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Arbitration Agreements Giving Away Nursing Home Residents’ Constitutional Rights to a Jury Trial in Tennessee Are No Longer Legal

Imagine your mother is ill and you can no longer provider her around-the-clock care.  You get together with your family and you go through a difficult and lengthy process to select the best long term care facility for her.  You find a nursing home that seems to meet your mother’s needs.  You sign the paperwork with relief, trusting that your mother will be taken care of at the facility.   The last thing on your mind is the thought of suing the nursing home.

Unfortunately, the nursing home has been focusing on a possible lawsuit, not the care.  Most admissions paperwork will have an arbitration agreement buried inside it.  So, in most cases, the nursing home has already assumed you will sue them and they have made the decision to put their bottom line ahead of your mother’s care.  The nursing home also breathed a sigh of relief when you signed the admissions paperwork because when you signed your mother into the nursing home, you just signed an arbitration agreement.

Traditionally, arbitration agreements in have been a regular feature in nursing home contracts for quite a while now in Tennessee.  The trend in Tennessee had been to increasingly find these contracts to be legal and enforceable.  Arbitration agreements in contracts are favored in Tennessee both by statute and existing case law, which can be found at Benton v. Vanderbilt. The Tennessee Legislature enacted the Uniform Arbitration Act, which embraced a legislative policy favoring enforcement of arbitration agreements, which is discussed in Buraczynski v. Eyring. Further, Tennessee law states that “a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable save upon such grounds as exist at law or in equity for the revocation of any contract . . .”

In other words, that admission paperwork you barely read before you signed also included an arbitration agreement, which is an enforceable contract that the Tennessee courts will enforce.  As a result, any situation that arises with your mother, whether it is a contract dispute, fee dispute, or poor care, will all be sent to arbitration based on the terms and conditions set by the nursing home.  The terms of engagement would be set and they would solely favor the nursing home.   These trends in the law resulted in a noticeable explosion of long term care facilities implementing these arbitration agreements.  The result has been to place a lock on the door to the courthouse because of these one sided contracts, leaving families with little recourse when negligent conduct does happen.

All of this has recently changed.  The Department of Health and Human Services has recently promulgated regulations that will prohibit long term care facilities from enacting these arbitration clauses.   The language is clear, stating that “We are requiring that facilities must not enter into an agreement for binding arbitration with a resident or their representative until after a dispute arises between the parties…”  The change in law occurs on November 28, 2016 and does not affect arbitration agreements that have already been signed.

It is anticipated that long term care facilities will challenge the new regulations from the Department of Health and Human Services on a variety of grounds, but with a particular focus on preemption laws.  It is also anticipated that long term care facilities will continue to sneak in these unfair and one sided contract arrangements, but they have now become much harder to enforce.  The fight is not yet over, but this is unqualified good news for people looking to help their older family member.

Let’s go back to the original example of looking for a facility for your mother.  Due to this regulation change, you can now breathe a sigh of relief and there is no catch to it anymore.  The focus can now actually be on your mother’s well being, not on the nursing home’s intent to prioritize their profits over her care.