Nursing Home Mandatory Binding Arbitration Provisions

Upon admission to a nursing facility, the resident will be required to sign a residency agreement. This agreement will specify all the terms and conditions of the residency concerning fees, the rights and responsibilities of the resident and obligations of the facility. Many facilities have tried to insert mandatory binding arbitration provisions into these agreements so they can avoid lawsuits. Such a clause prohibits the resident from filing a lawsuit in a court of law. These type of arbitration clauses have been the subject of much litigation with some courts upholding them and others holding them to be unenforceable. Thus, you will not have the rights that are provided to you under the law in an arbitration proceeding and you will not be allowed to have a jury trial determination of any dispute with the facility.

Prior to the last presidential election, the federal Medicare and Medicaid agency had issued rules restricting these type of arbitration agreements for long term care facilities. With the new administration, these rules were put on hold. However, new final rules have finally been issued which are somewhat of a compromise between the old and new administration’s policies. Some of the provisions of this new rule are as follows:

The facility may not require a resident or his representative to sign an agreement for binding arbitration as a condition of admission. In other words, they can ask you to sign this voluntarily but not require it. You need to read the agreement carefully to understand this distinction and refuse to sign this portion of the agreement. In general, mandatory arbitration is clearly advantageous for the facility and disadvantageous for the resident.

The agreement must provide for the selection of a neutral arbitrator agreed upon by both parties and a venue convenient to both parties.

The resident must be given a 30 day calendar period during which they can rescind this agreement to arbitrate.

If you are asked to sign a nursing home residency agreement for yourself or another person, you should make sure you understand all provisions before you sign. It is best to have an elder law attorney advise you prior to signing. There is no reason or advantage for the nursing home resident to agree to binding arbitration.