The Jury is Out: Mandating Pre-Treatment Arbitration Clauses in Patient Intake Contracts

Journal of Dispute Resolution Volume 2018 | Issue 2 Article 16 2018 The Jury is Out: Mandating Pre-Treatment Arbitration Clauses in Patient Intake Contracts Sarah Sachs Follow this and additional works at: https://scholarship.law.missouri.edu/jdr Part of the Dispute Resolution and Arbitration Commons Recommended Citation Sarah Sachs, The Jury is Out: Mandating Pre-Treatment Arbitration Clauses in Patient Intake Contracts, 2018 J. Disp. Resol. (2018) Available at: https://scholarship.law.missouri.edu/jdr/vol2018/iss2/16 This Comment is brought to you for free and open access by the Law Journals at University of Missouri School of Law Scholarship Repository. It has been accepted for inclusion in Journal of Dispute Resolution by an authorized editor of University of Missouri School of Law Scholarship Repository. Sachs: The Jury is Out: Mandating Pre-Treatment Arbitration Clauses in P The Jury is Out: Mandating PreTreatment Arbitration Clauses in Patient Intake Contracts SARAH SACHS* I. INTRODUCTION Each year, more than two hundred thousand people are killed and more than one hundred and thirty thousand people are injured by medical error, much of which is preventable.1 Traditionally, the tort system provided means of recovery for wrongful deaths and patient injuries through malpractice claims. However, in an era where practitioners are attempting to deter publicity, jury awards, punitive damages, extensive discovery, and class actions, arbitration is viewed as a shield from these “evils.”2 Mandatory arbitration clauses have become ubiquitous in a broad range of industries, including the healthcare industry.3 Doctors, hospitals, and health plans are following the lead of other industries by requiring plan enrollees and patients to agree to mandatory arbitration of disputes prior to receiving treatment.4 Arbitration clauses emerging in the healthcare setting are in many cases mandatory and binding.5 These clauses are embedded in health plan contracts with insurance purchasers and presented to patients by hospitals and physicians at the outset of treatment.6 Such clauses stipulate that all future disputes between the patient and the hospital or physician must be resolved through mandatory arbitration, which results in parties waiving their right to trial or judicial oversight of their disputes.7 Unfortunately, most patients are unaware they are waiving their right to a jury trial or judicial oversight of their disputes when signing health providers’ patient intake contracts. A vast majority of patients do not read medical disclosures, or have the sophistication to understand the information contained within them.8 Even if patients were to read the fine print of health providers’ contracts, patients are still likely to fail to recognize that the contract contained an arbitration clause. 9 Further, * B.A., University of Missouri-Columbia 2016; J.D. Candidate, University of Missouri School of Law, 2019. I would like to thank the Editorial Board of the Journal of Dispute Resolution for their time and effort editing this Comment. I would also like to thank my family for their endless support and dedicate this Comment in memory of my mother, Shelly Sachs. 1. Lydia Nussbaum, Trial and Error: Legislating ADR for Medical Malpractice Reform, 76 Md. L. Rev. 247, 248-49 (2017). 2. Jean R. Sternlight, Creeping Mandatory Arbitration: Is It Just?, 57 Stan. L. Rev. 1631, 1631 (2005). 3. Id. 4. Elizabeth Rolph et. al., Arbitration Agreements in Health Care: Myths and Reality, 60 L. & CONTEMP. PROBS. 153, 154 (1997). 5. Id. 6. Id. 7. Id. 8. Myriam E. Gilles, Operation Arbitration: Privatizing Medical Malpractice Claims, 15 THEORETICAL INQUIRES IN LAW 671, 687 (2014). 9. Id. Published by University of Missouri School of Law Scholarship Repository, 2018 1 Journal of Dispute Resolution, Vol. 2018, Iss. 2 [2018], Art. 16 118 JOURNAL OF DISPUTE RESOLUTION [Vol. 2018 if a patient recognized and refused to sign a mandatory arbitration clause, doctors and hospitals containing mandatory arbitration clauses in their patient intake contracts reserve the right to forfeit treatment if the patient refuses to sign. Refusal to sign is a ground to refuse treatment, unless the patient faces a medical emergency. Doctors, hospitals, and health plans requiring mandatory arbitration concern patient advocates because often times patients are not in a position to negotiate at the time the contract is executed.10 In fact, no negotiation occurs when patients sign arbitration clauses buried in a doctor’s office or hospital admissions paperwork.11 The repercussions on patients forced into mandatory and binding arbitration after a dispute arises from medical treatment can be catastrophic for patients and their loved ones, while beneficial for doctors, hospitals, and health plan providers. This Comment advocates against the use of mandatory arbitration clauses in healthcare providers’ patient intake contracts and discusses the interplay between federal and state statutes that create disparities in enforceability and unenforceability of mandatory arbitration clauses in state courts. Part II discusses the history of mandatory arbitration and its development in healthcare providers’ patient intake contracts. Part III examines state statutory limitations on pre-treatment arbitration clauses. Finally, Part IV addresses how courts analyze these agreements and possible approaches to avoid mandatory arbitration arising in healthcare providers’ patient intake contracts. II. HISTORY OF MANDATORY ARBITRATION AND PATIENT INTAKE CONTRACTS The United States Supreme Court has taken a “bipolar approach to arbitration.”12 During the nineteenth and early twentieth centuries, courts were hostile towards arbitration13 agreements.14 However, in recent years the Supreme Court has largely supported arbitration agreements, even when mandatory.15 Courts enforcing mandatory arbitration clauses in healthcare providers’ patient intake contracts are governed and guided by the Federal Arbitration Act (FAA). A. The Federal Arbitration Act Federal support for alternative dispute resolution (ADR) agreements, such as arbitration clauses, surfaced in 1925 when Congress enacted the United States Arbitration Act.16 After the enactment of the act, courts generally disfavored arbitration clauses and deemed them unenforceable because the courts viewed arbitration 10. Nussbaum, supra note 1, at 275. 11. Id. 12. Lauren Gaffney, The Circle of Assent: How “Agreement” Can Save Mandatory Arbitration in Long-Term Care Contracts, 62 VAND. L. REV. 1017, 1023 (2009). 13. Arbitration is defined as “a dispute-resolution process in which the disputing parties choose one or more neutral parties to make a final and binding decision resolving the dispute.” BLACK’S LAW DICTIONARY (10th ed. 2014). 14. See Kulukundis Shipping Co., S/A, v. Amtorg Trading Corp., 126 F.2d 978, 984 (2d Cir. 1942); Jodi Wilson, How the Supreme Court Thwarted the Purpose of the Fed (...truncated)