Belsky Weinberg & Horowitz, LLC A Personal Injury & Workers’ Compensation Law Firm

Ban on forced arbitration restores the right of nursing home residents to sue

Federal agency ruling benefits 1.5 million elderly

Arbitration can be a good option for resolving legal disputes. At many nursing homes, it is the only option. The fine print of care contracts prevents patients and their families from bringing lawsuits for fraud, injuries, abuse or wrongful death. Their only recourse is arbitration, which is binding and private. Nursing home owners say this helps them control costs. Critics say it helps providers avoid accountability.

In September, the federal Department of Health and Human Service ruled that nursing homes receiving federal funds cannot mandate forced arbitration. Since more than 70 percent of nursing home residents qualify for Medicaid or Medicare, the ban affects the vast majority of the 1,500 nursing homes across the country. For now, the rule applies only to new admissions, not existing nursing home contracts.

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Patients and families deserve their day in court.

Nursing home corporations, credit card companies and other industries have embraced forced arbitration clauses because it decidedly benefits them:

  • Arbitration is typically quicker and less costly than the court system.
  • By preventing lawsuits and class actions, nursing homes are not subject to large verdicts from sympathetic juries.
  • Arbitrator rulings are rarely overturned on appeal because both parties "agreed" to abide by the decision.
  • Because arbitration proceedings and rulings are private, nursing homes avoid the adverse publicity and regulatory scrutiny. As a result, management is not truly held accountable to residents or to the public for accidents, elder fraud, medical malpractice or nursing home abuse and neglect.

The HHS ruling takes effect in November. It remains to be seen whether any action will be taken to address the countless contracts already in force that dictate private arbitration as the exclusive remedy. Nonetheless, this is a victory for the 1.5 million elderly in nursing home care in the U.S.

Arbitration is not a bad thing unless it's the only thing.

Until now, spouses and families were over a barrel. They could avoid certain elder facilities but could not avoid mandatory arbitration clauses. The right of the aggrieved to sue for damages is an important component of our civil justice system, and it has thankfully been restored for one of the most vulnerable populations. Some families will still resolve their nursing home disputes through arbitration -- but because they choose to and not because they have to.

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