Kentucky Supreme Court Ruling Protects Consumers from Forced Arbitration in Nursing Homes

For families navigating long-term care, a recent Kentucky Supreme Court decision offers a significant win. On August 14, 2025, the court ruled in Lexington Alzheimer’s Investors, LLC v. Norris that a spouse who signed a mandatory arbitration agreement on behalf of a loved one entering a nursing facility is not  bound unless she was explicitly authorized by law or a legal document to execute the agreement on his behalf. This decision could shield consumers from institutions that use arbitration clauses to limit their rights, especially in cases of negligence or abuse. Let’s break down this ruling and explore why it matters for long-term care and aging in place, alongside the broader push by consumer advocates to curb such agreements.

The Case: A Spouse’s Struggle for JusticeIn 2019, Sandra Norris became her husband Rayford’s conservator after his Alzheimer’s diagnosis, appointed by a Tennessee court. Seeking care for Rayford, Sandra admitted him to The Lantern, a private-pay personal care facility in Lexington, Kentucky. The facility required her to sign a mandatory arbitration agreement, a contract forcing any future disputes (like lawsuits) into private arbitration rather than open court. Sandra didn’t specify her signing capacity (e.g., as conservator) when she signed the agreement, and the Tennessee order wasn’t registered in Kentucky, leaving its legal effect unclear. Rayford lived at The Lantern until March 2020, during which Sandra alleged he suffered multiple falls, significant weight loss, and an infected bed sore, ultimately passing away in August 2020.
Sandra sued The Lantern for negligence, medical negligence, and wrongful death. The facility moved to compel arbitration, arguing Kentucky’s Living Will Directive Act (KRS § 311.631) gave Sandra authority to sign the agreement as Rayford’s spouse. Both the circuit court and Kentucky Court of Appeals disagreed, and the Supreme Court upheld their decisions.The Ruling: Arbitration Isn’t a Healthcare DecisionThe Kentucky Supreme Court clarified that the Living Will Directive Act allows a spouse to make healthcare decisions (e.g., consenting to or withdrawing medical treatments) only when a doctor determines the individual lacks decisional capacity. However, signing an arbitration agreement, a legal contract about how disputes are handled, doesn’t qualify as a healthcare decision. Since Sandra wasn’t Rayford’s legally recognized agent, guardian, or surrogate under a valid Kentucky order, and no physician had documented his incapacity, she lacked authority to bind him to arbitration.
The court also dismissed The Lantern’s reliance on the U.S. Supreme Court’s 2017 Kindred Nursing Ctrs. Ltd. P’ship v. Clark ruling, which struck down a Kentucky ruling that authority to bind a principal to arbitration must be explicitly stated in a power of attorney violated the Federal Arbitration Act.  The Kentucky court found its decision rested on a general contract principle (lack of authority), not a statute that discriminated against arbitration, meaning that its holding is consistent with federal law.Why This Case Protects ConsumersThis ruling is a victory for consumers, particularly those relying on institutional care for short or long-term care. Mandatory arbitration agreements often favor institutions by:

• Limiting public lawsuits, keeping negligence cases (like Rayford’s falls or bed sores) out of the spotlight.

• Restricting access to juries, which can award higher damages than arbitrators, who may lean toward businesses.

• Reducing transparency, as arbitration proceedings are private, not public court records.

By invalidating Sandra’s unauthorized signature, the court ensures families can pursue justice in court when care fails, rather than being funneled into a process that may favor the facility. For readers, this decision highlights the need to scrutinize admission contracts.Why Consumer Advocates Favor Limits on Arbitration Agreements

Consumer advocates, including groups like AARP and the National Consumer Voice for Quality Long-Term Care, have long pushed to restrict arbitration in nursing homes. Here’s why:

• Unequal Power Dynamics: Nursing homes often present arbitration agreements during admission, a stressful time when families may feel pressured to sign without understanding the consequences. Advocates argue this coerces consent, especially for vulnerable seniors or their caregivers.

• Lower Accountability: Studies show arbitration awards average significantly less than jury verdicts in nursing home cases, and facilities win 2–3 times more often in arbitration. This can let substandard care slide, as seen with Rayford’s alleged neglect.

• Hidden Abuses: Private arbitration hides patterns of neglect or abuse, preventing public awareness and systemic reform. For example, a 2023 report found 60% of nursing home arbitration cases involved unreported safety violations.

• Legal Barriers: Arbitration clauses can limit appeals or class actions, leaving families like Sandra’s with little recourse against corporate chains, which own 70% of U.S. nursing homes.

• Conflict of Interest: Arbitrators are often chosen by the facility or from a pool tied to the industry, raising bias concerns—unlike impartial judges in court.

Advocates push for federal or state laws requiring opt-in arbitration (not mandatory), clear disclosure, or bans in long-term care, arguing it protects seniors’ rights to fair legal recourse.Implications for Aging in PlaceFor families aiming to age in place, this ruling underscores the importance of legal clarity. If facility care is needed (e.g., as a backup to home care), ensure:

• Legal Authority: Review legal authority to execute agreements.  Although this situation probably worked out for the family, there may be others where the family will want to enforce an agreement.  The door swings both ways; facilities can invalidate agreements made without legal authority, just like a family can.  
• Review Contracts: Scrutinize admission agreements for arbitration clauses and clauses that enforce family responsibility for a person's debts (see, e.g.,  "Promissory Note Executed by Nursing Home Resident’s Daughter Is Not Illegal Third-Party Guarantee" and the discussion in that article regarding institutions seeking to unlawfully enforce filial responsibility).  Consult an elder law attorney to challenge unauthorized terms.
• Alternative Planning: Use Medicare Advantage plans with robust home-based benefits (e.g., telehealth, in-home PT/OT) to delay facility reliance, avoiding such disputes.
• Advocacy: Join family councils or groups like Ohio’s Area Agencies on Aging to push for consumer-friendly policies.

