The Feds forbid mandatory arbitration in nursing home contracts

[MillCreek]

http://www.nytimes.com/2016/09/29/business/dealbook/arbitration-nursing-homes-elder-abuse-harassment-claims.html?partner=rss&emc=rss&_r=0

This is a dramatic change in the way nursing homes handle the business of liability claims and risk management.  For years, nursing homes have insisted on mandatory arbitration clauses as a prerequisite for admission to the facility.  This will now allow residents and families the possibility of having their day in court for wrong-doing by the nursing home.  I predict that the cost of liability insurance for nursing homes will be going up.

[bedlamite]

I predict that the cost of liability insurance for nursing homes will be going up.

Right along with that will be the cost of nursing homes.

[De Selby]

Right along with that will be the cost of nursing homes.

They will cost more because you'll have to pay them to ensure proper care or pay something closer to the full cost if they don't  - seems a worthy trade off.

It's good to see at least a tacit understanding of what arbitration in consumer contracts  is - mostly a scam to avoid paying the full damages of wrongdoing.

[Hawkmoon]

They will cost more because you'll have to pay them to ensure proper care or pay something closer to the full cost if they don't  - seems a worthy trade off.

It's good to see at least a tacit understanding of what arbitration in consumer contracts  is - mostly a scam to avoid paying the full damages of wrongdoing.

Agreed.

Two-plus years ago I was discharged from the hospital to a nursing home/rehab center after my heart operation because I was in no shape to care for myself at home and the hospital didn't want me any more. I was also in no condition to read several pages of legalese, so I just signed the papers they handed me when I arrived.

Three days later, after some of the worst food and non-existant "care" imaginable, including thie doctor whom I never saw overriding my cardiologist's orders and changing my medications, I had my doctor sign me out and send me home. I still wasn't in any shape to take care of myself, but I could at least be uncared for in the comfort and quiet of my own home. It also gave me an opportunity to read those papers I had signed at admission. Basically, I had zero recourse regarding the horrible care I had received. If they had killed me, my daughter would likewise have had no recourse.

[K Frame]

Mom just did a 3-week stint in a rehab facility. I was overall impressed with the job that they did with her, and Mom, now that her memory is getting worse and worse, can be quite a handful.

I have no idea, though, what any of the papers said because I never saw them. My brother took care of them, and I'd suspect that he never really read them, either.

[lupinus]

Such facilities vary WILDLY in my experience. Some are great, some you couldn't pay me to stay in.


Sent from my iPhone. Freaking autocorrect.

[MillCreek]

When I was doing risk management with the very large multi-state Catholic healthcare chain, they owned several skilled nursing and rehab facilities.  I thought they were pretty good and they generally received good marks from the Feds and the states.  It made me think about if I ever need one, to look at a facility owned by a religious group.

[RevDisk]

Such facilities vary WILDLY in my experience. Some are great, some you couldn't pay me to stay in.

This. Quality incredibly varies across facilities.

I'm not shocked at the arbitration clauses, because they're standard on any corporate contract that remotely allows it. Because it's generally significantly advantageous to the corporation for many reasons. Get a biased arbitrator who gets most of his caseload from a particular company? Good luck suing them. Magic term is "arbitral immunity", Sathianathan v. Pacific Exchange, Inc. Literally the only recourse is a three months window to file a petition to vacate the arbitration. So even if you get photos and bank statements 31 days after a corrupt arbitrator ruled against you, you can't sue said arbitrator. You can try to file the information with the state arbitration board, or sue the other party that did the bribing, but other than that, lol.

That said, arbitration is generally far cheaper. Assuming both parties are honest, it seems like a superior choice. Fast, efficient and cheap. Reality is, if both sides were honest and sane, it'd be hammered out in an out of court settlement.

[KD5NRH]

Such facilities vary WILDLY in my experience. Some are great, some you couldn't pay me to stay in.

When I was doing pest control sales, we had some really nice facilities as clients, and some where the roaches just needed to see that there was a way out and they'd leave on their own.

