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.

Choosing a Nursing Home or Skilled Nursing Facility: Navigating the Long-Term Care Crisis

Choosing a nursing home or skilled nursing facility (SNF) is a critical decision for seniors and families. A recent report from Nonprofit Quarterly, “The Triple Threat Facing Nursing Homes—And How to Overcome It, explains why many residents view nursing home life as being a "Fate Worse than Death." It highlights a crisis driven by private equity ownership, profit-driven care, and COVID-19’s lasting impact. Understanding these risks is essential to selecting a safe facility or planning to age in place with confidence.

This article will break down what the “triple threat” means for you, explain the risk, i.e., the balance of nonprofit versus for-profit facilities, show you how to choose safer nursing homes and how to identify private equity ownership, and why planning to stay out of an institution is more important than ever.

The Triple Threat: What It Means for You

The Nonprofit Quarterly report identifies three interconnected forces threatening nursing home care quality, which directly impact seniors and families considering institutional care:

• Commodification of Elder Care (“Gray Gold”): Nursing homes have shifted from care-focused to profit-driven models. The article references Timothy Diamond’s book Making Gray Gold, which describes how elder care became a marketable commodity, prioritizing financial gain over resident well-being. For you, this means some facilities may cut corners on staffing, resident meals, supplies, or services to boost profits, potentially leading to neglect, medication errors, or infections.

• Private Equity’s Aggressive Expansion: Private equity firms are increasingly acquiring nursing homes, using complex financial strategies like inflated service fees or property leasing to extract wealth. These practices often reduce resources for care, resulting in understaffing and substandard conditions. For seniors, this translates to a higher risk of harm in facilities owned by such firms, as seen in cases like the 2018 bankruptcy of HCR ManorCare, where care quality plummeted under private equity ownership.

• COVID-19’s Lasting Impact: The pandemic exposed and worsened existing flaws, with over 200,000 nursing home deaths highlighting staffing shortages and infection control failures. For families, this underscores the ongoing risk of infectious outbreaks in facilities with inadequate staff or protocols, making safety a top concern.

• What This Means for Quality of Care: These threats increase the risk of harm in nursing homes, particularly in for-profit facilities. A 2014 Department of Health and Human Services Office of Inspector General (OIG) report found that 33% of Medicare beneficiaries in SNFs experienced adverse events (e.g., hospital readmissions, permanent harm, or death), with 59% deemed preventable due to substandard care or errors. The triple threat amplifies these risks, making it essential to carefully evaluate facilities and prioritize alternatives like aging in place. There is significant incentive for executives too; in the case of HCR ManorCare, the final bankruptcy approved a payout to the former CEO of $116 million.

Nonprofit vs. For-Profit Nursing Homes: The Ratio and Why It Matters

Nationwide, there are approximately 15,000 nursing homes, serving over 1.3 million residents. The ownership breakdown is:

• For-Profit: 70-72% (roughly 10,500-10,800 facilities), increasingly dominated by private equity, REITs, and midsize chains.

• Nonprofit: 24% (about 3,600 facilities), often run by faith-based or community organizations.

• Government-Owned: 5-6% (750-900 facilities), typically public or VA facilities.

The vast majority of nursing homes are For-Profit; you may have to work to find a non-profit in your area.                                                                                                       

Why Nonprofits Are Safer: Studies consistently show nonprofits provide better care. A 2011 LeadingAge New York study found nonprofits had fewer hospitalizations, lower antipsychotic use, and higher staffing levels. A 2020 meta-analysis estimated that nonprofit facilities have 7,000 fewer pressure sores and provide 500,000 more nursing hours daily nationwide. For-profits, especially private equity-owned, have more deficiencies and lower quality ratings, as seen in the 2018 HCR ManorCare bankruptcy, where violations soared under Carlyle’s ownership.

What This Means for You: Prioritize nonprofit facilities when possible, as they’re less likely to prioritize profits over care. However, nonprofits are harder to find, with their share dropping from 30% in the 1990s to 24% today due to financial pressures and acquisitions. Use Nursing Home Compare to filter for nonprofit status and verify during tours.

Spotting Private Equity Ownership

Private equity-owned nursing homes are riskier due to profit-driven cost-cutting. A 2023 Good Jobs First report noted that midsize private equity chains often have fines averaging over $100,000 per facility for violations. Determining ownership cab seem a daunting task, particularly when ownership is not transparently offered to individuals considering that home. Here’s how to identify such ownership:

Check Ownership Details: Use CMS’s Nursing Home Ownership Data (go to data.cms.gov for other data sets) or state licensing records to find the facility’s parent company. Private equity firms often use complex structures with multiple subsidiaries (e.g., separate entities for operations and real estate). Look for names like Portopiccolo Group or HCP, Inc., (now known as Healthpeak Properties, Inc. after a 2019 rebranding, known for private equity or real estate investment trust (REIT) ties.

