AGING AND DISABILITY SERVICES ADMINISTRATION

2006 BH "Dear Provider" Letters

March 1, 2006

ADSA: BH #2006-004
ARBITRATION AGREEMENTS

Dear Boarding Home Provider:

As you probably know the use of arbitration agreements in long-term care boarding homes has been challenged in courts around the country. In August 2005, the Department convened a workgroup of resident advocates and provider representatives to discuss the use of arbitration agreements in long-term care facilities.

The following state requirements are relevant to the use of arbitration agreements in boarding homes:

• Boarding homes are required to encourage and assist residents in the exercise of their rights as residents of the boarding home and as citizens or residents of the United States. RCW 70.129.020 and WAC 388-78A-2660.
• Boarding homes must not request or require residents to sign waivers of their rights. RCW 70.129.105
• Boarding homes must not request or require residents to sign waivers of potential liability for injuries or losses of personal property. RCW 70.129.105
• Vulnerable adults who have been abused, neglected, abandoned or financially exploited while residing in long-term care boarding homes may sue the provider for damages for injuries, pain and suffering, and lost property. If the suit is successful, the vulnerable adult will be entitled to payment of attorney fees and other costs. When adopting these provisions the legislature encouraged parties involved in a dispute about the care or treatment of a vulnerable adult, to use the least formal means available to try to resolve the dispute. RCW 74.34.200

After reviewing the law and considering feedback from the workgroup, the Department has identified the following information related to the use of arbitration agreements:

• Arbitration agreements are legal in Washington State.
• Boarding homes may provide a copy of arbitration agreements to residents or their representatives for information purposes, but, if the agreement includes a waiver of a jury trial, attorney’s fees and related costs, or other rights, the boarding home may not ask or require the residents or their representatives to sign it.
• Residents and representatives should not be presented with arbitration agreements at the time of admission because the resident may be too overwhelmed to understand the implications of the agreement, and may erroneously conclude that the agreement needs to be signed in order to be admitted.
• At the time a resident signs any arbitration agreement, the individual must be able to understand what he or she has signed and must understand the agreements potential impact.
• Courts around the country have issued conflicting decisions when asked to decide whether certain individuals, such as children and durable powers of attorney for health care decision making, can sign arbitration agreements on behalf of a resident.

If Department staff review a boarding home’s arbitration agreement or the circumstances surrounding the execution of such an agreement, DSHS staff may use questions along the following lines to determine whether a deficient practice exists.

• Did the boarding home ask or require a resident or representative to sign an agreement waiving any resident rights (including the right to a jury trial or the right to attorneys’ fees)?
• Did the boarding home ask or require a resident or representative to sign a waiver of potential liability for injury or loss of personal property?
• Did the boarding home allow a resident to sign an arbitration agreement when the resident did not have the capacity to understand what he or she was signing?
• When did the boarding home present the arbitration agreement to the resident or the representative?
• Did the boarding home refuse to admit an individual or discharge a resident for refusing to sign or to comply with an arbitration agreement?
• Did the boarding home retaliate against a resident who refused to sign or comply with an arbitration agreement?
• Did the boarding home allow an individual to sign an arbitration agreement on behalf of the resident when that individual did not have the legal authority to waive the resident’s rights?
• Did the boarding home offer an arbitrator selection process that would not result in the selection of neutral arbitrators?

If you intend to use arbitration agreements in your boarding home and have any legal questions, you may want to consult with your attorney and you should encourage residents to consult with their attorneys or the state long-term care ombudsman before they sign an arbitration agreement.

Sincerely,

Joyce Pashley Stockwell, Director
Residential Care Services