In 2021, The 8th U.S. Circuit Court of Appeals gave the green light to a federal regulation that allows nursing homes to use arbitration agreements with residents, but prevents them from making the agreements a prerequisite for admission. Several nursing homes had filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS) challenging the new regulation. However, the court upheld the regulation, stating in its opinion that,
“In our view, it is reasonable for CMS to conclude that regulating the use of arbitration agreements in LTC facilities furthers the health, safety, and well-being of residents, particularly during the critical stage when a resident is first admitted to a facility,”
A recent case in Pennsylvania ruled that a nursing home’s arbitration agreement requiring a resident, “Fay V.” to pay half the costs of arbitration was “unconscionable.” Kohlman v. Grane Healthcare Company (Pa. Super 118, J-A25034-21, July 5, 2022). The ruling arose after the estate for Ms. V., who died three months after admission, filed a wrongful death lawsuit against the nursing home and other defendants.
According to the court transcripts, at the time of her admission, Fay V. was 67 years old and was suffering from a number of conditions, including congestive heart failure, diabetes, and pressure ulcers. The nursing home’s assessment of her condition at the time of her admission reported that “she was alert and oriented and had no memory problems or dementia, but that she was also suffering from anxiety and sometimes had trouble concentrating.”
It’s assessment also reported that ‘Fay’s vision was impaired to the point that even with glasses, she was ‘not able to see newspaper headlines but can identify objects.’ Yet upon her admission to Highland Park, she signed a number of documents, including a seven-page Nursing Services Agreement, a two-page Agreement to Arbitrate Disputes (the Arbitration Agreement), and a Resident Representative Agreement concerning the handling of her finances, in which Decedent designated herself as her representative.
In trial court, the court ruled the Arbitration Agreement as unconscionable (excessively unreasonable) because Decedent was in pain and was medicated at the time that she signed the Arbitration Agreement, Decedent was alone when she was asked to sign the Arbitration Agreement, had no opportunity to read the Arbitration Agreement and was not given a copy to review, and the provisions of the Arbitration Agreement were not fully read or explained to Decedent.