Look for Related-Party Transactions: Private equity firms may contract with affiliated companies for services (e.g., therapy, staffing), charging inflated fees that drain resources. Ask the facility for a list of contracted services and their providers. If multiple services come from related entities, it may signal profit extraction.

Research Recent Ownership Changes: Facilities that changed hands between 2016 and 2021 (over 20% of U.S. nursing homes) are more likely to be private equity-owned. Check news reports or Ziegler Investment Banking data for recent acquisitions. A 2024 KFF Health News article noted that 900 nonprofit nursing homes were sold to for-profit operators since 2015, often to private equity or REITs.

Ask Directly: During tours, ask administrators about ownership structure and whether the facility is part of a for-profit chain or investment group. Be wary of vague answers or reluctance to disclose.

Choosing Safer Nursing Homes: Key Steps

If institutional care is necessary, selecting a safer facility is critical. Here’s how to navigate the process:

Evaluate Staffing Levels: Staffing is the strongest predictor of care quality. Check the facility’s nurse-to-resident ratio on Nursing Home Compare. CMS’s 2024 minimum staffing rule requires 3.48 hours of direct care per resident day (including RNs and aides). Avoid facilities with frequent staff shortages, as these are linked to higher rates of infections and falls. Ask about staff turnover rates during tours—lower turnover suggests better working conditions and care consistency. Check to make sure that there is at least one RN on staff 24 hours each day.

Investigate Infection Control: Post-COVID, infection prevention is crucial. Ask about the facility’s infection control protocols, vaccination rates, and history of outbreaks. A 2024 OIG report found that 24% of for-profit SNFs failed to meet infection preventionist staffing requirements, increasing risks.

Tour and Observe: Visit potential facilities repeatedly, unannounced, if possible, at different times to observe cleanliness, staff responsiveness, and resident well-being. Red flags include unanswered call bells, unclean rooms, or residents appearing neglected (e.g., unassisted with meals or hygiene). Observe whether staff members know the names of residents and each other. Speak with residents and families about their experiences.

Assess Meal Quality: Nutrition is vital for your loved one’s health and well-being in a nursing home, yet some facilities, may cut costs by offering bland, repetitive meals. When evaluating a facility, visit during mealtime, spend time in the dining room, and request to sample a meal. Inquire about options for dietary needs, such as vegetarian, kosher, heart-healthy, or diabetic diets, and ask residents if they enjoy the food. A high-quality nursing home will confidently demonstrate its dining experience, prioritizing flavorful, nutritious meals tailored to residents’ needs. Poor-quality, unappealing food lacking variety can lead to malnutrition, mental decline, and serious health issues, diminishing your loved one’s quality of life. Choose a facility that invests in its dining program to ensure both health and happiness.

Review Inspection Reports: State inspection reports, available via Nursing Home Compare or state health departments, detail violations. Avoid facilities with repeated or severe deficiencies, such as failure to prevent pressure ulcers or medication errors.

Consider and Compare Costs, Expenses, and Fees: When considering a nursing home, meet with the admissions office to thoroughly review costs, fees, and expenses; lack of transparency can lead to unexpected financial burdens. Candor and transparency might reveal the home as less concerned with "getting a contract and starting billing" and more concerned with a transparent, cooperative, mutually rewarding relationship. Request a detailed, written breakdown of costs before deciding, clarifying what’s included in the base price and which services (e.g., therapy, specialized care) incur extra fees. Discuss Medicaid coverage with the facility’s social worker, even if it’s not immediately needed; some facilities guide families through the application process, potentially saving thousands in legal fees, while others offer little or no support. Inquire about policies for scenarios like hospitalization or hospice care, as these can trigger additional costs. 

Many families are unprepared for the complexity of long-term care financing, and facilities may not fully disclose fees upfront. Medicare and Medicaid often don’t cover all services, and some facilities may not accept both programs, leaving families to face out-of-pocket expenses, disputes, or even discharge. Proactive planning, including exploring Medicaid asset protection with an elder law attorney, can safeguard your finances and ensure your loved one’s care.

Use Multiple Rating Tools: Start with Medicare’s Nursing Home Compare to review a facility’s star rating (1-5 stars) based on health inspections, staffing, and quality measures, but recognize its limitations; you can read multiple articles about the these limitations and weaknesses by selecting the label "Nursing Home Compare" at the lower right of this page (or simply click on the link to perform the search). Complement it with: 

• U.S.N&W.R.:  U.S. News & World Report’s Nursing Home Ratings evaluates nearly 15,000 nursing homes annually, rating them for short-term rehabilitation and long-term care based on CMS data but with a proprietary methodology that emphasizes outcomes like rehospitalization rates (ideally below 20%) and resident satisfaction.

