suffered an injury or death, do families truly understand the impact of the arbitration agreement they have already signed."

The American Association for Justice started a petition to urge Medicare and Medicaid to stop funding nursing homes that use arbitration clauses. You can sign the petition.

We have been fighting on behalf of injured nursing home residents and their families for 30 years. We offer free case reviews and accept clients nationwide. Contact our team of nursing home negligence lawyers for more information on our practice.