[lee n. field]

http://www.nytimes.com/2016/09/29/business/dealbook/arbitration-nursing-homes-elder-abuse-harassment-claims.html?partner=rss&emc=rss&_r=0

This is a dramatic change in the way nursing homes handle the business of liability claims and risk management.  For years, nursing homes have insisted on mandatory arbitration clauses as a prerequisite for admission to the facility.  This will now allow residents and families the possibility of having their day in court for wrong-doing by the nursing home.  I predict that the cost of liability insurance for nursing homes will be going up.

A friend of mine is in a long term rehab type facility, kind of indefinitely.  When she went in she had to sign off on stuff that she was not particularly happy about.  And she's made herself a pest while she's there.  I'll run this by her.

[Fly320s]

How does this new law help?

Why should the gov be allowed to dictate the contract between parties?

[RoadKingLarry]

This. Quality incredibly varies across facilities.

I'm not shocked at the arbitration clauses, because they're standard on any corporate contract that remotely allows it. Because it's generally significantly advantageous to the corporation for many reasons. Get a biased arbitrator who gets most of his caseload from a particular company? Good luck suing them. Magic term is "arbitral immunity", Sathianathan v. Pacific Exchange, Inc. Literally the only recourse is a three months window to file a petition to vacate the arbitration. So even if you get photos and bank statements 31 days after a corrupt arbitrator ruled against you, you can't sue said arbitrator. You can try to file the information with the state arbitration board, or sue the other party that did the bribing, but other than that, lol.

That said, arbitration is generally far cheaper. Assuming both parties are honest, it seems like a superior choice. Fast, efficient and cheap. Reality is, if both sides were honest and sane, it'd be hammered out in an out of court settlement.

In the end, there is always the recourse of last resort.

[De Selby]

How does this new law help?

Why should the gov be allowed to dictate the contract between parties?

The government isn't dictating the contract, it's preventing one party from avoiding legal review of the contract.

That's what courts do and why they're public - resolve disputes between people.  This new law means you can't rig the outcome of alleged breaches of contract.

[De Selby]

This. Quality incredibly varies across facilities.

I'm not shocked at the arbitration clauses, because they're standard on any corporate contract that remotely allows it. Because it's generally significantly advantageous to the corporation for many reasons. Get a biased arbitrator who gets most of his caseload from a particular company? Good luck suing them. Magic term is "arbitral immunity", Sathianathan v. Pacific Exchange, Inc. Literally the only recourse is a three months window to file a petition to vacate the arbitration. So even if you get photos and bank statements 31 days after a corrupt arbitrator ruled against you, you can't sue said arbitrator. You can try to file the information with the state arbitration board, or sue the other party that did the bribing, but other than that, lol.

That said, arbitration is generally far cheaper. Assuming both parties are honest, it seems like a superior choice. Fast, efficient and cheap. Reality is, if both sides were honest and sane, it'd be hammered out in an out of court settlement.

Out of court settlements, like arbitration agreements, are possible only because outcomes are largely predictable.  Litigation in contracts is only very rarely decided by a court.

Arbitration is only faster and cheaper because for the most part, binding arbitration means one party's efforts at achieving more than the initial offer are going to be fruitless and the party knows it.  So the losing side (read - weaker bargaining position in the initial transaction) doesn't invest much in seeking compensation, restitution, or expectation damages.

It is extremely difficult to overturn a binding arbitration outcome.  Immunity of the arbitrator is the smallest part of the problem.

[Fly320s]

The government isn't dictating the contract, it's preventing one party from avoiding legal review of the contract.

From the article:

An agency within the Health and Human Services Department on Wednesday 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.
The rule, which would affect nursing homes with 1.5 million residents, promises to deliver major new protections.
Clauses embedded in the fine print of nursing home admissions contracts have pushed disputes about safety and the quality of care out of public view.

That sounds to me like FedGov is prohibiting certain nursing homes from writing "arbitration" into the contract.  I was going to get in a tizzy about it, but since those businesses are taking federal funding, I don't see a problem.

[RevDisk]

Ayep. You take the King's shilling, you are the king's man.