Failure to Adequately Explain Binding Arbitration Agreements to Cognitively Intact Residents
Penalty
Summary
The deficiency involves the facility’s failure to ensure that binding arbitration agreements were explained to residents in a form and manner they understood, and to obtain acknowledgment that they understood the agreements before signing. Facility policy dated 12/12/24 states that the facility asks all residents to enter into binding arbitration, that it is not a condition of admission or continued care, and that arbitration is a private process in which an independent arbitrator settles disputes. The policy further requires that the agreement be explained to the resident and/or representative in a way they understand. For one resident (R2), who had a BIMS score of 15 indicating intact cognition, the arbitration agreement signed and dated 1/22/26 stated that any legal dispute related to the admission agreement or services would be resolved exclusively by binding arbitration and not by a lawsuit or judicial process. During interview, R2 did not recall any conversation with the facility about binding arbitration, and upon review of the signed agreement with the surveyor, stated they would not want that. A second cognitively intact resident (R72), also with a BIMS score of 15, signed an arbitration agreement dated 2/5/26 containing the same language that disputes would be resolved exclusively by binding arbitration and not through the judicial system. In interview, R72 recalled being told there was a form to sign to allow them to dispute something and believed signing would allow them to dispute issues, but did not understand that disputes would be resolved by an arbitrator instead of the judicial system. After the surveyor explained that disputes would be handled by an appointed third party and not the courts, R72 stated it had not been explained that way and that they would not have signed if it had been. The Business Office Manager reported that they explain arbitration as a process where, in case of a dispute, the facility, resident/POA, and lawyers sit down to see if they can reach agreement before it goes to the legal system, and that if no agreement is reached it would go to court, which conflicts with the agreement’s language. The NHA acknowledged that the form states residents cannot use the legal system, that residents should not sign something they do not understand, and that staff should clearly understand and accurately explain the document to residents.
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