Her nursing home wouldn't call an ambulance: Arbitration to pre-empt lawsuits

Mary Hight had moved into a nursing home when she reached her late 80s, in 2002. She was diagnosed in 2003 with congestive heart failure, though she was otherwise in good health and continued to vacation with her family, according to her son. "Mom, at 90, would be on the beach in sunglasses and a bathing suit," he says.

But in 2004, when the 92-year-old woman fell ill for days and became badly dehydrated, her nursing home in Kosciusko, Mississippi, wouldn't call an ambulance, despite her daughter's urging. Instead of seriously assessing the situation, nursing home staff engaged in a diatribe with Mary's daughter Janice about the costs of an ambulance. Her daughter, Janice Cowart, pushed her mother uphill in a wheelchair to a nearby emergency room. But her mother died from heart failure the next day.

The family was surprised to realize that when her mother had entered the nursing home, Janice had accepted a nursing home contract requiring binding arbitration to resolve disputes. The arbitrator found the home was negligent both in allowing Mary to become dehydrated and failing to get her to an emergency room. But he awarded only $90,000 to the family, saying an underlying condition could have caused Mary's death. He chose not to award punitive damages. After paying the lawyers, "we didn't get one cent," said Mary's son. The nursing home has denied wrongdoing, and has declined to comment.

The nursing home industry's arbitration strategy is part of a much broader response by U.S. companies to consumer lawsuits. Nursing homes have been among the biggest converts to the practice since a wave of big jury awards in the late 1990s.

The American Arbitration Association – the biggest arbitrator – frowns on agreements requiring arbitration in disputes over nursing home care and generally refuses such cases. The American Health Lawyers Association also avoids them.

Advice to adult children looking for a nursing home for frail parents: Question admissions personnel closely. If an arbitration agreement is mandatory, write on the contract that you're being given no choice. Write, "I'm signing this because I was told I have to."

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Thanks to Nathan Koppel for the source article in the April 11 issue of the Wall Street Journal.