Ruling may limit arbitration agreements

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Nursing homes cannot use arbitration agreements to combat lawsuits related to residents' care, the Supreme Court of Appeals of West Virginia has ruled.

In a June 29 decision, the court wrote, in the unanimous decision, that “disputes should be decided by juries of lay citizens rather than paid, professional fact finders who may be more interested in their fees than the disputes at hand.”

West Virginia Health Care Association CEO Patrick Kelly says the verdict will hurt providers financially, which will increase costs for residents and the state's Medicaid program.

“It was disappointing. West Virginia experiences a significant amount of litigation,” he said. “I think this will have potential impact across the country.” 

The ruling was issued in response to three cases of families in West Virginia that brought suit against providers after a death. All had their cases dismissed in lower courts due to binding arbitration clauses. Defendants included Genesis Healthcare Corporation, Marmet SNF Operations LLC and Clarksburg Continuous Care Center.

While the plaintiffs argued that the arbitration clauses are prohibited under the West Virginia Nursing Home Act, the nursing homes argued the Federal Arbitration Act protects their agreements.

The Supreme Court sided with the families, stating that in adopting the Nursing Home Act the West Virginia Legislature “clearly intended for actions involving violations of the dignity and well-being of nursing home residents to be publicly aired in the courts.”

More pragmatically, Justice Menis Ketchum wrote that the process of filling out nursing home paperwork is “fraught” and consumers usually have “little time to investigate options or to wait for an opening at a nursing home of choice.” Plus, residents or family members may not understand the agreement has provisions that may have “serious implications for their legal and constitutional rights.”