Nursing Homes Can No Longer Require Mandatory Arbitration

In what is being heralded by the New York Times as the most significant overhaul of rules for funding of long-term care facilities in over two decades, the Centers for Medicare and Medicaid Services (CMS) has ruled that nursing homes receiving funding from Medicaid or Medicare cannot require mandatory arbitration clauses.

After decades of conflict over mandatory arbitration clauses from nursing homes, this ruling restores legal rights to residents and their families, meaning that they can once again rely on their right to a day in court if a dispute arises. Read on to learn more about the CMS ruling and what it could mean for your family. If you have questions, contact MedMalFirm.com to speak with one of our nursing home abuse attorneys.

A Review of Mandatory Arbitration

Mandatory arbitration clauses are often stuck in the fine print of nursing home contracts or residential agreements.  However, residents and their families may not understand exactly what that means.  To put it simply, mandatory arbitration eliminates their right to file a lawsuit against the nursing home if abuse or neglect, or criminal activity occurs.

Mandatory arbitration clauses also result in safety and quality issues being hidden from families, the public, and the legal system.  What may have been originally intended as a means of reducing legal costs has actually resulted in a great deal of hardship and loss for nursing home residents and their families.

Problems with Mandatory Arbitration

There are a few significant problems with mandatory arbitration:

1. Without the protections of a formal legal process, arbitration can result in free-for-all battles that are not easily resolved in a mutually beneficial manner.
2. Many companies requiring arbitration choose their own arbitrator, which may be biased or even paid to side with the company.
3. In arbitration there is no requirement for rules of evidence like lawsuits, which can leave a gap between what is said and what actually happened.

Also, many nursing home residents may not fully understand what the clause means, or worse, may not even be aware that they signed such a clause.

In recent years, courts have struggled to overturn arbitration clauses due to the outcomes of Supreme Court cases.  Those cases upheld mandatory arbitration clauses when questions of illiteracy and ability to physically understand, or sign, the agreement are raised.

Examples of Mandatory Arbitration Consequences

When mandatory arbitration is required, nursing home residents and their families can find it extremely difficult to protect their rights and pursue justice.  A few of the most striking examples of the consequences of mandatory arbitration are:

• The case of a 100-year-old woman who was murdered by her roommate.  Her case was blocked from court due to a mandatory arbitration clause, thus prohibiting her family from filing a lawsuit.
• The case of a 94-year-old woman who suffered a fatal head wound in a nursing home.  The wound was not properly treated and festered, leading to her death.  Due to a mandatory arbitration clause, her family also was not able to file a lawsuit for negligence or abuse.
• The case of a woman who was sexually assaulted by fellow nursing home residents, where the state Department of Health ruled that the nursing home did not protect her.  The family tried to sue the nursing home but were blocked by a mandatory arbitration clause, and the nursing home continued to operate without negative consequences.
• The case of an 83-year-old woman who died with 20-times the recommended dose of diabetes medicine Metformin in her system.  After being forced into arbitration, the family was faced with only an acknowledgement of the blood test and autopsy results, but the arbitrator ruled in favor of the nursing home, with no justice for the life lost.

Arbitration, by its definition, means no jury heard the facts of any of these cases.  Without a jury to hear testimony and review evidence, the fate of justice rests in the hands of an individual who may or may not have the best interests of all parties involved at heart.

This New Ruling Restores Legal Rights

Nursing homes across the United States are provided with over $1 trillion in Medicaid and Medicare funds.  These funds are distributed to nursing homes housing roughly 1.5 million residents.  After 34 officials across 16 states began urging the federal government to cut funding for nursing homes using mandatory arbitration, the governing agencies could no longer avoid taking action.

The new ruling set to ban mandatory arbitration among federally-funded nursing homes is scheduled to take effect in November of 2016.  It will only apply to future admissions.  As of now, current nursing home residents will not be “grandfathered” into the new program.  Unfortunately, that leaves a great many nursing home residents still at risk.

Advocates for Mandatory Arbitration Fight Back

Advocates for nursing homes have responded to the ruling with arguments that the ruling is “wholly unnecessary” and “clearly exceeds” the authority of the Centers for Medicare and Medicaid Services.  Opponents to the new ruling may have the opportunity to challenge it in court, but it is noted that the rule does not require Congressional approval, and will continue to take effect in unless it is successfully challenged.

What the Ruling Means for Nursing Homes

Nursing homes are legally required to provide quality care that is in accordance with medical standards and applicable laws.  Unfortunately, clauses like mandatory arbitration help to hide wrongdoing and prevent nursing home residents from defending their own legal rights. With the new ruling in place, families can rest a little easier knowing that their loved ones will be able to take legal action against a nursing home if abuse or neglect occurs.

If you have questions about how CMS rules could impact you or your loved ones, or are concerned about nursing home abuse, contact MedMalFirm.com. Our attorneys are skilled in nursing home abuse, medical malpractice, and other cases involving healthcare negligence. We can help you ensure that your legal rights are protect. To request a free consultation, fill out our online form or call us toll free at 877-887-4850.