Fairfax Circuit Court Invalidates Mandatory Arbitration Provision In Nursing Home Admission Agreement

Case: Estate of Harry L. Irle v. Beverly Enterprises Virginia, Inc d/b/a Golden Living Center, Sleepy Hollow, Law No. 2018-11276

by Jeffrey J. Downey, attorney serving Virginia, MD & DC

On August 2, 2019, Judge Azcarate of the Fairfax Circuit Court held that Sleepy Hollow’s jury trial waiver was invalid because it was not executed by the lawful power of attorney.  The case highlights some important issues involving recent attempts by nursing homes to have their residents waive their legal rights to a jury trial, should they be neglected or abused.  Please find the Court’s ruling and Plaintiff’s brief in opposition to Defendant’s Motion.

Nursing home neglect and abuse is at an all time high in the United States.  Rather than improve conditions, nursing homes, especially the large chains, are having their patients waive their rights as a condition of admission.  Most people who enter nursing homes sign a large amount of admission paperwork without ever reading it.  In the case involving Harry Lee Irle, who died from a pressure wound, Mr. Irle’s son signed the paperwork three days after his father had already been admitted to the facility.  The son didn’t read the waiver, but fortunately for the family, he was also not the power of attorney at the time.  Judge Azcarate ruled that the family could proceed with the wrongful death suit.

Nursing home admission agreements often contain provisions that waive a patient’s right to file a civil case in court if the patient is subject to neglect, abuse or even wrongful death.  Referred to as mandatory arbitration agreements, these waivers force Plaintiffs into unfriendly legal forums, typically arbitrations through some corporate friendly arbitration service. The Obama Administration had promulgated regulations to prohibit that practice, but they were not implemented by the Trump administration.  The Trump administration scaled back the use of fines against nursing homes in 2017, including fines against facilities that put their residents in grave risk of harm.

These fines were not a significant deterrent in the first place, explains Jeffrey J. Downey, a nursing home abuse attorney.  Records show that the average fine dropped to only $28,000 under the Trump administration, down from $41,000 under the Obama administration. Most nursing homes are inspected annually unless a report is made to that state’s health department by a resident or family member. This means oversight is lax, providing opportunities for some facilities to cut staffing, leading to the neglect of residents.  The Trump administration also switched from fining nursing homes for each day they were out of compliance – as the Obama administration did – to issuing a single fine for two-thirds of infractions.

When the Trump administration took office, it responded to industry complaints about over-zealous regulatory oversight. Facilities were granted an 18- month moratorium from being penalized for violating eight new health and safety rules.  Around the same it, it also revoked an Obama-era regulation barring facilities from pre-emptively require residents to submit to binding arbitration.

On average, fines under the Trump administration were below $9,000. “These are multimillion-dollar businesses — $9,000 is nothing,” says Toby Edelman, a senior policy attorney from the Center for Medicare Advocacy, a nonprofit in Washington told Jordan Rau, a reporter with Kaiser Health News.   The Centers for Medicare and Medicaid Services told inspectors in June 2019 that they were no longer required to fine facilities unless immediate-jeopardy violations resulted in “serious injury, harm, impairment or death.”

Nursing homes are getting so emboldened, they are not even responding to patient record requests anymore, explains Downey.  In one case, I recently had to file suit just to get the records.  The large nursing home chains have some of the worse track records in terms of regulatory compliance.  In the Obama administration we saw these same chains get prosecuted for Medicare fraud.  Under the Trump administration, they are being given a pass to neglect patients, while forcing them to waiver their civil rights.  Patients being admitted to any healthcare facility need to read their admission paperwork carefully and cross out any mandatory arbitration provisions.  Most facilities will not deny you admission if you decline to waive your rights.