Beware of Forced Arbitration in Nursing-Home Contracts

We live in a baby-boomer nation. Now, those post-World War II folks are turning 70-something and soon will need nursing homes. The nursing-home industry not only recognizes the changing of the tides taking place but also is capitalizing on it. It knows big business lies ahead.

The American Association for Justice already has raised a red flag. The organization is warning consumers about profit-hungry conglomerates who want more heads in beds and will do so at any cost.

“This increase in residents and emphasis on profits has led to a distressing rise in neglected and abused seniors,” a blog on the AAOJ’s Web site states. “But instead of improving safety, corporate nursing homes are working to limit their accountability and deny residents’ rights.”

One of the ways the nursing-home industry is getting away with such immorality is forced arbitration. Forced arbitration occurs when a company selling a product or service requires the consumer to submit to certain terms as a condition of ownership. For example, the consumer has to sign a document almost always riddled with fine print that basically waives his or her right to sue. In the event of an accident or injury while using the product or service, forced arbitration is the only option for justice, the decision of the arbitrator is absolute, and the results are not public.

“Just by buying a product or service, consumers can lose their right to hold a company accountable,” according to the National Association of Consumer Advocates. “Even if a retirement account disappears, a home is dangerous and defective, or a loved one suffers harm in a nursing home, a forced arbitration clause means there is no right to take the company responsible to court.”

Enter the Fairness in Nursing Home Arbitration Act, a bill introduced by Democratic California Rep. Linda Sanchez that would ban nursing homes from including forced arbitration in their contracts. The bill’s summary states “a pre-dispute arbitration agreement between a long-term care facility and a resident (or anyone acting on the resident’s behalf) shall not be valid or specifically enforceable.”

The legislation is needed in light of case after case after case of elder abuse and neglect in poorly run nursing homes across the country. The National Consumer Voice for Quality Long-Term Care reports of a 93-year-old Massachusetts man whose eye was punctured by the mechanical lift moving him into his nursing-home bed. It also reports of an 85-year-old Florida woman left unattended in her nursing-home room who fell, broke her hip, underwent surgery, developed an infection and died. And of a 65-year-old Mississippi man who got debilitating bed sores during his stay in a nursing home. All the victims – or loved ones on their behalf – signed contracts with forced-arbitration clauses.

“Buried among the fine print in the long and tedious standard form contracts prospective nursing home residents are asked to sign, regarding everything from furnishings to facility procedures, may be binding arbitration clauses, waivers of liability, and waivers of other rights, such as a jury trial,” according to The Harvard Law Record. “Applicants routinely accept boilerplate terms as people do every day – from software to services, and payday loans to employment agreements – usually unaware of the dangers that lurk in these mice-print monstrosities.”