For years, the nursing home industry, like many other industries selling products or services to consumers, quietly tucked arbitration provisions into their admission agreements and had unsuspecting residents and their family members waive important constitutional rights, such as the right to go to court — usually without the slightest awareness that they were doing so.
If and when a dispute arose, the nursing home corporation could always fall back on its contract and prevent the matter from ever being heard publicly in a court of law. Instead, the family member of someone who was physically injured or killed, or who simply wanted to dispute a bill or unlawful collection practice, would be required to submit their dispute to an “arbitrator.” Many arbitration clauses give the nursing home the sole right to choose who that “arbitrator” will be. Does that sound fair?
With an arbitration clause in its back pocket, a nursing home corporation may feel less adverse to taking risks with staffing and training. If the nursing home operator is not worried about the potential harm and financial adverse effects of understaffing a facility, what is there to stop him from cutting staff in order to increase profits?
Arbitration provisions are still widely used to this day in nursing home contracts; however, that is about to change. Effective November 28, 2016, CMS – The Centers for Medicare and Medicaid Services – will ban the nursing home industry from using pre-dispute arbitration clauses in its admission agreements. This new regulation applies to all nursing homes who receive taxpayer dollars through the Medicare and Medicaid programs. It is important to note that, if you are admitting a resident to a nursing home between now and November 28, 2016, you should be sure to cross out any and all paragraphs that reference arbitration. They cannot force you to agree to arbitration; however, if you simply sign their form contract without declining arbitration and crossing out all references to it, you will be bound to arbitrate any future dispute you or your family may have with the nursing home. Wouldn’t you feel a little better knowing that the nursing home is going to face greater pressure to provide quality care and sufficient staffing for your loved one in the absence of that arbitration clause to fall back on?