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In June, the Trump Administration proposed a new rule that would allow nursing homes to require residents to sign arbitration agreements as a condition of admission to a facility: either sign it or find somewhere else to live.

If a nursing facility or long-term care facility is found negligent in their care of a resident, most likely the resident signed the facilities standard admission contract, which includes a pre-dispute binding arbitration agreement.  The arbitration agreement surrenders the residents Seventh Amendment right to trial by jury and any right to bring a civil suit against the long-term care facility, for any reason and at any time in the future.

More than a million elderly Americans most likely have signed away their rights to sue due to medical neglect and/or malpractice.  An estimated 90% of large nursing home chains in the U.S. ask residents or their legal guardians to sign arbitration agreements in their admission contracts.  A mandatory arbitration clause in a resident’s contract requires residents to waive their rights to sue the nursing facility.  Instead of a judge or jury hearing a case, a private arbitration firm assigns an arbitrator to decide the outcome.  People who sign arbitration agreements often don’t even realize what they’ve done.

The American Health Care Association (AHCA) which represents 13,500 nursing homes and long-term care facilities, have been particularly aggressive in its opposition to proposed rules and legislation that would limit the scope of arbitration.  In the past decade, the association has spent nearly $26 million lobbying members of the Senate and House as well as federal agencies on arbitration and other issues.  One of the reasons is arbitration monetary awards are smaller when decided by an arbitration compared to a trial outcome.

Consumer disadvantages to arbitration:

  • Consumers may have to travel far to attend arbitration proceedings.
  • The facility that imposed arbitration in the contract may be allowed to also choose the arbitrator.
  • Arbitrators are not required to issue written decisions.
  • Grounds for appealing an arbitrator’s decision are extremely limited.

More than 1,000 comments were filed with Centers for Medicare and Medicaid Services (CMS) about this proposed regulation, most opposing the rule. CMS has not indicated how long it will take to review the comments and when a final regulation might be issued.

Sources: AARP and the November 27/December 4, 2017 Time Magazine.

(image description: a partial document titled Arbitration Agreement. Agreement by and between (blank space) of (blank space) of (blank space) with a pen laying on the document)

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