Tag Archives: nursing home

ALR 2016 - 2017

What is Arbitration? Well You Should Know Because it May Just Control the Care of your Parents…

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By: Lauren Piciallo

According Webster dictionary, arbitration is a hearing and determination of a disputed case by an arbitrator. See https://www.merriam-webster.com/dictionary/arbitration. In short, arbitration is an alternative form of private dispute resolution separate from the court system; but if you have more questions about what arbitration is, now is the time to do your research. While arbitration may not regularly flow through the mind of the most people, it does impact most people’s lives. Many people are just a click away from entering the realm of arbitration, as many consumer disputes are resolved via arbitration pursuant to your contractual agreements.

Why does arbitration exist? Well arbitration can offer industries many benefits. Arbitration may be shorter, cheaper, and offer more specialized expertise than the court system. A strong federal policy favoring arbitration exists in United States law, and in most cases parties who agree to arbitration in a contract will go through with the process of arbitration should a conflict arise. Many contractual agreements are controlled by arbitration should a dispute arise including many consumer agreements or employment agreements. Arbitration agreements may be found in the agreement between a nursing home and its residents and families of residents. According to the New York Times, nursing home agreements which contained arbitration agreements have helped reduce the industry’s “legal costs, but it has stymied the families of nursing home residents from getting justice…”. https://www.nytimes.com/2016/09/29/business/dealbook/arbitration-nursing-homes-elder-abuse-harassment-claims.html?_r=0.

Well, that was until an agency within the Health and Human Services Department “issued a rule that bars any nursing home that receives federal funding from requiring that its residents resolve any disputes in arbitration instead of court.”  Id. The rule cuts “funding to facilities that require arbitration clauses as a condition of admission.” Id.  According to the New York Times, “this rule will affect nursing homes with 1.5 million residents and promises to deliver major new protections.” Stories like the one about a 100-year-old woman who was murdered by her roommate, which was initially blocked by the court, will no longer be blocked. Id.

Nevertheless, this change has raised controversy within the industry. The New York Times reported that Mark Parkinson, the president and achieve executive of the American Health Care Association, stated that the “change on arbitration ‘clearly exceeds’ the agency’s statutory authority and was ‘wholly unnecessary to protect resident’s health and safety.’” See id. To those within the nursing home industry, withholding the use of arbitration withholds a less costly alternative to court. Id. Further, some state that the new rule may drive up costs and force some homes to close. Id.  However, others find that the rule will prevent embarrassing practices from being kept “under wraps.” Id.

ALR 2016 - 2017

Federal Courts Weighing Questions on Nursing Home Arbitration Agreements

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By: Jonathan Vaitl

Two cases currently in the federal court system could have significant implications for mandatory pre-dispute arbitration agreements in nursing home admission agreements.

The U.S. Supreme Court heard arguments this month in a consolidation of three case involving a Kentucky nursing home owned by Kindred Nursing Centers LP (“Kindred”).[1] The case centers on pre-dispute arbitration agreements in nursing home admission agreements. The incoming residents who were bound by the arbitration agreements did not personally sign the agreements; family members with power of attorney signed them. When the family members brought wrongful death lawsuits against the nursing home in state court, Kindred sought to enforce the arbitration agreement.

The case initially went to the Kentucky Supreme Court. The Kentucky Supreme Court found that the agreements were unenforceable because of a Kentucky state law that required a power of attorney instrument to specifically empower the attorney-in-fact to enter arbitration agreements. That specific empowerment was missing from the power of attorney instruments in this case.

Now the case will be decided by the U.S. Supreme Court. The plaintiffs argue that this case is about agency law and simple contract formation, which is properly governed by the states. Kindred, on the other hand, argues that the Federal Arbitration Act (“FAA”) preempts state law related to arbitration agreements.

The Kindred case may turn out to be moot, however, depending on a ruling by the Fifth Circuit. Last September, the Department of Health and Human Services (“HHS”) issued a final rule prohibiting nursing homes that accept Medicare and Medicaid from requiring pre-dispute arbitration agreements as a condition of admission. [2] The American Health Care Association challenged the rule’s legality, resulting in a federal court blocking the rule from going into effect. That case has been appealed to the Fifth Circuit, which is currently taking briefs in the matter.[3]

If the HHS ban survives, the Supreme Court’s ruling, whatever it may be, will be left with little direct impact on the specific parties to the actions. However, the Court’s ruling still will likely further clarify the scope of the FAA’s preemption. If the Court finds that the arbitration agreement is valid, then the federal government will effectively be intervening in state agency law as it relates to arbitration agreements.

