Arbitration  Agreements In Nursing Home Contracts
By Susan Dishler Shubin

Following a national trend, Maryland’s nursing facilities have recently begun requesting that residents and their family members sign an arbitration agreement that would waive their right to a trial before a judge or jury. They usually send the arbitration agreement with a cover letter including such language as “…the runaway cost of litigation has made it more and more difficult to provide the level of care that your loved one deserves,” tying the request to sign to the facility’s ability to provide quality care. The facilities are asking this of both new and current residents.

On January 9, 2003, Centers for Medicare and Medicaid Services (CMS) provided a memorandum to State Survey Agency Directors (In Maryland, the Office of Health Care Quality, or OHCQ). CMS’s position regarding binding arbitration is that it is between nursing homes and prospective or current residents and that their primary focus should be on the quality of care actually received by the resident. Under Medicare, they conclude that whether to have a binding arbitration agreement or not is an issue between the resident and the nursing home. Under Medicaid, they defer to state law. However, there are mandated as well as forbidden actions for facilities in this area. A nursing home may not discharge a resident or retaliate due to his/her failure to sign or comply with a binding arbitration agreement. Clearly, a current resident is not obligated to sign a new admission agreement that contains binding arbitration. Despite the existence of a binding arbitration agreement, the State survey agency (OHCQ) or CMS may issue citations for violations of requirements, including Quality of Care.

Advocates for nursing home residents strongly counsel residents and families not to sign these agreements. One cannot predict how the course of nursing home care will progress. There could be unfortunate results and one would not want to be bound to something signed when circumstances were different. Further, should a lawsuit be necessary, arbitration or mediation could always be suggested at that time.

If a family member or resident is considering signing this agreement, an attorney should make sure that it is clear who pays the cost of the arbitrators. Further, it should be made clear to clients that signing does not preclude other complaints open to them, such as a complaint to the Office of Health Care Quality.

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Publications : Bar Bulletin: May, 2003