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Federal agency prohibits nursing home arbitration agreements, P.2

In our previous post, we began looking at a new rule passed by the federal Department of Health and Human Services which prohibits nursing homes from requiring residents to sign arbitration agreements. The rule is aimed at addressing the fact that such agreements are often enforceable in court, even though residents may sign them at a time when they are desperate for long-term, full time care.

To be sure, Pennsylvania law does provide that arbitration agreements are valid, enforceable and irrevocable, on the same grounds as any other contract. In other words, nursing home arbitration agreements are treated as any other contract. This means that there must be both an “offer” and acceptance of the offer with mutual understanding about that which is being agreed upon. In addition, those entering into a contract must be of sound mind, or competent. This is precisely the point that many say gets overlooked in many arbitration agreements. 

In many cases, those signing arbitration agreements may not really understand what the agreement entails, what they are giving up with the agreement. In some cases, they may not have the presence of mind necessary to understand an arbitration agreement, yet end up signing it anyway. Unfortunately, courts have been reluctant to void such agreements. For nursing home residents who end up suffering harm at the hands of their caregivers, they are then limited to the arbitration process.

In itself, arbitration is not a corrupt process, any more than the court system is corrupt. The integrity of the process depends upon the qualifications and character of the arbitrator, and so it is important for those who are bound by an arbitration agreement to work with an experienced arbitrator who will handle their case fairly and carefully, with respect for the rights of all parties.

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