CMS Bans the Use of Forced Arbitration Agreements in Nursing Homes

On Sept. 28, the Centers for Medicare and Medicaid Services (CMS) of the Department of Health and Human Services issued a regulation banning the use of forced arbitration agreements by nursing homes that receive Medicare and Medicaid funding.

The change is the most significant overhaul of the agency’s governing of federal funding for nursing homes in more than 20 years.

It promises to deliver significant protections to approximately 1.5 million nursing home residents by preventing nursing homes that receive federal funding from requiring residents resolve disputes through private arbitration rather than in court.

The current system has prevented nursing home residents who have suffered abuse, sexual harassment, wrongful death and various forms of neglect from getting the justice they deserve through a trial by jury.

Reestablishing a Fundamental Right

For years, forced arbitration clauses have been included in the fine print of nursing home admissions contracts, forcing residents to give up their rights in order to get the care that they need. Many do not realize what they are signing.

When disputes arise about issues with quality of care and safety, arbitration agreements push them out of the public view as the details and the outcome of the case are confidential and not public record.

In a yearlong investigation into the use of arbitration agreements, The New York Times found that the proceedings have little resemblance to those in the courtroom and that many arbitrations are conducted in the offices of lawyers who have been hired to represent the nursing home that has been accused of wrongdoing.

The CMS originally proposed the rule in July 2015. That initial version was aimed at improving disclosure and planned to cut funding to nursing homes that required arbitration agreements as a condition for admission into a facility.

With urging from officials in 16 states and the District of Columbia, the agency took its plan a step further toward holding nursing homes accountable for wrongdoing and issued its final ruling.

The rule is scheduled to go into effect on Nov. 28, 2016.

As staunch advocates and defenders of the rights of nursing home residents, the nursing home abuse attorneys at PKSD have long supported the ban of nursing home arbitration agreements.

We remain committed to fighting for the rights of those who have been abused or neglected in nursing homes and will fight for the justice and compensation your loved one deserves if she or he has suffered in a nursing home.

Call 414-333-3333 to learn more about how we can help you.