Failure to Ensure Resident Capacity for Arbitration Agreements
Penalty
Summary
The facility failed to ensure that residents had the capacity to understand the terms of a binding arbitration agreement prior to signing. Facility policy requires that the terms and conditions of such agreements be explained in a manner that ensures the resident or their representative understands, including the fact that signing may waive the right to litigation. However, for three residents, documentation and staff interviews confirmed that the residents signed the Grievance Procedure and Voluntary Arbitration Agreement despite having cognitive impairments. Specifically, two residents with diagnoses of dementia and severe cognitive impairment, as indicated by a BIMS score of five, and a third resident with moderate impairment (BIMS score of eleven) and a history of stroke, signed the agreements. The Nursing Home Administrator confirmed that these residents did not have the capacity to understand the terms of the agreements at the time of signing. This failure was identified through review of clinical records, facility documents, and staff interviews.