U.S. Agency Blocks Arbitration in Nursing Home Contracts

Nursing homes house some of America’s most vulnerable populations. Residents are at risk for elder abuse and neglect, as well as medical problems. But until recently, arbitration clauses have kept the victims of assisted living facilities out of court. Now the U.S. Centers for Medicare and Medicaid Services is putting a stop to that.

Deciding to put a loved on into assisted living or a nursing home is difficult, and sometimes traumatic. When you are presented with the contract, you may just sign, not realizing you have just signed away your day in court.

The Problem with Arbitration Clauses

Many nursing home contracts contain an “arbitration clause.” This provision says that if you have a problem with the facility, you agree to take it to private arbitration instead of filing a lawsuit.

Arbitration is a private dispute resolution option. When both parties actively agree to the process, and the arbitrator, it can be faster, more efficient, and sometimes cheaper than a lengthy court battle. The American Arbitration Association and JAMS both do what they can to ensure neutrality, but it often doesn’t work. The New York Times explains:

“But in interviews with The Times, more than three dozen arbitrators described how they felt beholden to companies. Beneath every decision, the arbitrators said, was the threat of losing business.

Victoria Pynchon, an arbitrator in Los Angeles, said plaintiffs had an inherent disadvantage. ‘Why would an arbitrator cater to a person they will never see again?’ she said.”

Arbitrators see the large companies as their clients. Favorable outcomes ensure repeat business, while a ruling for an injured person could put their contract on the line.

Nursing home residents are particularly vulnerable to abuses in the arbitration process. Families often do not realize that they are agreeing to arbitration clauses contained in the nursing home contract. Then, when elder abuse, or even wrongful death cases occur, the family is stuck presenting the case before someone who may not even be a lawyer, and is often paid by the nursing home itself.

U.S. Centers for Medicare and Medicaid Services Blocks Arbitration

That’s why 34 senators from 16 states have asked the federal government to step in. On Wednesday, September 28, 2016, the U.S. Centers for Medicare and Medicaid Services, an agency within the Health and Human Services Department, issued a rule blocking funding to any nursing home that uses arbitration agreements.

The rule will affect 1.5 million new residents, providing substantial protection. It will ensure that injured residents have their day in court, and expose the industry’s poor safety and health practices to public scrutiny. In short, the arbitration ban will protect nursing home residents and their families against abuse within the system.

Dani K. Liblang is a personal injury attorney at The Liblang Law Firm, P.C., in Birmingham, Michigan. If you have been injured because of someone else’s negligence, contact The Liblang Law Firm, P.C., today for a free consultation.