A new rule from the federal Centers for Medicare & Medicaid Services is designed to stop nursing homes from forcing residents to settle disputes through arbitration rather than the courts. In recent years, most nursing home admissions contracts have included “predispute binding arbitration clauses,” which require consumers to agree to arbitration before a dispute arises. These agreements make it almost impossible for residents or their families to sue nursing homes in court even when residents fall victim to elder abuse or wrongful death.
Nursing homes argue that this arbitration system lets both sides avoid the high costs of lawsuits. But while there is nothing wrong with arbitration when both sides desire it, it puts residents and their families on very unequal footing when nursing homes demand it. Often nursing homes get to choose the arbitrators, for example. The new rule…
- Applies only to facilities that receive federal funds from Medicare and/or Medicaid. A small number of nursing homes do not accept federal funds and can continue requiring arbitration.
- Applies only to nursing homes, not to assisted-living facilities or other types of long-term-care facilities.
- Is being legally challenged by the American Health Care Association. The rule could be delayed or reversed if this challenge is successful.
What to do: Before signing, examine any mention of arbitration in the admission agreement of any type of care facility that you are considering. If you find such a mandatory predispute arbitration clause, cross it out before signing the contract. Though facilities often imply that no one is admitted without agreeing to predispute arbitration, they may not challenge someone who pushes back.