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Bill Would End Nursing Home Practice of Mandatory Arbitration

Two U.S. senators have introduced legislation that would end the
practice of nursing home residents signing away their right to a trial
before any actual dispute with the facility has arisen.

Nursing homes are increasingly asking — or forcing —
patients and their families to sign arbitration agreements prior to
admission. By signing these agreements, patients or family members give
up their right to sue if they believe the nursing home was responsible
for injuries or the patient’s death. The Fairness in Nursing Home
Arbitration Act (S.2838), 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, although it would still permit the parties to agree to
arbitration after a dispute over care has arisen.

"When a family makes the difficult decision to help a loved
one enter a nursing home, among the primary considerations is quality
care. Forcing a family to choose between quality care and forgoing
their rights within the judicial system is unfair and beyond the scope
of the intent of arbitration laws," said Sen. Martinez. "This effort
restores the original intent and tells families that they don’t have to
sign away their rights in order to access quality care."

The increased use of arbitration agreements has been paying
off for the nursing home industry, according to a recent article in the
Wall Street Journal.
A study by Aon Global Risk Consulting projects that nursing homes’
average costs per claim will drop from about $226,000 for incidents
that took place in 1999 to about $146,000 for incidents that took place
in 2006.

Theresa Bourdon, one of the study’s authors and an Aon
managing director, says that out of more than 200 claims she looked at
that were subject to arbitration, none has yielded a
multimillion-dollar payout. "We are not seeing big pops," Ms. Bourdon

But as industry litigation costs have been dropping, claims of poor treatment are on the rise, the Wall Street Journal
reports. Meanwhile, patient advocates say that those seeking admission
to a nursing home are in no position to make a determination about
giving up their right to sue. Courts have sometimes struck down
arbitration agreements as unfair, but others have upheld them. In Ohio
last year, a court upheld an agreement signed by a woman who had
entered a home from a hospital and was suffering intermittent bouts of

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