A Call to ActionThe Norris decision empowers consumers by rejecting forced arbitration when legal authority is absent. As nursing home litigation grows, this ruling could deter facilities from overreaching. For Ohio and Missouri families, it’s a reminder to plan ahead. Review your long-term care strategy with an elder law attorney. Don’t let institutions dictate your legal options; act now to protect your future.

Family Conflict is Biggest Threat to Your Estate Plan

For the second consecutive year, family conflict is considered by professionals as the leading threat to estate planning. The three greatest threats to estate planning are family conflict, market volatility, and tax reform.  These conclusions represent the consensus of estate planning experts, at least according to a recent survey conducted by TD Wealth.

The survey included 105 respondents who attended the 53rd Annual Heckerling Institute on Estate Planning in January, including attorneys, trust officers, accountants, charitable giving professionals, insurance advisers, elder law specialists, wealth management professionals, educators and nonprofit advisers.  Nearly half of these estate planning experts identified family conflict as the biggest threat to estate planning in 2019. 

The survey explored the various causes of family conflict when engaging in estate planning, citing the designation of beneficiaries as the most common cause of conflict. Other leading factors included not communicating the plan with family members and working with blended families.

“Family dynamics have always played a critical role in estate planning. As we start to see more blended families, we expect these conversations to become even more prevalent and challenging,” said Ray Radigan, head of private trust at TD Wealth . “Estate planning comes with the responsibility of motivating families to communicate through difficult times, which requires regular dialogue and complete transparency. To minimize risk, we encourage families to invite everyone to the table to participate in open and honest conversation about their shared goals and objectives.”

Fortunately for Ohio residents, recent law changes make arbitration clauses in trusts more powerful, discouraging expensive and protracted contests.  Moreover, when combined with in terrorem ("no contest") clauses, a trust can be a powerful tool to eliminate the cost and expense of what may be unavoidable family conflict and disagreement.     

Market volatility was also identified  as a threat by respondents in 2019, with nearly a quarter of respondents identifying volatile markets as the biggest threat to estate planning this year. This was up from 12% in 2018.  According to Radigan, this is not surprising because many clients view lifetime gifting as an important component to their estate plan.

“These gifts, however, should only be made if enough assets are retained to provide support during retirement years,” Radigan said in a statement. “While market fluctuations are certainly worth watching and can cause concern for potential gift givers, we encourage our clients to keep a long-term view when investing and remember that short-term market movements are no match for a robust estate plan and a well-balanced portfolio.”

The sweeping tax overhaul enacted in 2017 is making a broad impact on estate planning, according to the survey.  Following the increase in the federal gift and estate tax exemption, estate planners are introducing various strategies to allow clients to take advantage of the exemption. About one-third of respondents propose clients consider creating trusts to protect assets, while 26% suggest clients plan to minimize future capital gains tax consequences and 21% agree to gift now while the exemption is high.

“Estate planners are now emphasizing the importance of creating trusts for the benefit of their loved ones so that assets can be protected from future claims,” Radigan said in a statement. “For example, rather than provide a child with an outright gift or bequest, many parents are creating trusts as a means of protecting assets from future divorce claims. Additionally, these trusts can be used to ultimately protect loved ones from themselves or other loved ones.”

Additionally, 40 percent of planners believe clients will continue to give the same amount to charities as they did in 2018, and 21 percent expect clients to donate more.  That is good news for charities, and welcome news to those who might be considering charitable giving since it means a consensus of planners agree that charitable giving can accomplish at least one objective in  an estate plan.  

Senators Seek To Ban Arbitration Clauses in Nursing Home Admission Agreements

McKight's reports that a group of senators urged the Centers for Medicare & Medicaid Services (CMS) to ban arbitration clauses inserted into nursing home admission contracts, because they do not adequately protect residents' rights.

The letter, signed by 34 Democrats including lead signer Sen. Al Franken (D-MN), said recent efforts by CMS to improve resident awareness of arbitration clauses are “well-intentioned,” but ultimately complicate any future disputes and fail to improve safety. Language aimed at improving resident awareness of the clauses was included in July's proposed rule for long-term care facilities.

The senators recommended CMS prohibit the use of binding pre-dispute arbitration clauses in nursing home contracts in order to “ensure that residents and their families are not deprived of their rights.”

“All too often, only after a resident has suffered an injury or death, do families truly understand the impact of the arbitration agreement they have already signed,” the letter states.  

The letter stresses that nursing home residents and their families should only enter into arbitration agreements after an incident has occurred, allowing them to consider all of their legal rights.

Clif Porter, senior vice president of government affairs and public policy at the American Health Care Association, said his organization disagrees with the views expressed in the senators' letter.

“We believe this is a matter Congress has already addressed through the Federal Arbitration Act (FAA), and rulemaking on this issue is unnecessary,” Porter wrote in an email to Bloomberg BNA.

To read an excellent article from Oklahoma Watch, regarding these clauses, go here.  The article includes a copy of such an agreement with what some believe are onerous arbitration clauses.

To read an excellent position paper regarding arbitration clauses in nursing home admission agreements from the California Advocates for Nursing Home Reform (CANHR) which deconstructs the arguments supporting the clauses, go here.