Frail nursing home residents and their stressed family members are routinely asked to sign a stack of densely-printed documents at the time of admission, without adequate time to review them or consult with counsel. They often do not realize that the agreements include binding arbitration provisions. Although this might sound benign, arbitration requires a waiver of the fundamental constitutional right to a jury trial, even if the resident later suffers serious injury, medical malpractice, or wrongful death. Under a new federal rule, facilities that receive federal funding from Medicare or Medicaid (i.e., virtually all of the nation’s nursing homes) will be prohibited from requiring such waivers, either as a condition of admission to or the right to remain in the facility. The rule, announced by the federal Center for Medicare and Medicaid services, takes effect on November 28, 2016, and will protect about 1.5 million residents nationwide, regardless of their source of payment. It provides that facilities are prohibited from entering into any agreement for binding arbitration until after a dispute has arisen. If the facility does ask residents to enter into an arbitration proceeding once a dispute has come up, the facility must ensure that the agreement is explained to residents or their legal representatives in a “form and manner” that they understand.
Although the nursing home industry has argued that arbitration helps reduce legal costs, there is no good reason for residents to voluntarily agree in advance to waive their rights to a jury trial: alternative dispute resolution is always an option once a dispute has arisen if the parties agree.
The practice of forced arbitration has had the effect of denying residents and their family members access to justice. Because arbitrations are confidential and there is no record of the outcomes, the arbitration requirement has kept issues of abuse and neglect out of the public eye.
Although the new rule is likely to be challenged in court by the nursing home industry, advocates for nursing home residents welcome this new development. At the very least, it will help to educate residents and their families about the prevalence and risks of arbitration, and to exercise their right to “just say no” to arbitration clauses in admission agreements.
