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Say Goodbye to Forced Arbitration

Written July 26, 2017

Things are about to get a whole lot easier. For you. For your family. When the time comes to find a suitable home for an elderly loved one, every little thing that makes that process simpler, better, and hassle-free is appreciated. It can be an incredibly stressful time.

And now, you no longer have to worry about forfeiting your legal rights in exchange for quality care.

Last month, the Department of Health and Human Services (HHS) through the Centers for Medicare and Medicaid Services (CMS) ruled that every nursing home receiving federal funds can no longer insert forced arbitration clauses in their admission contracts or agreements.

This is very good news, and it affects over 1.5 million residents, and 15,000 facilities across the country. Any home still insisting on an arbitration clause will lose their share of the $1 trillion in annual funding after the new regulation takes effect on November 28, 2016.

The Two Sides of Arbitration

The use of forced arbitration is not limited to the nursing home industry. It’s widespread and common in the financial sector, telecommunications, employee contracts, and more.

Those in favor of it point to reduced legal costs that help to keep the cost of the service itself down. They claim arbitration offers a faster, less complicated process that anyone can use.

On the other side of the argument, though, people believe that arbitration usually favors the defendant, and it makes it difficult if not impossible for any measure of accountability. Arbitration hearings are often private, and the decision of the arbitrator is confidential. Adding insult to injury, the average arbitration award is 35% less than if the case had gone to court according to a 2009 study.

Officials in 16 states and D.C. have been pushing to forbid the clauses in nursing home contracts for some time now, saying they can hide patterns of wrongdoing, neglect, and abuse from the public, prospective residents, and their families.

The New Regulation

The CMS has released over 700 pages of new regulations, guidelines, and suggestions on a wide range of topics that affect nursing home residents. The new rule against arbitration is just one of many.

A spokesman for the American Healthcare Association said the rule from the agency clearly oversteps its bounds, calling it a “wholly unnecessary” decision. They are currently considering their options, which may include a legal challenge in court.

The new arbitration rule is scheduled to go into effect on November 28 and will impact all new admissions on and after that date.

Those already in a facility may want to review their current agreement, and if you find an arbitration clause, you could ask the care facility to either renegotiate or remove it.

In some cases, you might consider moving to a different care facility in order to sign a new contract without the clause. Please do remember, though, that finding an available bed somewhere else could prove difficult, and the upheaval of changing home and leaving friends may be traumatic for your elderly family member. It’s not a decision to be made lightly or quickly.
After November 28, arbitration is still available, but residents and family will have the right to say no and opt for a traditional lawsuit.

Depending on the situation, an arbitration hearing may actually be the best route forward. The Long-Term Care Ombudsmen Program operates in each state to assist in disputes.

Selecting a nursing home is never easy. It must be safe, secure, comfortable, and look after all needs…physical, mental, and emotional.

But you should also find out what recourse you have in the event of neglect, abuse, or injury. Forced arbitration clauses can tie your hands and leave you vulnerable. The CMS ruling is a welcome and fair decision.

You should never have to choose between legal rights and quality care. You and your family deserve both.

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