• NusingHome411: NursingHome411’s Problem Facilities Dataset, sponsored by the Long Term Care Community Coalition, this rating service and dataset flags Special Focus Facilities and one-star homes, often for-profits. Use this tool to avoid low performers.

• State-Specific Tools: Many states host their own alternatives to the federal CareCompare, some simply reporting CareCompare information, but many providing more granular data for specific homes in that state.  State-specific tools like Minnesota’s Nursing Home Report Card or Massachusetts’ Survey Performance Tool offer local insights. These alternatives provide a fuller picture of care quality, and align with the need to prioritize nonprofits, offering potentially better outcomes.

• Ohio Nursing Home Quality Navigator: Offers a searchable map, CMS star ratings, staffing stats, resident satisfaction, and violation counts for Ohio’s 960 nursing homes.

• Ohio Long-Term Care Consumer Guide: Offers inspection summaries, satisfaction surveys, and costs, ideal for nonprofit comparisons (24% of facilities, 7,000 fewer pressure sores).

• Missouri DHSS Facility Search: Delivers detailed inspection reports and deficiencies for 1,111 facilities, helping identify risky for-profits.

These tools help prioritize nonprofits and high-quality homes.

Leverage User Reviews: Check the name of a home or institution against the Blog for the National Association to Stop Guardianship Abuse.  The Blog has a convenient search tool, and is one of the most comprehensive sources for news about nursing home cases of abuse and neglect.  Check Yelp, Facebook, or similar platforms for resident and family feedback or stories on staff responsiveness and care quality, but cross-reference with data-driven tools due to potential bias.

Monitor Consumer Feedback and News: Check X for resident/family posts using hashtags like #NursingHomeAbuse or #ElderCare. In Ohio, I was able to identify posts describing lawsuits against Majestic Care of Fairfield (March 2025) regarding alleged staffing-related deaths, and a Warrensville Heights death (January 2025), exposing monitoring failures. In Missouri, one-star Kansas City homes (March 2025) face abuse citations, and a 2024 report noted unnecessary confinement of mentally disabled residents. On the other hand, nonprofits like Friends Care Community, Ohio, earn praise on X for resident satisfaction. These are, of course anecdotal, and like all social media subject to bias, misinformation, misunderstanding, and misattribution. In some cases, though, you may find information critical to your decision.

Beware of Guardianship Abuse: Even if unnecessary you should ask the nursing homes how it handles guardians and conservators, and whether it has an affiliated entity that can serve as a guardian or conservator if needed.  You should ask what percentage of its residents have court appointed guardians/conservators.  Some nursing homes have made guardianship a separate business. For-profit nursing homes may exploit guardianship petitions to collect debts or secure Medicaid payments, overriding valid Powers of Attorney (POAs) or family wishes. A 2024 report noted New York facilities coercing payment through guardianship, costing families up to $10,000 in legal fees.  Facilities may refer petitions to attorneys or nonprofit “guardianship mills,” not formal subsidiaries, to manage finances, but this practice—seen in 12% of Manhattan cases (2002-2012)—is profit-driven, and not resident-focused.  Be wary if the institution has a close relationship with a guardianship business or non-profit, particularly if it is directly affiliated with the nursing home.  A nursing home that prefers working with court-appointed guardians and conservators is possibly a threat to your independence and decision-making, and a possible threat to family directed care and financial management.

   

Choosing Safer Nursing Homes: What to Avoid

Don't Overestimate the Value of Proximity- While proximity is often a top priority for seniors and families selecting a nursing home—wanting a facility close to the senior’s home or a family member’s residence—it shouldn’t overshadow care quality. Being nearby makes it easier to visit and monitor your loved one’s treatment, but a closer facility with frequent lapses in care, such as injuries, staff conflicts, or resident disputes, can lead to more unexpected trips and stress, reducing meaningful time with your loved one. A higher-quality nursing home, even if farther away, may require a longer drive but offer better care, fewer emergencies, and more rewarding visits. Balance proximity with quality to ensure your loved one’s safety and well-being.

