Ban on Nursing Home Arbitration Agreements Takes Step Forward

A bill prohibiting nursing homes and other long-term-care facilities from having prospective residents sign arbitration agreements before any disputes arise has received the approval of the U.S. Senate Judiciary Committee.

The Fairness in Nursing Home Arbitration Act now will move to the full Senate for consideration.

The legislation seeks to end the fast-growing trend in the nursing home industry of requiring patients to agree to arbitration as the sole way to resolve disputes.

Sen. Mel Martinez, R-Fla., who co-sponsored the bill, hailed the committee's action as "one step closer to giving nursing home residents, and their families, peace of mind that their constitutional rights are protected."

"Under this bill, families will not have to choose between quality care and forgoing their rights within the judicial system," he said in a Sept. 11 statement. "We must ensure that this vulnerable population is taken care of and preserve all of their rights in the event of abuse or neglect."

Arbitration recently has become a hot-button issue in nursing home litigation. A slew of courts across the nation have addressed whether to enforce arbitration agreements signed during the admissions process.

The decisions have been wide-ranging and wildly inconsistent from state to state and even from court to court. If the bill passes, the issue of arbitration agreements' enforceability should finally be resolved.

The legislation would amend the Federal Arbitration Act by banning pre-dispute arbitration agreements between nursing homes and residents.

The bill would make any pre-dispute arbitration agreement invalid and unenforceable and would apply to any dispute or claim that arises on or after the date it is enacted.

Furthermore, it would require the courts, not arbitrators, to determine the validity or enforceability of an arbitration agreement.

Proponents of the bill say it would prevent nursing home owners and operators, who usually have greater bargaining power than do residents and their families, from using such agreements in non-negotiable admissions contracts.

The legislation would ensure that arbitration is voluntary and un-coerced, they say.

Many in the long-term-care industry oppose the bill, insisting that arbitration is a lawful and efficient means to resolve disputes and that the arbitration process is not biased against facility residents.

Opponents further argue that the demands imposed by the increase in litigation expected to result from the bill would lead long-term-care facilities to focus more on legal battles and less on resident care.

They also say the courts already have the ability to invalidate unconscionable agreements.

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