Kansas Association of Defense Counsel - THE EXPANDING USE OF BINDING ARBITRATION AGREEMENTS IN NURSING FACILITIES (AND OTHER HEALTH CARE PROVIDERS) - Legal Letter Summer-2004 Number 3

Sep 15, 2026

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Legal Letter (Summer-2004, Number 3) for the Kansas Association of Defense Counsel presents two linked legal discussions. The primary article analyzes arbitration agreements in nursing facilities, focusing on Kansas Uniform Arbitration Act limits for tort claims and the potential for Federal Arbitration Act preemption when agreements evidence a transaction involving commerce. A second article addresses Kansas class certification standards, explaining the tension between rigorous analysis and the Eisen rule, and summarizing the Kansas Supreme Court’s clarification in Dragon v. Vanguard Industries.

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Pages5

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THE EXPANDING USE OF BINDING ARBITRATION AGREEMENTS IN NURSING FACILITIES (AND OTHER HEALTH CARE PROVIDERS)

I. INTRODUCTION

II. STATE AND FEDERAL ARBITRATION STATUTES

A. Kansas Uniform Arbitration Act

Kansas Supreme Court Clarifies Class Certification Standards

KADC Summer-2004 Number 3 Legal Letter Kansas Association of Defense Counsel THE EXPANDING USE OF BINDING ARBITRATION AGREEMENTSIN NURSING FACILITIES (AND OTHER HEALTH CARE PROVIDERS). By Greg Young and Brian White I. INTRODUCTION. The use of arbitration agreements has grown in recent years, and with the growing support of the courts, this trend is likely to continue. The use of arbitration as an alternative to trial is seen to have many advantages. In fact, the Supreme Court has pointed out several of its advantages, including it is cheaper and faster than litigation, it can have simpler procedural and evidentiary rules, it normally minimizes hostility, and it is often more flexible in regard to scheduling of times and places of hearings and discovery devices.1 These advantages are equally applicable in the nursing facility industry, or other expensive and time consuming litigation businesses, where disputes arise between nursing home facilities and their residents. Given the increasing costs of nursing home litigation, the use of arbitration agreements has become more and more prevalent in nursing facility settings and other business enterprises. Unfortunately, there are many pitfalls that can potentially render an arbitration agreement unenforceable. While the pitfalls are plentiful and largely relate to the law of construction of contracts, this article will focus on two potential pitfalls in the nursing home setting. First, as will be discussed below, the Kansas Uniform Arbitration Act prohibits the enforcement of arbitration agreements for tort claims. This obviously is a major road block to nursing facilities who wish to arbitrate all disputes with their residents, including torts. Fortunately, the Federal Arbitration Act (FAA) will preempt this Kansas prohibition, if the nursing facility residential agreement, which includes the arbitration provision, is “a contract evidencing a transaction involving commerce.” As such, one area of focus in this article will be what is needed to meet the “involving commerce” requirement of the FAA so that the tort prohibition provision of the Kansas Act is preempted. A second area of focus in this article will be avoiding a finding that the arbitration agreement is unconscionable, and, therefore, unenforceable. Nursing facility arbitration agreements appear to be more susceptible to a finding of unconscionability as they usually involve elderly individuals who are Brian White (left), Greg Young (right) Hinkle Elkouri Law Firm L.L.C. often in need of immediate care or assistance (with few options) and the agreements are usually considered contracts of adhesion. Before we examine these two issues, however, a review of the Kansas Uniform Arbitration Act and FAA provisions will be instructive. II. STATE AND FEDERAL ARBITRATION STATUTES. A. Kansas Uniform Arbitration Act. Under K.S.A. 5-401(b), “a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable except upon such grounds as exist at law or in equity for the revocation of any contract.” There are, however, several major exceptions to this general rule, including and most important to this article, an arbitration provision will not be valid in any contract providing for arbitration of a tort claim.2 The Kansas Uniform Arbitration Act provides some procedures and requirements for the actual arbitration process which should be examined when drafting and or using an arbitration agreement. These basic requirements, including a provision for the appointment of arbitrators and procedures for awarding and challenges damages, are to be followed unless otherwise agreed. While these specific procedures will not be discussed in this article, it should be kept in mind that the Act allows the parties to mold their arbitration process as they see fit through their arbitration agreement. (Continued on page 3) Inside this issue

FAQs

Why are arbitration agreements increasingly used in nursing facility disputes?

The document explains that arbitration can be cheaper and faster than litigation, with simpler procedures and evidence rules, reduced hostility, and flexible scheduling for hearings and discovery. It also notes rising nursing home litigation costs as a driver of broader use.

What is the key Kansas limitation on enforcing arbitration agreements for tort claims?

The Kansas Uniform Arbitration Act generally permits arbitration provisions but includes an important exception: arbitration provisions are not valid for contracts requiring arbitration of tort claims. The document highlights this as a major obstacle for nursing facilities.

How can the Federal Arbitration Act (FAA) preempt the Kansas tort-arbitration prohibition?

The document states that the FAA can preempt the Kansas prohibition if the nursing facility’s residential agreement, including the arbitration provision, is a contract evidencing a transaction involving commerce. It emphasizes the need to meet the FAA “involving commerce” requirement.

Sep 15, 2026

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