A perceived lack of clarity and concern over an injunction at the federal level did not prevent the Illinois House from passing a bill barring long-term health care facilities from requiring residents to sign an arbitration agreement before any dispute occurs.
House Bill 0238, introduced by state Rep. Mary Flowers (D-Chicago), passed the House on Tuesday and was taken up by the Senate a day later. It is in the hands of the Assignments Committee. The bill is written to protect consumers by preventing a facility from entering into a pre-dispute arbitration agreement with a long-term care resident at any time. It would, however, allow a facility to enter into such an agreement after a dispute has occurred. Any active pre-dispute arbitration agreement would still be legally binding.
Flowers explained that the bill codifies a federal law issued by the U.S. Department of Human Health Services.
During House debate, Rep. Tom Demmer (R-Dixon) was among House members questioning the bill's language, arguing that it wasn't clearly framed. He voiced his concern about possible long-term legal problems the state might face.
“I think our real hesitation revolves around the fact that we are setting ourselves up [for] another lawsuit,” Demmer said. “It’s pending at the federal level, and we should get clarity there before we take this policy into the state of Illinois, otherwise we are just asking for a lot of cost to be expended in litigation with the state and probably a significant delay into the implementation here as well. So, for that reason, I will be voting ‘no’ today.”
But one thing is clear, he said: following the federal rule is not that simple.
“As soon as that federal rule was issued last fall, a court issued an injunction against the implementation of that rule,” he said. “So, while there is a pending federal rule today, there is an injunction prohibiting that from being effectively enforced today.”
Flowers argued that federal law provides substantial reason for state-level legislation.
"They are as follows: It strengthens the rights of [residents in] long-term health care facilities," Flowers said. "The signing of an arbitration clause – at a time of admissions when a resident is unwell, the family is overwhelmed, and [when] time is of the essence – is not in their favor to have this information before them.”
A pre-dispute arbitration agreement mandates that if an issue arises it will be handled through binding arbitration, not in court.
“Once a resident and the family arrive in the facility, they are handed paper to sign that includes an arbitration agreement,” Flowers said. “Most of them do not know what they are signing, and problems may occur because they are waiving any problems that may come forward. A pre-dispute arbitration clause imposed by long-term care facilities is never truly voluntary. As a result of what is already federal law, I would respectfully ask that we codify it.”
Flowers said Illinois would follow any changes to the law made by the Supreme Court.
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