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Beware of Binding Arbitration in Pennsylvania Nursing Home Contracts

When residents enter nursing homes, they are almost always asked to sign contracts. These contracts specify all of the obligations the home has to the resident and his or her family, as well as the family’s obligation to the home. Our Philadelphia nursing home negligence attorneys recommend reading any contract carefully, of course. But in particular, we advise families to watch nursing home contracts carefully for a provision requiring something called binding arbitration. Binding arbitration removes families’ ability to sue in the event of any abuse, neglect or other wrongdoing at the home.

Binding arbitration is essentially private judging. Rather than going to a courthouse and explaining your case to a jury and judge, you and the nursing home would hire a private arbitrator (sometimes a retired judge) to hear the case and make a decision. Companies say it’s faster than going to court, and sometimes cheaper. However, binding arbitration has come under criticism in the past few years after statistics showed that arbitrators decide in favor of the companies in an unusually high proportion of cases. Overwhelmingly, the companies are also the ones that pay the arbitrators’ bills. The resulting public outcry has led to two bills in Congress to ban the practice — including one that applies specifically to nursing homes.

In nursing homes, there are two major problems with binding arbitration. At worst, families’ cases are decided by someone who was bought and paid for by the nursing home company. Because their contracts specify that the arbitrator’s decision is final, families can rarely appeal to a state court. This denies justice in that one case. However, there’s also a larger problem of “moral hazard.” Binding arbitration with a friendly arbitrator allows nursing home companies to escape accountability for their actions. In essence, that means nursing homes have no incentive to cover up unsafe and illegal conditions — placing more residents at risk.

Consumers often don’t realize binding arbitration is buried in contracts until after they sign. Some states have thrown these contracts out of court, but Pennsylvania is not currently one of them. That means Pennsylvania families should look for binding arbitration clauses anytime they’re ready to place a loved one in a nursing home. If they find one and prefer not to agree to it, they can and should ask the nursing home to change or remove it. Families who have already signed a binding arbitration contract should not give up, however. You can and should have a Philadelphia nursing home abuse attorney represent you in arbitration hearings, as well as in any court case necessary to fight the arbitration clause.

Rosenbaum & Associates represents families throughout Pennsylvania that have lost a loved one or suffered preventable harm because of negligence at a nursing home. For a free consultation with an experienced attorney, please call us at 1-800-7-LEGAL-7 or send us a message online.

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