It is commonplace for residents of long-term care facilities to sign an agreement upon admission to the facility which includes a provision that arbitration is the exclusive remedy to resolve any disputes, including regarding medical treatment. There has been uncertainty regarding the enforcement of these exclusive arbitration clauses over the concern that if these provisions are enforced that healthcare providers (like long-term care facilities) will not be able to avail themselves of the provisions and associated benefits of the Medical Malpractice Act (“MMA”), including the limitation on the amount of a healthcare provider’s liability, which is presently capped at $500,000.
The Indiana Court of Appeals has now provided some clarity as to this issue in Estate of King v. Aperion Care, No. 19A-MI-3037, 2020 Ind. App. LEXIS 377 (Ct. App. Sep. 2, 2020). The case involved a resident, who at the end of her life, signed an agreement with a long-term care facility she was being admitted to which included an exclusive arbitration clause. The clause provided that any dispute arising from the resident’s admission and care was to be resolved exclusively by binding arbitration.
Prior to her death, the resident allegedly developed numerous ailments causing her injuries and damages, prompting her estate to file a proposed complaint with the Indiana Department of Insurance alleging medical malpractice after her passing. Her estate subsequently moved to compel arbitration relying on the exclusive arbitration clause set forth in agreement the resident signed with the long-term care facility. The trial court denied the motion as premature, reasoning the estate’s claims must first proceed through the review process and procedures set forth in the MMA through the IDOI. An appeal of the decision ensued which resulted in reversal by the Indiana Court of Appeals.
The Court of Appeals ruled that the MMA did not apply when the long-term care facility entered into the agreement with the resident requiring arbitration as the exclusive remedy to resolve disputes. The Court made clear that the resident and long-term care facility could have made arbitration subject to a condition precedent, like submission of the case to the medical review panel pursuant to the MMA. Here, there was no contractual language in the agreement providing that the resident had to seek a decision from a medical review panel in accordance with the MMA prior to arbitration.
In light of this decision clarifying the confluence of arbitration and the MMA, it is imperative that long-term care facilities and other healthcare providers revise their arbitration agreements to (1) make arbitration subject to submission of the case to a medical review panel under the MMA; and (2) require arbitration comply with all provisions of the MMA, including the limitation of liability. Doing so will provide the healthcare provider the benefits of the MMA with the attendant features of resolving the dispute in arbitration. It may equally be beneficial to exempt arbitration in claims covered by the MMA or require arbitration also be subject to other statutory limitations of liability, such as Indiana’s General Wrongful Death Act.
If you would like a full copy of the opinion or if you have any other questions related to health care liability, please contact a member of our firm’s Medical Malpractice; Dental Liability or Long-Term Care Liability Practice Groups.
This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.
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