Arbitration Agreements – Overcoming the challenges

Angie Szumlinski
|
June 7, 2012

Guest blogger: Joanna Castro, LNHA, RN, Risk Manager

How many of you have heard of AAA? No, I don’t mean the American Automobile Association. I mean the American Arbitration Association www.adr.org. Our industry tried in the past to implement Arbitration Agreements but was confronted with multiple challenges which lead many organizations to abandon the effort. Now the effort is being put forth again by litigation experts and liability carriers. Why? Because claims have been and will continue to be costly, labor intensive, and emotional.

Recently some changes have been proposed that are intended to assist a facility with the previous challenges. The following summarizes those challenges and some changes to consider:

1. Use a Separate Arbitration Agreement. In the past, organizations had the agreements contained in the admission contract. The recent proposal states that the agreement should be signed at the time of admission but should be a separate document written in plain and simple language with its own signature page indicating acceptance or rejection of the agreement.

2. Staff Training is Essential. In the past, the staff responsible for the signing of the agreement were not properly trained on the agreement’s purpose, use, and those frequently asked questions that a resident or DPOA might have therefore the agreements were challenged as not being an informed consent versus “I signed because they told to do it.” Recent proposals clearly state that any staff member who might participate in the signing of the agreement should be fully trained and there should be simple and clear informational tools given to residents and/or the DPOAs to fully educate them as to what they are signing. Your facility’s policy should clearly identify those positions that have the authority to sign/witness the Arbitration Agreement.

3. Comply with State and Federal Laws. In the past, it was often not clear that Arbitration Agreements could be rescinded depending on your state’s laws. Recent proposals clearly state that this fact should be in the document and/or clearly explained to the signer. These agreements must also be voluntary and not a condition of admission to the facility.

4. Be Fair and Balanced. These agreements must be fair and balanced meaning that the agreement goes both ways. Any issue between the facility and the resident must be settled through arbitration. For example, a collection issue that the facility has must be settled through arbitration just as a resident care issue would be settled through arbitration. Also, some Arbitration Agreements grant the resident additional benefits such as, choosing the location of the arbitration proceeding and committing the facility to pay some or all of the resident’s arbitration fees, in order to further show fairness and good faith.

5. Be Careful. Even the best intended provisions can have unintended consequences. In the past, a facility has tried to name a specific arbitrator in their agreements. Even though the intent was to make the arbitration process more efficient, such provisions may create the appearance of one-sidedness, may delay or make the agreement unenforceable. There are lots of qualified independent arbitrators, but the safest route is to suggest in the agreement the use of a member of the American Arbitration Association.

These comments are not intended as legal advice and cover just a few of the many challenges in the area of arbitration. Talk with your corporate office and/or your corporate attorney for guidance. Recently your Risk Consultant might have asked you about your use or knowledge of Arbitration Agreements; we are always looking for ways to ease the burden of liability. If you would like more information, contact your Risk Consultant or talk with your corporate attorney.

About the Author:

Joanna Castro has over 30 years of experience in healthcare. The last 16 years have been focused on administration and clinical operations in LTC. Currently consults with attorneys as a legal nurse consultant and expert witness when needed. Ms. Castro is a member of ACHCA and AALNC.


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