This blog focuses on the law in Pennsylvania and West Virginia (and other practical issues that arise) when a family member or friend is unfortunately lost due to an accidental death.
Federal Judge Grants Injunction as to CMS Rule Barring Pre-Dispute Arbitration Clauses in Long-Term Care Facility / Nursing Home Contracts for Facilities Receiving Federal Funding
I previously reported in a post that on September 28, 2016, the Centers for Medicare and Medicaid Services (“CMS”), which is part of the U.S. Department of Health and Human Services, announced that it issued a final rule prohibiting the use of pre-dispute binding arbitration agreements with regard to long-term care facilities / nursing homes that receive federal funding from Medicare and Medicaid. Not long after CMS announced the final rule, the American Health Care Association, which is an association for long-term care providers, and other plaintiffs filed a motion in the United States District Court for the Northern District of Mississippi seeking a preliminary injunction to enjoin CMS from enforcing the final rule. See American Health Care Association et al. v. Sylvia Mathews Burwell, in her official capacity as Secretary of Health and Human Services et al., Civil Action No. 3:16-cv-00233, U.S. District Court for the N.D. Miss.
On November 7, 2016, District Judge Michael P. Mills of the United States District Court for the Northern District of Mississippi granted the motion for preliminary injunction in favor of the plaintiffs. This was a win for long-tem care facility and nursing homes, as the final rule regarding arbitration provisions did not go into effect on November 28, 2016. Although Judge Mills stated that CMS’s final rule was based on sound public policy, he ultimately found that the plaintiffs had made a sufficient showing that CMS did not have the authority to enact the final rule. One of the factors Judge Mills had to consider in granting the preliminary injunction was whether there existed a substantial likelihood of success on the merits. Judge Mills found that to be the case.
Despite the ruling, the parties will continue to litigate the issue of whether CMS had the authority to enter the rule, although the federal government will have an uphill battle.
On December 5, 2016, a Case Management Order was entered setting a schedule for the filing of pleadings in the case. Oral argument is also scheduled for July 20, 2017 before Judge Mills.
Thus, you should expect to continue to see pre-dispute arbitration agreements in the admission documents for long-term care facilities / nursing homes.
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CMS Issues Rule Barring Pre-Dispute Arbitration Clauses in Long-Term Care Facility / Nursing Home Contracts for Facilities Receiving Federal Funding
An elderly loved one needs to be immediately admitted to a nursing home / long-term care facility. In a rush and happy that a bed is found, you or the elderly person frantically rush through and sign the admission paperwork, including a contract. A few days, months, or years later the elderly person is injured because of the nursing home’s negligence. An attorney is retained to represent the injured person and files a lawsuit in state or federal court. Immediately after filing the Complaint, defense counsel for the nursing home responds that you do not have the right to maintain the lawsuit in state or federal court and have a jury decide whether the nursing home was negligent and thereby caused damages. The reason: hidden in those documents that were signed upon admission to the nursing home existed a pre-dispute arbitration clause. In other words, you or the elderly person agreed to give up the right to have a jury hear the claims. Instead, the claim of negligence and damages will be heard by a lawyer or group of lawyers outside of state or federal court.
To prevent this from happening in the future, on September 28, 2016, the Centers for Medicare and Medicaid Services (“CMS”), which is part of the U.S. Department of Health and Human Services, announced that it issued a final rule prohibiting the use of pre-dispute binding arbitration agreements. This rule only applies to long-term care facilities / nursing homes that receive federal funding from Medicare and Medicaid. The announcement can be accessed by clicking on the following: CMS finalizes improvements in care, safety, and consumer protections for long-term care facility residents .
The new arbitration regulation becomes effective on November 28, 2016, and applies moving forward. Thus, if the pre-dispute arbitration provision in the nursing home / long-term care facility contract was agreed to prior to November 28, 2016, the arbitration provision will not be barred by the new regulation.
The new regulation gives protection to the elderly entering into a long-term care facility / nursing home by preserving their right to a jury trial. (Interestingly, as I previously commented on in prior blog posts, the Superior Court of Pennsylvania already refuses to enforce pre-dispute arbitration agreements in wrongful death and survival actions. See Brosius v. HCR Manorcare, LLC, 2016 WL 1625790 (Pa. Super. April 25, 2016).).
Thus, if you find that you or a loved one will be entering into a long-term care facility or nursing home prior to November 28, 2016, you need to carefully read through the admission documents or hire an attorney, such as an attorney that focuses on elder law or one that handles nursing home negligence cases, to review the admission documents for a pre-dispute arbitration agreement.
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United States District Court for the Western District of Pennsylvania Finds Arbitration Clause in Nursing Facility Operator’s Admission Agreement Does Not Waive Right to Jury Trial as to Wrongful Death and Survival Claims
Recently, and as previously discussed in this blog, Pennsylvania state courts have found that an arbitration provision in an admission agreement of a nursing home operator or skilled nursing facility does not waive the right to a jury trial as to a wrongful death claim or survival claim.
Differentiating from recent decisions by other federal district courts in Pennsylvania permitting the wrongful death claim and survival claim to be severed when the nursing home or skilled nursing facility contract contained an arbitration agreement, the Honorable Arthur J. Schwab of the United States District Court for the Western District of Pennsylvania held in Grkman v. 890 Weatherwood Lane Operating Company, LLC, 2016 WL 3057656 (May 31, 2016), that wrongful death and survival claims against a nursing facility operator would proceed to a jury trial, despite the plaintiff signing, on behalf of his father, an admission agreement with an arbitration clause.
In Grkman, the plaintiff’s father was admitted to the defendant’s skilled nursing facility with an ulcer. Over several months, the ulcer worsened, which allegedly caused additional health complications leading to the death of the plaintiff’s father. So that his father could be admitted to the skilled nursing facility, plaintiff, as Power of Attorney, signed an Admission Agreement containing a clause requiring binding arbitration for any dispute or controversy related to plaintiff’s father’s care at the facility.
Following his father’s death, Plaintiff filed a lawsuit in the United States District Court for the Western District of Pennsylvania alleging claims for wrongful death and survival. Pursuant to the terms of the arbitration clause in the Admission Agreement, the defendant skilled nursing facility filed a motion to dismiss the claims.
In denying the motion to dismiss, Judge Schwab found that by applying general agency principles, the plaintiff, as the Power of Attorney, had the right to sign the agreement. By signing the agreement on behalf of his father, plaintiff waived his deceased father’s right to a jury trial as to the survival claim. Judge Schwab also found, however, the plaintiff did not waive his right to file a wrongful death action, which claim belongs to plaintiff and not his deceased father.
Following the above findings, Judge Schwab noted the Admission Agreement contained a choice of law provision stating that the agreement shall be interpreted according to the laws of Pennsylvania. Since Pennsylvania substantive law precludes severance of the wrongful death claim and survival claim, Judge Schwab concluded that both claims must be tried before a jury.
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