Lawmakers Push for Legislation That Would Make Binding Arbitration Agreements at Nursing Homes Unenforceable

Several Senate lawmakers are pushing legislation that would make binding arbitration agreements by nursing homes unenforceable, the AP/San Francisco Chronicle reports. Nursing homes say that arbitration agreements are voluntary and typically offer a quicker, less costly way than court to settle legal disputes. Bruce Yarwood, president of the American Health Care Association, said that arbitration "is something that's a lot more fair" because the court structure is "not necessarily an unbiased structure," as juries are inclined to hold nursing homes responsible for injuries regardless if they are actually at fault.

However, Senate Aging Committee Chair Herb Kohl (D-Wis.) said, "Many incoming residents lack the capacity to make even simple decisions, much less judge the legal significance of an arbitration agreement." Legislation sponsored by Sen. Mel Martinez (R-Fla.), supported by AARP and the Alzheimer's Association, would make arbitration agreements for nursing home patients unenforceable. According to the committee, more than 100 lawsuits have been filed in the last five years challenging such agreements. The committee will hear testimony on Wednesday from a family who tried to file a lawsuit against a nursing home alleging that negligent care led to a family member's death. The case was dismissed because the wife of the patient had signed an arbitration agreement as a condition of his admission.

Stephen Ware, a law professor at the University of Kansas, in written testimony urged lawmakers not to ban arbitration for nursing homes, noting that the Federal Arbitration Act in some cases allows courts to invalidate unconscionable arbitration agreements. "And this is not just a theoretical protection," Ware wrote. "Each year, there are many cases in which courts hold particular arbitration agreements unconscionable. Among these are cases involving nursing homes."

Lawmakers are not looking to ban arbitration as an option to settle disputes with nursing homes, Kohl said, but rather they want to mandate that a decision to enter arbitration be made by both parties after a dispute occurs (Freking, AP/San Francisco Chronicle, 6/17).