By Jeffrey J. Downey
Serving clients in Virginia, Maryland and the District of Columbia.
Address: 8270 Greensboro Drive, Suite 810, McLean, VA, 22101
When you are injured by a healthcare provider, you have the right to bring a civil claim to recovery for the harm or injuries that were caused by another’s negligence. However, that right is being curtained for elders entering nursing homes by the practice of requiring patients to sign mandatory arbitration agreements, which waive a person’s right to bring a civil claim in Court.
The Federal Arbitration Act (FAA), which dates back to 1925, has been used as tool to expand corporate interests and restrict rights of consumers. Arbitration agreements typically require the Plaintiff to file in an unfriendly forum, like the American Arbitration Association, which charges significant hourly fees to arbitrate a case.
The Obama Administration had put in place a regulation that prohibited nursing homes from using mandatory arbitration provisions where a facility received federal funding. The Obama Administration also aggressively prosecuted nursing homes for engaging in Medicare fraud. The Trump administration has done an about face, withdrawing the regulatory change that prohibited mandatory arbitration provisions in admission agreements. Despite claiming to be tuff of fraud, the Trump administration also has an abysmal track record when it comes to prosecuting nursing homes for Medicare fraud. In fact, the Trump Justice Department voluntarily dismissed a significant fraud case against ManorCare, alleging hundreds of millions of dollars in Medicare fraud, shortly after Attorney General Sessions took over the helm of the Justice Department.
Various Courts had struck down these mandatory arbitration provisions as improper. But in 2017, the U.S. Supreme Court, in Kindred Nursing Centers v. Clark 137 S.Ct 1421 (2017) upheld a mandatory arbitration provision after it was struck down by the Kentucky Supreme Court.
At issue in Kindred was the question of the patient’s Power of Attorney and whether the POA had authority to waive the patient’s rights. Justice Kagan noted that it was established law that the FAA applies to all arbitration agreements and that such agreements are “on equal footing with all other contracts.”5 The Court held that the singling out of arbitration agreements and requiring that a power of attorney must “clearly state” that the representative has the power to enter into an arbitration agreement violates the FAA, which provides that federal policy supports arbitration as the preferred means of dispute resolution in the United States. The FAA makes arbitration agreements “valid, irrevocable, and enforceable.” However, arbitration agreements are subject to invalidity based upon the general rules of contract law. Section 2 of the FAA provides an equal-treatment principle in which courts may invalidate arbitration clauses or agreements based on “generally applicable contract defenses.”6 However, state laws may not develop specific rules that regulate the enforceability of arbitration agreements.
While the Supreme Court upheld a mandatory arbitration provision in Clark, that ruling was limited to the facts of that case. Many states, including Virginia, allow a party to opt out of a mandatory arbitration under certain time constraints.
For elders entering a nursing home or assisted living facility, its always a good idea to read the admission agreement closely and cross out the mandatory arbitration provision. Most facilities are not going to deny you admission because you protected your legal rights.
If you or a loved one have suffered from neglect based on the conduct of a nursing home or long term care facility, contact the Law Office of Jeffrey J. Downey for a free consultation.
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