Although the health care industry had historically been one of the fields that had not embraced pre-dispute binding arbitration agreements, that reluctance appears to be changing in at least one sector of the health care field. An examination of admission contracts used by North Carolina nursing homes and telephone survey of North Carolina nursing homes revealed that 43 percent of nursing homes now incorporate pre-dispute binding arbitration provisions into their admission contracts. All of the major nursing home chains operating in North Carolina use pre-dispute binding arbitration agreements in at least some of their facilities, while smaller operators use them sporadically.
The terms of these agreements vary considerably. The large chains tend to incorporate some of the provisions in the model arbitration agreement drafted by the American Health Care Association (AHCA), which includes a 30-day rescission period and language that acceptance of the arbitration provision is not a precondition to admission. Some of the large chain facilities also include more dubious provisions like the arbitration will be conducted at the facility if the parties can’t agree on another location. Some of the smaller operators include provisions that limit damages and discovery, prohibit punitive damages, and expressly condition entry to the facility on signing the pre-dispute arbitration agreement.
Although some of these agreements contain language stating that the agreement is voluntary or may rescinded, this language, by itself, provides no guaranteed protection that facilities are enforcing the contracts as written. The telephone survey found incidents where nursing homes were requiring new residents to sign pre-dispute binding arbitration agreements as a condition of admission, even though the language in those facilities’ agreements stated that signing the agreement was voluntary. This study also found evidence of a significant amount of confusion among staff of nursing homes using these agreements about whether their facilities were using them at all and what arbitration agreements really meant.
This is principally an empirical study, however, the United States Supreme Court decided its most recent Federal Arbitration Act case - AT&T Mobility LLC v. Concepcion - just before this paper was finalized. At first glance, Concepcion seems to have significantly impacted the power of state courts to use unconscionability to invalidate arbitration agreements. However, this interpretation may not prove accurate. Concepcion presents a very unique situation in which the opinion of a concurring justice who joined the majority opinion is so contrary to that of the putative majority opinion, that the decision may actually be a plurality and not a majority. If that is the case, Concepcion may have little precedential value beyond its particular facts.