Legislation was recently introduced into the Senate that end the ability for nursing home residents to waive their right to trials. Prior to admitting new patients, many nursing homes are having their clients sign arbitration agreements rather than allowing them to take their disputes to a court of law. The Fairness in Nursing Home Arbitration Act, introduced by Sens. Mel Martinez (R-FL) and Herb Kohl (D-WI), chairman of the Special Committee on Aging, would make arbitration agreements signed before a dispute arises unenforceable. The bill would still allow the parties to participate in arbitration after the dispute has arisen.
A Wall Street Journal article, “Nursing Homes, in Bid to Cut Costs, Prod Patients to Forgo Lawsuits” states that as more people have signed these arbitration agreements, the settlement costs when abuse and mismanaged care have increased. Many homes have made arbitration costs mandatory but some nursing homes claim that the clause reduces their overall cost of liability insurance when providing care. As more and more doctors complain about the high costs of medical malpractice insurance, they may want to consider standard arbitration as part of the terms of service.
The probability of the legislation passing in its current form is rather remote once the powerful business and medical lobby begin to address the issue.
For more information on the introduced legislation, click here.
For the Wall Street Journal Health Blog, click here.