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Nursing homes in Illinois can ask residents to sign an arbitration agreement so long as it is drafted in compliance with general Illinois contract law. Although the Illinois Nursing Home Care Act nullfieid any waiver given by a resident that bars his right to litigation, a 2012 Illinois Supreme Court decision invalidated this provision. In short, the provision voided mandatory arbitration clauses. But the Court invalidated the anti-waiver provision of the Act in favor of the Federal Arbitration Act (FAA), which deems mandatory arbitration clauses valid, irrevocable, and for the most part, enforceable.

In 1979 lawmakers passed the primary regulatory scheme regarding the operation of nursing homes.  The Illinois Nursing Home Care Act was enacted “amid concern over reports of inadequate, improper and degrading treatment of patients in nursing homes.”  The Act gives the Illinois Department of Public Health (IDPH) the authority to regulate the standard of care given in long-term care facilities and provides civil and criminal penalties for violations of these regulations. Among other things, the Act prohibits conduct such as neglect by employees who fail to provide adequate patient care or maintenance resulting in mental or physical injury to a resident.

Effects of a Mandatory Arbitration Clause on Nursing Home Residents

Experts cited by the Washington Post allege that the amount of damages awarded, if any, has the potential to be less if the case is heard by an arbitrator as opposed to going to trial. In addition to hiring a lawyer, the patient or his family generally has to pay its share of the arbitrator’s fees and compensation. Only the parties are bound by the terms of the contract so wrongful death claims brought on behalf of a resident’s next of kin are not bound by the arbitration agreement.

However, claims are typically resolved more quickly through arbitration than through litigation so attorney costs are lower and residents can retain a larger portion of any financial settlement. Arbitration typically offers more flexible scheduling in an environment that many find more comfortable than a court room.

Know what you’re signing

The Health Care Arbitration Act requires certain provisions be included in arbitration agreements to make the information more conspicuous to signatories.  Every health care arbitration agreement must include a clear caption that labels the document as a “Health Care Arbitration Agreement,” a caption above the signature line that says, ”AGREEMENT TO ARBITRATE HEALTH CARE NEGLIGENCE CLAIMS  NOTICE TO PATIENT,” and an explanatory paragraph that lays out the resident’s rights under the arbitration clause. Illinois courts generally will not enforce an arbitration provision that is so difficult to find or read that a lay person would not reasonably be aware of it.

Additionally, Illinois contract law requires that a person must possess sufficient mental capacity in order to execute a contract.  This issue arises quite often in a nursing home setting where a resident may have a mental impairment such as Alzheimer’s or dementia.  A resident or family member who does not feel confident that he or she has a firm understanding of what rights they are giving up when signing any contract should seek the advice of an attorney.

Proposed Common Legislation

In the State of Illinois, signing an arbitration agreement is not required in order to receive treatment and many attorneys recommend that residents refrain from signing these to leave their options open if they ever have to file a suit against the nursing home.  However, not all states have such legislation.

In late 2015, Virginia Cole checked her husband Dean Cole into a Minnesota nursing home after his health deteriorated to the point where she could no longer manage him at home.  Upon admitting her husband, Mrs. Cole signed a stack of papers full of legal jargon, one of which was a required arbitration agreement.  Just one month later, Dean Cole died of dehydration.  Rather than taking the nursing home to court, Virginia Cole had to take the claim to an arbitrator who did find in her favor but after paying three arbitrators, several expert witnesses and attorney’s fees, she was left with less than $20,000 for the death of her husband.

The Centers for Medicare & Medicaid Services have proposed a Reform of Requirements for Long-Term Care Facilities that would require nursing homes to explain arbitration agreements to those signing them and would prohibit these facilities from making assent to arbitration agreements a condition of admission. Several U.S. Senators, 15 attorney generals, and dozens of organizations argue that when it comes to protecting our vulnerable elderly the proposed reform is not enough.  They are calling for a ban on pre-dispute arbitration agreements entirely.