The federal government has stepped in to try to rectify a big advantage that nursing homes have traditionally had against those whom allege that they or ones they love have been victimized or abused while in those nursing homes. The new regulation, which severely limits the use of arbitration clauses, threatens to hit nursing homes in their pockets if they do not comply
What is Arbitration?
Arbitration is a process in which a case is heard and decided by an arbitrator instead of a jury in court. The arbitrator acts as a judge, but is not an elected or sitting judge. Arbitrators are often retired judges, attorneys, or other professionals, employed by private arbitration companies.
The arbitrator sets informal rules, which supersede the normal civil rules of discovery. The end result is that arbitration often limits the type of information that can be obtained by each party in the litigation. In many case, the lack of formality can result in the inability to obtain information needed to prove a nursing home’s liability for a resident’s injuries.
Because the arbitrator makes the ultimate decision, a victim is deprived of the right of a jury of his or her peers. Big companies like this because it avoids what they perceive as bias based on the emotions and the sympathy of a jury. In other words, it avoids what they see as large, runaway jury awards, fueled by emotion.
This is especially true in cases that have a lot of emotional “appeal,” such as a nursing home case, where the victim is often an elderly, infirm, and helpless victim, who may have been blatantly ignored or abused.
Fearful that such cases will lead to juries awarding large damages just out of sympathy, homes began incorporating mandatory arbitration clauses into their agreements many years ago. The tactic has worked; one 2009 study noted that arbitration awards were lower than jury awards.
The arbitrator’s ultimate decision is generally final. There is no second chance to go to trial in front of a judge and jury.
Use of Arbitration in Nursing Homes Questioned
Nursing homes like the fact that cases in arbitration are much more private; many aspects of the case do not become public record the way a case heard in court does. Arbitration has often been seen as unfair by consumers and victim advocate groups, for that same reason: It eliminates a victim’s opportunity to have his or her case heard by a jury of peers.
Nursing homes are not the only businesses to use such clauses, but they have been seen as particularly brutal industry for its adoption on the practice. In many cases, a family may have no choice but to admit a loved one into a home. Families coping with the emotional trauma of having a loved one admitted into a nursing home may be under stress and duress. In many cases, there is no meaningful choice—the family either admits the loved one, or the loved one does not get the care and treatment that he or she needs. Smaller communities may only have one nursing home, again leaving a family with no choice but to sign away their loved one’s right to a jury.
Courts have upheld the use of these clauses, even in severe circumstances, such as when a resident who signed the agreement may have been ill, or suffered from Alzheimer’s. In many cases, families sign admitting documents for inform relatives, and thus, the relatives are having their right to a jury signed away by someone else.
New Regulation Threatens Funding
The federal government has now spoken up, in an effort to limit these clauses in nursing homes. The Health and Human Services Department (HHS) has issued a rule that restricts a home’s eligibility to accept Medicaid or Medicare funds, if it utilizes arbitration clauses. Almost all nursing homes receive funding from one of these sources.
The change comes from a need to know. Arbitration decisions are not published or made public the way court decisions are. The agency and supporters of the rule contend that the public has a right to know about lawsuits that allege injury or death that occurs in a nursing home, and that the private and shielded nature of arbitration prevents that transparency.
Legislators in the past have tried to eliminate arbitration through legislation, but few proposals have been successful. Most court decisions have upheld the use of the provisions on court. Thus, agencies such as the Consumer Financial Protection Bureau have tried to restrict the use of these clauses through rulemaking authority, and the HHS is the most recent agency to do so.
With funding threatened, the use of these clauses by nursing homes is expected to cease, and the ability to sue nursing homes for negligence is much expanded. Nursing home representatives say the law is unnecessary and that the HHS has exceeded the scope of its authority in passing the rule. Given the large dollars at stake, it is likely that the rule will be appealed.
If you or someone you love has been injured or been a victim of nursing home abuse, contact attorneys that handle these delicate and sensitive cases. The attorneys at Brill & Rinaldi are available for a free consultation to discuss your nursing home abuse case.