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Rights Regarding Arbitration Agreements in Nursing Homes

  • Noteworthy Laws Regarding Arbitration Agreements in California Nursing Homes

  • 1.  Nursing homes cannot require applicants or residents to sign an arbitration agreement as a condition of admission or medical treatment. (California Health & Safety Code §1599.81(a))

  • 2.  An arbitration agreement must be on a form separate from the admission agreement and must have separate signatures. (California Health & Safety Code §1599.81(b))

  • 3.  A resident cannot waive his or her ability to sue for violations of residents' rights.  (California Health & Safety Code §§ 1430(b) & 1599.81(d))

  • 4.  Residents and their legal representatives can rescind an arbitration agreement by giving written notice to the facility within 30 days of their signature. (California Code of Civil Procedure §1295(c))

  • (for the complete text of the cited laws, see below)

Rights Regarding Arbitration Agreements in RCFEs

  • Health and Safety Code Section 1569.269(c) states no Residential Care Facilities for the Elderly (RCFE) admission contract may include a waiver of benefits or rights. This might mean that residents may not be required to waive their right to a trial in the case of a legal dispute.

  • Regardless of whether arbitration agreements in RCFEs are permitted, consumers need to be particularly cautious when signing their admission agreements. Many facilities, particularly the larger, 60+ facilities and those owned by corporate chains, include pre-dispute arbitration agreements in their admission agreements. Some tips for avoiding or voiding these agreements:

  • 1. Get admitted first and then cross out the arbitration provisions in the admission agreement.


    2. Have a relative who is not a power of attorney agent or conservator sign the agreement for the resident. Relatives do not have the authority to sign pre-dispute arbitration agreements.


    3. Tell the facility if it insists on an arbitration agreement as a condition of admission, you will take your business to another facility. Contracts are two-way streets and all of the terms are subject to negotiation.

Laws Regarding Arbitration Agreements in Nursing Homes

  • Health and Safety Code Section 1599.81 

    (a) All contracts of admission that contain an arbitration clause shall clearly indicate that agreement to arbitration is not a precondition for medical treatment or for admission to the facility.

    (b) All arbitration clauses shall be included on a form separate from the rest of the admission contract. This attachment shall contain space for the signature of any applicant who agrees to arbitration of disputes.

    (c) On the attachments, clauses referring to arbitration of medical malpractice claims, as provided for under Section 1295 of the Code of Civil Procedure, shall be clearly separated from other arbitration clauses, and separate signatures shall be required for each clause.

    (d) In the event the contract contains an arbitration clause, the contract attachment pertaining to arbitration shall contain notice that under Section 1430, the patient may not waive his or her ability to sue for violation of the Patient's Bill of Rights.

  • Health and Safety Code Section 1430
     
    (a) Except where the state department has taken action and the violations have been corrected to its satisfaction, a licensee who commits a class “A” or “B” violation may be enjoined from permitting the violation to continue or may be sued for civil damages within a court of competent jurisdiction. An action for injunction or civil damages, or both, may be prosecuted by the Attorney General in the name of the people of the State of California upon his or her own complaint or upon the complaint of a board, officer, person, corporation, or association, or by a person acting for the interests of itself, its members, or the general public. The amount of civil damages that may be recovered in an action brought pursuant to this section may not exceed the maximum amount of civil penalties that could be assessed on account of the violation or violations.

    (b) A current or former resident or patient of a skilled nursing facility, as defined in subdivision (c) of Section 1250, or intermediate care facility, as defined in subdivision (d) of Section 1250, may bring a civil action against the licensee of a facility who violates any rights of the resident or patient as set forth in the Patients Bill of Rights in Section 72527 of Title 22 of the California Code of Regulations, or any other right provided for by federal or state law or regulation. The suit shall be brought in a court of competent jurisdiction. The licensee shall be liable for the acts of the licensee's employees. The licensee shall be liable for up to five hundred dollars ($500), and for costs and attorney fees, and may be enjoined from permitting the violation to continue. An agreement by a resident or patient of a skilled nursing facility or intermediate care facility to waive his or her rights to sue pursuant to this subdivision shall be void as contrary to public policy. [emphasis added]

    (c) The remedies specified in this section shall be in addition to any other remedy provided by law.

  • California Code of Civil Procedure Section 1295

  • (a) Any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider shall have such provision as the first article of the contract and shall be expressed in the following language: “It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.”

    (b) Immediately before the signature line provided for the individual contracting for the medical services must appear the following in at least 10-point bold red type:

  • “NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE 1 OF THIS CONTRACT.”


  • (c) Once signed, such a contract governs all subsequent open-book account transactions for medical services for which the contract was signed until or unless rescinded by written notice within 30 days of signature. Written notice of such rescission may be given by a guardian or conservator of the patient if the patient is incapacitated or a minor.


  • (d) Where the contract is one for medical services to a minor, it shall not be subject to disaffirmance if signed by the minor's parent or legal guardian.


  • (e) Such a contract is not a contract of adhesion, nor unconscionable nor otherwise improper, where it complies with subdivisions (a), (b), and (c) of this section.


  • (f) Subdivisions (a), (b), and (c) shall not apply to any health care service plan contract offered by an organization registered pursuant to Article 2.5 (commencing with Section 12530) of Division 3 of Title 2 of the Government Code, or licensed pursuant to Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code, which contains an arbitration agreement if the plan complies with paragraph (10) of subdivision (a) of Section 1363 of the Health and Safety Code, or otherwise has a procedure for notifying prospective subscribers of the fact that the plan has an arbitration provision, and the plan contracts conform to subdivision (h) of Section 1373 of the Health and Safety Code.

  • (g) For the purposes of this section:

       (1) “Health care provider” means any person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, or licensed pursuant to the Osteopathic Initiative Act, or the Chiropractic Initiative Act, or licensed pursuant to Chapter 2.5 (commencing with Section 1440) of Division 2 of the Health and Safety Code; and any clinic, health dispensary, or health facility, licensed pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code. "Health care provider" includes the legal representatives of a health care provider;

       (2) “Professional negligence” means a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital.

  • California Civil Code Section 1670.5

  • (a) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

    (b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination.

  • 22 California Code of Regulations Section 72516(d)

  • (d) The licensee shall not present any arbitration agreement to a prospective resident as a part of the Standard Admission Agreement. Any arbitration agreement shall be separate from the Standard Admission Agreement and shall contain the following advisory in a prominent place at the top of the proposed arbitration agreement, in bold-face font of not less than 12 point type: “Residents shall not be required to sign this arbitration agreement as a condition of admission to this facility.”

Page Last Modified:January 8, 2016