Nursing Homes No Longer Allowed To Force Residents Into Arbitration Agreements

A shift in power and control has returned to those who most need it – nursing home residents and their families. In a recent ruling, the Centers for Medicare and Medicaid Services (CMS) prohibited mandatory pre-dispute arbitration agreements between federally funded nursing homes and their residents. Prior to the new ruling, many nursing homes required residents to sign an arbitration agreement which forced residents to solve any dispute that may arise between them and the nursing home outside of court. These agreements heavily favored the nursing homes and took away a resident’s power to use the court system for injuries caused by a nursing home’s wrongful conduct.

The ruling is a strong attempt to return that power back to the plaintiffs in disputes concerning nursing homes. This is especially important in cases involving negligence, elder abuse, sexual harassment, and even wrongful death. Arbitration keeps these cases out of the view of the public and often leads to much smaller rewards or settlements for those harmed by the home.

The CMS, a federal agency within the Department for Health and Human Services, controls more than $1 trillion in Medicare and Medicaid funding. They passed the rule after 16 different states and the District of Columbia lobbied the government to completely cut funding to nursing homes that had arbitration clauses in their residency agreements. They argued that “arbitration kept patterns of wrongdoing hidden from prospective residents and their families”.

While, this is a major win for the residents, arbitration agreements as a whole are still legal. Any arbitration agreement entered into between a resident and a nursing home prior to November 28, 2016 will still be legally binding. Furthermore, if a resident and their nursing home sign an arbitration agreement after the dispute or claim arises (and not as a requirement of their residency agreement), then that agreement will also be binding.

Trusting your loved ones to the care of a nursing home is a difficult decision for many. In a worst-case scenario that something should happen during their time at the home, this ruling ensures that justice can be pursued through our court system.

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