Nursing homes stand to lose the most in both cases. Attempts to minimize the cost of disputes may become more difficult if nursing homes are not able to enforce arbitration agreements because of state agency laws or federal rules. It will be interesting to see whether the federal courts continue to push the liberal federal policy in favor of arbitration, or if some of the state anti-arbitration efforts finally take hold.

Endnotes:

[1] Kindred Nursing Centers Limited Partnership v. Clark, No. 16-32 (U.S. argued Feb. 22, 2017).

[2] Centers for Medicare & Medicaid Services, CMS Finalizes Improvements in Care, Safety, and Consumer Protections for Long-Term Care Facility Residents, CMS.gov (Sep. 28, 2016) https://www.cms.gov/Newsroom/

MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-09-28.html.

[3] Am. Health Care Ass’n v. Burwell, No. 17-60005 (5th Cir. filed Jan. 5, 2017).

ALR 2016 - 2017

Arbitrability of Claims Regarding Nursing Home Negligence

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By: Faith Van Horn

The Georgia Supreme Court held this month in United Health Services of Georgia v. Norton that a wrongful death claim brought by the husband of a nursing home resident was barred by the arbitration agreement signed by the patient.[1]  Before she was admitted to the defendant nursing home, Mrs. Norton, the patient, signed an arbitration agreement through Kim Norton, her general power of attorney, which expressly stated that it applied to claims brought for wrongful death.[2]  The court held that Mr. Norton’s claims for wrongful death was covered by the arbitration agreement.[3]  Below, the Georgia Court of Appeals had held that Mr. Norton’s wrongful death claim was not covered by the arbitration agreement.[4]  The court held that wrongful death claims “belong to the survivors” and are “not addressed to the injuries suffered by the decedent prior to death.”[5]  The Georgia Supreme Court reversed, holding that a wrongful death action is merely a continuation of whatever claims for injury the decedent would have had while she was living.[6]

The Iowa Supreme Court has reached the same conclusion as the Georgia Supreme Court on the issue of whether such wrongful death claims are covered by pre-dispute arbitration agreements signed with nursing homes.  However, in Roth v. Evangelical Lutheran Good Samaritan Society the Iowa Supreme Court provided a more thorough explanation as to which claims are or are not covered by an arbitration agreement signed by the decedent.[7]  In Roth, the court looked to the nature of the claims involved, explicitly distinguishing between wrongful death claims brought by a representative of the estate and loss of consortium claims brought by the adult children of the decedent.  The court in Roth held that the arbitration agreement signed by the decedent (through the decedent’s son who held general power of attorney for him) did cover wrongful death claims brought by his estate, but that the loss of consortium claims were not covered.[8]

The court in Roth reasoned that the statutes providing the basis for wrongful death claims do not create a new cause of action, but merely preserves the rights and claims the decedent would have had at the time of his death.[9]  Because the decedent agreed to arbitrate any claims he had relating to his stay at the defendant nursing facility, this agreement to arbitration applies to the claim for wrongful death brought on behalf of his estate.[10]

However, the court reasons that the claims for loss of consortium brought by the decedent’s adult children are not covered by the arbitration agreement signed by the decedent.[11] The court notes that although plaintiffs could be required to arbitrate loss of consortium claims if they had previously agreed to arbitration, because the plaintiffs here did not personally agree to arbitration, they cannot be compelled to arbitrate their claims.[12] The court in Roth distinguishes the arbitrability of claims based on whether the action is brought on behalf of the estate, or by a third party who was not a signatory to the arbitration agreement.

Endnotes:

[1] United Health Servs. of Ga. v. Norton, 2017 Ga. LEXIS 168.

[2] Norton, 2017 Ga. 168 at 1.

[3] Id. at 6.

[4] Norton v. United Health Services of Georgia, Inc., 336 Ga. App. 51, 54-55 (2016).

[5] Id. at 54 (quoting Pope v. Goodgame, 223 Ga. App. 672, 676 (6) (b) (478 SE2d 636) (1996)).

[6] Norton, 2017 Ga. 168 at 5-6.

[7] Roth v. Evangelical Lutheran Good Samaritan Soc’y, 886 N.W.2d 601 (Iowa 2016).

[8] Id.

[9] Roth, 886 N.W. 2d at 608.

[10] Id.

[11]Roth, 886 N.W. 2d at 613.

[12] Id.