Mediation, Binding and None Binding-Arbitration Clauses in Nursing Home Admission Forms: What You Need to Know

Too many people tend to confuse “mediation” with “arbitration.” Although both of these methods provide an alternative to having a judge decide the outcome of a dispute, it is important to be knowledgeable about their dissimilarities, especially before signing a nursing home admission form. Therefore, you will find below, for your convenience, a synopsis of their key differences.

1). Mediation and Arbitration: Back to the basics

Mediation is a voluntary process in which a neutral person, the mediator, facilitates communication between the disputants and assists them in reaching a mutually acceptable agreement. The mediator is not the decision-maker. His/ her role is to help the parties “design” their own conflict resolution. Moreover, the parties are free to go to court if the dispute is not resolved in mediation.

Arbitration is a way of resolving disputes in which an arbitrator will hear the case and will make the final decision. The parties can agree that the decision is “non-binding”, which means that they can then go to court for a judge to decide the case.

The parties can also agree that the arbitrator's decision is “binding” on the parties. If this is the case, it means that the parties cannot file for an appeal and/or use the state’s court system to oppose the mediator's decision.

2). The nursing home admission process and the potential dangers of the binding arbitration clause in the admission form

When someone applies to be admitted to a nursing home, the person is asked to sign an admission agreement. In that admission form, there might be a binding arbitration provision that says that the person is giving up his/her constitutional right to have the issue resolved in a court of law by a judge or jury and instead is agreeing to have an arbitrator decide for the outcome of any dispute that may arise in the future.

For the record, the most common “disputes” that arise in nursing homes are as follows:

Developing bedsores as the result of neglect;

Injuries that result from neglect like falls and broken bones;

Theft of personal property;

Receiving the wrong medication;

Being physically assaulted by other residents;

Suffocation on bed rails;

Malnutrition;

Severe burns;

Gangrene.

Therefore, as mentioned above, if per the terms of the admission form, the arbitrator's decision is binding, the parties cannot go to court or appeal the arbitrators ruling, even if the decision is a bad one and will directly impact the health and well-being of a resident.

In the same vein, conceptually meaning in a way that pertains to concepts, ideas, theories, mental constructs, or models one cannot avoid wondering what would happen when the nursing home’ contract also allows the nursing home to select the arbitrator. Because the arbitrators only make money if they are selected as an arbitrator there may be a risk that some arbitrators might be under pressure to rule favorably for the nursing home instead of ruling favorably for the patient, in fear that the nursing home will not use their services again.

3). The private character of binding arbitration decisions

When a dispute will be dealt with in arbitration, there will be no court ruling or reporting available to the public. As a result, some nursing homes that are poorly operated may have multiple claims against them and since there is no court filing, there is no way other affected people would know about these claims and/or the final rulings in them.

In other words, arbitration allows poorly run nursing homes to escape the negative impact on their reputation. Someone looking for a nursing home would not be aware of the many claims of neglect or abuse that had ended in arbitration because this information is not readily available to the general public.

4). What can you do to avoid being subject to binding arbitration?

Below are some of the most common courses of action that come to mind to challenge an arbitration binding clause:

Negotiate the terms of the arbitration clause with the other party. They might be open to modifying or removing the binding arbitration clause to accommodate your concerns and get your business;

When you sign a durable power of attorney authorizing someone to act on your behalf, include a provision that your agent is not authorized to agree to binding arbitration;

Check with an attorney if there might be certain legal grounds on which you could challenge or invalidate the binding arbitration clause such as unconscionability (the clause being unfair or one-sided);

Incorporate a waiver: Some jurisdictions allow parties to waive their right to arbitration even if there's an arbitration clause. However, this might vary depending on local laws and the terms of the contract.

Generally speaking, whenever you sign an agreement that contains an arbitration clause, be sure to read it carefully. This is particularly true when signing an admission agreement for a nursing home. Your consent to arbitrate any dispute that may arise with the nursing home may leave you in a system that is slanted towards the nursing home with no rights of appeal or recourse.

Lastly, also bear in mind that while it may seem that binding arbitration would be a fast and inexpensive way to resolve a nursing home dispute, case studies have shown that nursing home claims subject to arbitration settle for 7% less than claims resolved without arbitration according to a survey conducted by Aon Rick Solutions a few years ago.