Avoid Crisis Decision-making: When a parent or loved one’s Medicare hospital benefit nears its end, families often face intense pressure to find a nursing home quickly, tempting them to settle for the first available bed. This crisis-driven approach can lead to choosing a facility with substandard care, especially in for-profit homes influenced by private equity or REITs where quality may suffer. Instead, plan ahead while your loved one is healthy, researching and shortlisting high-quality, preferably nonprofit facilities. Alternatively, explore options at the onset of a hospitalization or a chronic condition diagnosis. By proactively evaluating choices, you can avoid risky “last resort” facilities and ensure safer, more compassionate care.

Look Beyond the Surface- Don't Be Fooled By Appearance: When selecting a nursing home, don’t be swayed by appearances alone. A sparkling new facility with elegant decor and cutting-edge technology may catch your eye, but true quality lies in the care provided. Older, less glamorous nursing homes with low patient-to-staff ratios, dedicated staff, and a genuine commitment to residents often offer safer, more compassionate care than luxurious but poorly managed homes. Fancy furnishings and white linen tablecloths mean little if a facility is overcrowded or understaffed. While modern infrastructure is a one-time investment (plus ongoing maintenance), quality staff, effective management, and continuous training are daily expenses that profit-driven facilities might skimp on. Focus on the bigger picture—prioritize the care your loved one will receive over superficial charm.

Why Plan to Age in Place

The triple threat underscores why avoiding institutional care through aging in place is a smarter strategy. Here’s why and how to plan:

Lower Risk of Harm: Nursing homes carry inherent risks, with 20-23.5% of Medicare patients rehospitalized within 30 days, often due to preventable issues like infections or medication errors. Home-based care reduces exposure to institutional risks, as shown by Medicare’s Independence at Home program, which cut hospitalizations and saved $2,700 per beneficiary annually.

Better Quality of Life: Aging in place allows seniors to stay in familiar surroundings, maintaining independence and emotional well-being. The Nonprofit Quarterly article emphasizes amplifying resident voices, which is easier at home with family or caregiver support.

Cost Savings: Nursing home care is expensive, averaging $8,700/month for a semi-private room (2024 NPR report). Medicaid covers costs for eligible seniors but requires depleting assets, threatening family legacies like farms or homes. Home care, while not cheap, can be more affordable with Medicare home health benefits or long-term care insurance.

How to Plan To Age in Place

Legal Planning: Work with an elder law attorney to create an Aging in Place Planning Trust and/or Medicaid Asset Protection Trust or update your estate plan from a simple will or simple probate avoidance revocable trust to state your wishes, and protect your assets and decision-making. Powers of attorney and advance directives for health and dementia help ensure your care preferences are honored.

Home Modifications: Install grab bars, ramps, or stairlifts to make your home safer. A certified aging-in-place specialist can assess needs.

Care Coordination: Explore home health aides or telehealth services (e.g., virtual care hubs like Good Samaritan’s 2022 initiative) to manage medical needs. Medicare covers skilled home health for qualifying conditions.

Financial Planning: Purchase long-term care insurance early (ideally in your 50s-60s) to cover home care costs. Budget for private-pay caregivers if needed.

Community Support: Engage family, friends, or local senior services (e.g., Area Agencies on Aging) to build a support network, reducing reliance on institutional care.

Additional Considerations

Advocacy and Oversight: The Nonprofit Quarterly article suggests advocating for stronger regulations and ombudsman programs. Families should connect with Long-Term Care Ombudsmen (available in every state) to report concerns or monitor facility quality. Joining resident or family councils empowers you to demand better care.

Medicaid Funding Gaps: Low Medicaid reimbursement rates strain facilities, especially for-profits, leading to closures or quality cuts. Support policies increasing Medicaid funding to improve care options.

For-Profit Risks: Beyond private equity, for-profit chains like Skyline Healthcare (bankrupt in 2018) have left residents stranded. A 2024 CBS News investigation found neglect patterns in for-profit facilities, with cases like a 92-year-old left alone and injured. Scrutinize for-profit facilities, especially midsize chains with opaque ownership.

Conclusion: Plan Smart, Stay Safe

The triple threat—commodification, private equity, and COVID-19’s fallout—has made nursing homes riskier, particularly for-profit facilities, which dominate 70-72% of the market. For seniors and families, this means, in the worst case, prioritizing nonprofit facilities, thoroughly vetting ownership, and checking staffing and quality metrics before choosing a nursing home. The safest and most fulfilling option is to plan for aging in place, leveraging legal, financial, and home modifications to stay independent. By working with elder law professionals and exploring home-based care, you can avoid the risks of institutional care and protect your health, assets, and legacy.

For personalized guidance, contact our office to discuss aging in place planning, Medicaid planning, long-term care options, or home safety assessments. Visit Medicare.gov for facility comparisons, and reach out to your state’s Long-Term Care Ombudsman for support. Your future deserves careful planning—start today.