Failure to Ensure Neutral, Mutually Agreed Arbitration Terms in Admission Agreements
Summary
Facility staff failed to ensure that binding arbitration agreements between the facility and residents or their representatives included language that a neutral arbitrator, agreed upon by both parties, would be selected and that the arbitration venue would be convenient to both parties. The facility’s most recent admission packet contained a Resident-Facility Binding Arbitration Agreement that required disputes related to services or health care to be resolved exclusively by binding arbitration and documented that by signing, parties waived their rights to have claims decided in court. However, the agreement did not contain any language stating that the arbitrator would be neutral and mutually agreed upon, nor that the location of arbitration would be convenient to both parties. For one resident with multiple sclerosis, muscle spasms, vitamin deficiencies, contracture, anemia, and weakness, the face sheet showed he was his own responsible party and an admission MDS documented intact cognition with a BIMS score of 14. A binding arbitration agreement was electronically signed by this resident and the Admissions Director. In a face-to-face interview, the resident stated he did not recall the Admissions staff explaining that a neutral arbitrator and a neutral location, selected by both parties, would be used if arbitration occurred. Another resident with dysphagia, hemiplegia and hemiparesis following cerebral infarction, a gastrostomy, type 2 diabetes mellitus, cognitive communication issues, generalized muscle weakness, and gout had an arbitration agreement signed by an emergency contact as the resident’s representative and the Admissions Director. The admission MDS showed a BIMS score of 0, while a later quarterly MDS showed a BIMS of 15. During a telephone interview, the emergency contact stated they did not remember admission staff explaining that they could select a neutral arbitrator and a neutral, convenient location for arbitration. A third resident with a left rib fracture, protein-calorie malnutrition, atrial fibrillation, systolic congestive heart failure, generalized muscle weakness, and a cognitive communication deficit was listed as her own responsible party, with multiple emergency contacts. The arbitration agreement was electronically signed by one emergency contact as the resident’s representative and by the Admissions Director, and the admission MDS showed intact cognition with a BIMS score of 15. In a face-to-face interview, this resident stated facility staff did not explain that both parties could choose a neutral arbitrator and a neutral location for arbitration. A fourth resident with hemiplegia affecting the right dominant side, a displaced fracture of the right clavicle, hematuria, generalized muscle weakness, adjustment disorder with mixed disturbance of emotions and conduct, and a cognitive communication deficit had a power of attorney as representative. The arbitration agreement was electronically signed by the representative and the Admissions Director, and the admission MDS showed a BIMS score of 14. In a telephone interview, the representative stated they did not recall anyone from Admissions explaining that a neutral arbitrator and neutral location would be selected by both parties. Interviews with residents, representatives, and emergency contacts who had signed arbitration agreements showed no evidence that staff explained these rights, and the Admissions Director acknowledged that the agreement lacked language regarding selection of the arbitrator and location for arbitration.
Penalty
Resources
Below are regulatory guidelines relevant to this citation:
Arbitration Agreements Lacked Venue Selection Language: The facility failed to ensure arbitration agreements for three residents included a venue selection convenient to both parties. Record review showed the residents had significant medical conditions, and the DCM confirmed the agreements did not contain the required venue information. The ADMIN stated the form did not provide for venue selection and the facility had no P&P for arbitration agreements.
Arbitration Agreement Lacked Neutral Arbitrator Provision: A resident with multiple chronic conditions, including dementia, COPD, dysphagia, and HTN, had an arbitration agreement that did not explicitly state that a neutral arbitrator would be selected by both parties. During survey review, the resident could explain the purpose of the agreement but could not explain why it was resigned, and the AD confirmed the original agreement did not meet the required terms.
Two residents’ arbitration agreements did not include provisions for a neutral arbitrator agreed upon by both parties or a venue convenient to both the residents and the facility. The AA confirmed the missing language, and the DA stated she was not aware these items needed to be included in the agreements.
Arbitration Agreement Lacked Neutral Arbitrator Selection: The facility's binding arbitration agreement did not ensure that both the resident and/or resident rep and the facility agreed on a neutral arbitrator. The agreement only addressed where arbitration would occur if the parties could not agree on a location, and the owner acknowledged that neutral arbitrator selection was not addressed. Records showed 12 residents were admitted after the agreement was implemented, with most agreeing to arbitration and others waiving or pending.
Arbitration Agreement Lacked Clear Neutral Venue: The facility failed to ensure its arbitration agreement clearly identified a neutral venue convenient to both parties. The admission agreement referenced arbitration under the FAA and SC Uniform Arbitration Act, but did not further clarify the SC Code of Laws for the signee. The form also listed arbitration as occurring in the county where the community is located, while Exhibit C stated disputes would be resolved in [NAME], SC. The CM said disputes would be handled at the company office, and the ED acknowledged the document contained conflicting venue language.
A facility arbitration agreement stated that any litigation would be heard exclusively in one county in Florida and no other location. Sampled residents were unable to explain the arbitration process in detail, and the Social Services Director, DON, and NHA all confirmed the venue language limited disputes to that single location.
Arbitration Agreements Lacked Venue Selection Language
Penalty
Summary
The facility failed to ensure that arbitration agreements provided a selection of a venue convenient to both the facility and the resident for three sampled residents. During interview and record review, Resident 27’s admission record and H&P showed admission with diagnoses including chronic respiratory failure, deletion of chromosome 1p36, and Tetralogy of Fallot; Resident 47’s H&P showed admission with diagnoses including chronic lung disease, recurrent pneumonias, and gross developmental delay; and Resident 51’s admission record and H&P showed admission with diagnoses including chronic respiratory failure, cerebral palsy, and spastic quadriplegia. During a concurrent interview and record review with the Director of Case Management, the arbitration agreements for Residents 27, 47, and 51 were reviewed and each was found not to include information regarding the selection of a venue convenient to both parties. The Director of Case Management confirmed that the binding arbitration agreements for all three residents did not have this information and stated there should have been. During a later interview, the Administrator stated the arbitration agreement form did not provide for the selection of a venue convenient to both parties and that the facility did not have a policy and procedure for arbitration agreements.
