New Proposal Lifts Ban on Forced Arbitration in Nursing Homes

Posted on behalf of Jeff Pitman on June 14, 2017 in Nursing Homes and Elder Rights
Updated on February 24, 2022

nursing home residential admittanceEarlier this month, the Centers for Medicare and Medicaid Services (CMS) proposed reversing a controversial ruling that prohibited the use of forced arbitration in nursing homes and assisted living facilities.

The ruling, set to go into effect in November 2016, banned facilities from entering into pre-dispute arbitration agreements with residents or their representatives or requiring incoming residents to sign arbitration agreements as a requirement for admittance.

The ruling returned nursing home residents and their families the right to a fair trial with a judge and jury to settle legal disputes, like claims of nursing home abuse and neglect.

It significantly increased the legal rights of nursing home residents and was the first major update to long-term care provider requirements since 1991.

However, the ruling was quickly met with resistance from advocates of the health care and nursing home industry who claim that arbitration is a more effective method to settle legal disputes than allowing residents the option of open-court litigation.

The proposal was postponed by a federal judge in November after a lawsuit was filed by the American Health Care Association, a major nursing home trade association. The CMS said in a memo it would not enforce the ban until the suit was resolved.

Now, under new leadership and a new administration, the CMS has switched its position and proposed lifting the ban. The only provisions of the previous ruling that would be kept include:

  • Nursing homes must explain arbitration agreements to a resident or his or her representative in language that he or she would understand
  • Agreements cannot contain language that prohibits or discourages a resident or others from communicating with federal, state or local officials

The proposal would add a requirement that the facility ensure that binding arbitration agreements contain language that clearly states the intention of the arrangement and does not contain legal jargon that might confuse a resident. It also proposed requiring facilities display notices of their arbitration policy for residents and visitors to clearly see.

What is Arbitration?

Arbitration is an alternative method used to settle legal matters outside of an open-court setting. The process is conducted privately between two parties involved in a dispute through a third-party arbitrator who negotiates a resolution.

Arbitration is often favored by corporations because it eliminates an individual’s right to a fair trial by judge and jury and prevents public scrutiny. The proceedings are performed confidentially and cannot be legally accessed by anyone outside of the arrangement.

Forced arbitration has also been criticized for its partiality toward powerful institutions because it does not prevent conflicts of interest. An arbitrator who is hired by one party may be influenced by his or her paycheck and relationship with that party.

Opponents of forced arbitration have widely criticized facilities that use the process as it essentially strips away residents’ legal rights and prevents them from pursuing legal action against the facility.

Furthermore, many nursing homes purposely conceal forced arbitration within the fine print of admittance documents, making it difficult to find. Many residents may not realize what they are signing or may not understand the repercussions of such a clause.

Unfortunately, nursing home residents often agree to arbitration without an explanation as to what they have agreed to.

Contact our Nursing Home Abuse Attorneys

At PKSD, we are strongly opposed to the use of forced arbitration and any other legal process that eliminates the rights of nursing home residents.

We will continue to provide our support and legal resources to hold nursing homes accountable for any act of abuse or neglect committed toward a resident.

If your loved one has been abused or neglected in a nursing home, we will help you pursue legal action to recover the justice and compensation he or she deserves.

Do not hesitate to contact us for a free, no obligation consultation to discuss your claim. We understand the difficulties that victims of nursing home abuse and their families go through, which is why we never charge upfront for our legal services. We only require payment if we recover compensation for your claim.

Call 877-877-2228 to speak with our nursing home abuse attorneys.

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