Nursing home's attempt to force 'binding arbitration' failed.

CASE ON POINT: Hill v. NHC Healthcare/Nashville, LLC, 2008 TN--Iw080502311 (04/30/2008) S.W.3d--TN

ISSUE: Should nursing homes be allowed to circumvent courts?

CASE FACTS: Barbara Hill was a sixty year-old woman who suffered from a number of serious medical conditions including congestive heart failure, chronic obstructive pulmonary disease, coronary artery disease and hypertension. She developed pneumonia and was admitted to the hospital. Upon her release from the hospital on May 28, 2007, she was referred to a nursing home operated by NHC Healthcare/Nashville, LLC (NHC), for further treatment. The patient was given an "Admission and Financial Contract" to sign. Section H of the document was titled "Dispute Resolution Procedure." Under its provisions, the patient or any representative of the patient was allowed to submit any dispute with the nursing home to mediation. In the event that mediation failed or the patient chose not to use that method of resolution, the aggrieved party's only avenue of recourse was binding arbitration to be administered by either the American Arbitration Association (AAA) or the American Health Lawyers Association (AHLA). The patient was dependent on the continuous administration of oxygen. On June 4, 2003, she was released from the nursing home to go home with her family where she was to receive home health care services. However the following day she was admitted to the hospital with complaints of shortness of breath and pain in her feet and back. She was discharged from the hospital on June 12, 2003, and was re-admitted to the nursing home. Her treatment plan required further continuous administration of oxygen twenty-four hours a day. She developed additional health complications at the nursing home, and on the morning of June 21,2003, NHC called for Medic One ambulance service to transport her to a hospital emergency room. When the Medic One emergency medical technician arrived at the nursing home, an NHC nurse disconnected the patient's oxygen. The EMT did not bring any oxygen to the patient's room. As he transported her from the third floor of the nursing home to the ambulance, she asked for oxygen, and then began gasping for breath. Once in the ambulance, the EMT began administering oxygen to the patient, but her condition worsened, and the EMT began Cardiopulmonary Resuscitation. The patient arrived at the hospital emergency room where doctors continued CPR, but without success. The patient was pronounced dead at 11:45 a.m. On October 8, 2003, the patient's children filed a wrongful death suit against NHC and Medic One. NHC filed a motion to compel arbitration and stay court proceedings. The trial court denied NHC's motion. NHC appealed.

COURT'S OPINION: The Court of Appeals of Tennessee affirmed the judgment of the trial court that the provision in the contract between the patient and the defendants providing for binding arbitration as the only recourse the patient had was unconstitutional. The court held, inter alia, that when ruling on an appeal of a denial of a motion to compel arbitration, it must follow the standard of review that applies to bench trials. Under that standard, review of the trial court's findings of fact are "de novo" upon the record of the trial court, accompanied by a presumption of the correctness of the finding unless the preponderance of the evidence is otherwise. The court found it was otherwise and remanded the case back to the trial court for any further proceedings necessary in accordance with the court's denial of the defendant's motion, which was denied by the trial court, ab initio.

LEGAL COMMENTARY: The court perceived the issue on appeal to be whether the trial court erred in denying NHC's motion to compel arbitration. On appeal, in asserting that the trial court did err, NHC made several arguments, all of which were rejected by the court. The court ruled that the trial court had sufficient grounds in law and evidence to hold the binding arbitration agreement unenforceable. Among them was the fact that there was a sufficient showing that arbitration would have been cost prohibitive for the plaintiffs; and that the refusal of AAA and AHLA to arbitrate this type of dispute made arbitration moot. The court recently considered the enforceability of agreements to arbitrate disputes, which necessarily includes a waiver of the right to a jury trial, in a nursing home admission agreements. While those cases involved several factual scenarios and raised various issues, many of the issues raised in this case were also raised in those cases. Most had been resolved by the Supreme Court of Tennessee. The court went on to cite several of these cases, giving emphasis to the case of Owens v. National Health Corporation et al, No. M2005 01272-SC-R1111-R-CV, 2007 WL 3284669 (Tenn. Nov, 8, 2007), in which that court had answered many of the issues involved. However, as a practical matter, the court found that the "upfront" costs for a patient arbitrating a dispute were "very high," perhaps as much as $18,000. The court found this troubling, to say the least. The court was also troubled by the issue of unconscionability. The disparity in the relationship of the patient, often in need of immediate placement in a nursing home, puts d the patient in an impossible position: "Its either the nursing home's way or the highway." This should not be!

Meet the Editor & Publisher: A. David Tammelleo, JD, is a nationally recognized authority on health care law Practicing law for over 40 years, he concentrates in health tale lay, with the Rhode Island firm of A. David Tammelleo & Associates. He has presented seminars on medical, nursing and hospital law throughout the United States. In addition to his writings as Editor of Medical Law's, Nursing Law's & Hospital Law's Regan Reports, his legal articles have been published in the most prestigious health law journals. A prolific writer, his thousands of articles, as well as his achievements as all attorney and lecturer, have won him recognition ill Martindale-Hubbell's Bar Register of Preeminent Lawyers, Marquis Who's Who in American Law, Who's Who in America and Who's Who in the World.