Arbitration Agreement Lacked Neutral Arbitrator Provision
Penalty
Summary
The facility Arbitration Agreement failed to explicitly state that the agreement provided for the selection of a neutral arbitrator agreed upon by both parties for one resident reviewed for arbitration agreements. Resident #73 was admitted with multiple diagnoses including atherosclerotic heart disease, polyneuropathy, insomnia, contracture of the left elbow, lack of coordination, muscle weakness, dementia, abnormal posture, COPD, dysphagia, hypertension, cognitive communication deficit, alcohol abuse, gastro-esophageal reflux, and chronic hepatitis. The most recent MDS showed a BIMS score of 15, indicating the resident was cognitively intact at the time of the assessment. During the survey, the resident explained the purpose of the facility arbitration agreement but was not willing to review the signed agreement from admission or the later agreement signed again by the resident. The resident could not explain why the arbitration agreement was resigned. Review of the original agreement signed on admission showed that it did not provide for the selection of a neutral arbitrator agreed upon by both parties. The AD confirmed that the agreement did not meet the requirements and stated that the resident was asked to sign a new arbitration agreement after this issue was identified during the survey process.
Arbitration Agreements Lacked Neutral Arbitrator and Convenient Venue Provisions
Penalty
Summary
Facility failed to ensure that the arbitration agreements for two residents included language providing for the use of a neutral arbitrator agreed upon by both parties and the selection of a venue convenient to both parties, as required by the facility’s policy. During review of Resident 51’s admission record, it was noted that the resident was originally admitted on [DATE]. Resident 87’s admission record showed original admission on [DATE]. During a concurrent interview and record review, the Admissions Assistant reviewed both residents’ arbitration agreements, dated 5/18/2023 and 11/26/2024, and confirmed that neither agreement included provisions for a neutral arbitrator agreed upon by both parties or for a venue convenient to both the residents and the facility. The Admissions Assistant stated he was not aware of the specific items that needed to be included and said he would need to speak with the Director of Admissions. The Director of Admissions stated she was not aware that the arbitration agreements needed to include a convenient venue and a neutral arbitrator agreed upon by both parties, and acknowledged that these provisions were important so residents would know there was no bias in the arbitration process.
Arbitration Agreement Lacked Neutral Arbitrator Selection
Penalty
Summary
The facility's binding Arbitration Agreement failed to provide a neutral and fair arbitration process because it did not ensure that both the resident and/or resident representative and the facility agreed on the selection of a neutral arbitrator. Review of the undated Resident and Facility Arbitration Agreement showed that binding arbitration would be conducted at a place agreed upon by the parties, or if no agreement was reached, at the facility, but it did not address how a neutral arbitrator would be selected by both parties. The facility's Resident Listing Report dated 3/12/26 showed 12 residents were admitted after 10/1/25, and an undated listing of those residents indicated whether each agreed or declined the arbitration agreement, with 9 agreeing, 3 waiving, and 1 decision pending. On 3/12/26 at 1:57 p.m., the facility owner stated the facility was purchased in September 2025 and binding arbitration agreements were implemented, and acknowledged that the selection of a neutral arbitrator was not addressed in the agreement.
Arbitration Agreement Lacked Clear Neutral Venue
Penalty
Summary
The facility failed to ensure that its arbitration agreement provided a neutral venue that was convenient to both parties and clearly documented the selection of the arbitrator and venue for residents who signed the agreement. Review of the admission agreement dated August 2024 showed a notice under Section 15-48-10 of the South Carolina Code of Laws stating that the agreement was subject to arbitration, and another section stating that if the Federal Arbitration Act did not apply, the agreement would be enforceable under the South Carolina Uniform Arbitration Act. The agreement did not include additional clarification of the South Carolina Code of Laws for the signee to review. The admission agreement also stated that arbitration would be conducted in the county where the community is located, while Exhibit C stated that legal disputes, controversies, demands, or claims would be resolved exclusively by binding arbitration to be conducted in [NAME], South Carolina. During interviews, the Case Manager stated disputes would be conducted in [NAME], South Carolina at the company office. The Executive Director stated the admission agreement had been updated at the end of 2024, confirmed that arbitration could occur anywhere, and acknowledged that the document showed both [NAME], South Carolina and the specific county as the location for arbitration, stating the form would have to be revised.
Arbitration Agreement Limited Venue to One County
Penalty
Summary
The facility failed to have an arbitration agreement that provided the selection of a venue convenient for both parties when there is a dispute. Review of the arbitration agreement showed that any litigation arising under or related to the agreement would have venue exclusively in [NAME] County, Florida and no other location. The deficiency was identified through record review and interviews with facility staff and residents. Residents #35, #47, and #42 were sampled from the facility’s list of newly admitted residents who signed the arbitration agreement. During interviews, Resident #35 said she was familiar with arbitration but could not explain the facility’s arbitration process. Resident #47 said arbitration involved using a mutual party to resolve issues at the facility, but he could not explain further details. Resident #42 said she had no knowledge of the facility arbitration process and was unable to explain what arbitration is. The Social Services Director said she explains the arbitration process to residents upon admission before they sign it and confirmed the agreement limited venue to [NAME] County, Florida. The DON was unable to show where the agreement stated residents had a right to a neutral venue and also confirmed the venue language. The NHA likewise confirmed the agreement stated venue was only in [NAME] County, Florida and no other location.
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