Government Bans Mandatory Arbitration Clauses in Nursing Home Contracts

On September 28, 2016, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services issued a new ruling that would prevent nursing homes that receive federal funding from forcing its residents to resolve disputes through binding arbitration. The ruling already took effect on November 28, 2016.

It has long been common practice among nursing homes to require new residents and their families to sign away any rights to take the facilities to court, often without fully realizing it. Such waivers are typically buried in the large stacks of new paperwork that are all too familiar to anyone who has placed a loved one in a nursing facility. Once you sign, your only remedy to resolve any future dispute, including in cases of nursing home abuse and wrongful death, is through binding arbitration.

What is binding arbitration, and how may it already be affecting you? In addition to nursing home contracts, mandatory arbitration clauses are also buried in the fine print of contracts for employment, cell phones, credit cards, retirement accounts, and other everyday agreements. When you sign these contracts or even buy these products, you waive your right to take these companies to court, to remedy even very serious disputes with the help of a judge and jury.

Instead, all disputes must be presented to and decided by arbitrators, private individuals hired by the companies themselves (which just might present a conflict of interest). The decisions of these arbitrators are not bound by state or federal law, and they are usually final, with no possibility for appeal.

At least in the American nursing home industry, however, this unjust practice looks to be coming to an end. The Centers for Medicare & Medicaid Services is America’s largest long-term care payer, with approximately 64% of nursing home residents covered by Medicaid and approximately 14% covered by Medicare, an estimated 1.5 million beneficiaries.

Because of this ruling, none of the more than 15,000 nursing home facilities caring for Medicare and Medicaid beneficiaries will be able to force new residents to enter binding arbitration agreements before disputes arise.

This new policy will help all entering residents at these newly-compliant facilities, even those without Medicare and Medicaid coverage, allowing them to take cases of elder abuse, neglect, and wrongful death to court, where they can be judged by independent juries, not arbitrators employed by the nursing homes themselves.

The decision was praised by the American Association for Justice, a national trial lawyers association, which issued a statement that the days of nursing home facilities using binding arbitration agreements “to evade accountability and force residents and their families into signing away their legal rights are nearing an end.”

If your loved one has suffered from abuse or neglect while staying in a nursing home or assisted living facility, you need an experienced and dedicated attorney to fight for you. The nursing home abuse attorneys at GWC Injury Lawyers are an excellent choice because they have decades of experience and success in cases exactly like this.

GWC prosecutes a wide variety of injury cases throughout Illinois, including those involving nursing home abuse, auto accidents, workers’ compensation, construction accidents, and medical malpractice. If you or your loved one has been injured, because of nursing home abuse or some other means, please contact our office for a free legal consultation to see if you may be eligible for financial compensation for your injuries.