I have written before, briefly, on the redux edition of The Fairness in Nursing Home Arbitration Act.  It is an unnecessary, unwieldy piece of legistlation that 1) tries to solve a problem that is not really a problem; 2) does so in such a way that is both at the same time damaging to residents’ financial interests and de-limiting of the protectioncs already in place; as well as 3) adds expense without value to the end consumer.  

Attorney T. Andrew Graham has commented on this blog before w/r/t these issues, and has both command and clarity in discussing Arbitration in Nursing Home contracts.  So, I wanted to point to an excellent column he has written for McKnight’s.  Its longish, but summarizes the political, legistlative and judicial aspects of The Fairness in Nursing Home Arbitration Act of 2009 (S. 512) very, very well.  

Hopefully, this legislation will be defeated, as it was last term when it was brought before Congress, but I would highly recommend familarizing oneself with the arguments by reading Attorney Graham’s piece.

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Representative Linda Sanchez (D-CA) has reintroduced the Fairness in Nursing Home Arbitration Act.  This act seeks to ban pre-dispute arbitration agreements, even if the arbitration agreement is not required for admission. The parties could agree to arbitration only after a dispute arises.   When the bill was last introduced, and defeated, it included Assisted Living facilities as well as Skilled Nursing Facilities, but the text of the bill’s most recent iteration is not yet available for public review.  

Arbitration agreements have been circling back again and again as one of the most contentious debates in LTC Administration.  From a legal standpoint, arbitration almost assuredly means faster recovery time, and less cost for both plaintiff’s and defendants alike (or complaintents and answerers in the parlance of some Alternative Dispute Resolution folks).

 The at bottom question can be phrased like this: is LTC different from other business such that the only pathway to remedy must necessarily be one through the courts?  

Opinions are myriad, but I will be interested to see, and write about, the debate on Rep. Sanchez’ bill.

The Illinois Nursing Home Care Act prohibits a long term care facility resident from waiving her right to a jury trial before the commencement of any action.   What this means is LTC residents cannot enter contracts that have a waiver of the right to trial.  If they enter into these types of contracts, the clause waiving the right to trial (and/or jury trial) will be null and void.  

Many LTC facilities seek to arbitrate disputes instead of litigating them.  This protects the facilities from expensive litigation and it protects residents and families because the attendant costs of settling a dispute are much lower.  

The rule (sections 3-606 and 3-607 of the Illinois Nusing Home Care Act) conflicts with this desire to arbitrate becasue arbitration agreements generally ask residents to waiver their right to trial in exchange for the facility paying for and committing to arbitration.  

A recent Illinois 5th Appellate District Case confronts this conflict head-on.  Gott v. SSC Odin Operating Co. involved a wrongful death action brought by the representative of a deceased LTC resident against the owner corporation.  The corporation tried to enforce an arbitration agreement the resident signed on admission.  It argued the Illinois rule is preempted (basically overruled) by a Federal law, the Federal Arbitration Act, which promotes arbitration clauses in service and health care industry contracts.  The court found for the resident’s family, concluding the Federal Arbitration Act did not preempt the generally applicable state contract law and defense.  The Gott family was able to go on with their lawsuit against SSC Odin Operating Co.

The consequences of the Odin decision are not that far-reaching (after the IL Supreme Court refused to review the decision, it only has effect in the IL 5th Appellate District), but they do highlight a ongoing struggle in LTC:  protecting the right to sue vs. reducing the costs of disputes (for both facililities and residents).  

I was honestly surprised at the Odin  decision.  Surprised it came down the way it did (similar cases have found Federal preemption more often than preserving state defenses) and surprised the IL Supreme Court punted rather than review the case to give statewide guidance.     This is a much larger issue than I plan to write in this post, but perhaps a lengthier analysis is in order soon in the future.  Until that time, please see other posts on this issue here and here and at the Wall Street Journal.