ANOTHER BLOW AGAINST MANDATORY CONSUMER ARBITRATION
As we have previously discussed in BE(A)WARE OF CONSUMER ARBITRATION CLAUSES consumer arbitration is coming under increasing attack as a dispute resolution mechanism. The federal agency that controls Medicare and Medicaid funding recently banned the use of mandatory arbitration for the resolution of disputes between nursing homes and their residents, further calling into question the use of mandatory consumer arbitration.
This new rule will affect nursing homes with approximately 1.5 million residents. Prior to the issuance of the new rule, nursing homes were able to require that residents waive their right to sue the nursing home for safety or patient care issues as part of the patient admissions contract. Rather than pursing a dispute in court, the consumer would be required to follow an arbitration process, which in many cases favored the nursing homes. The New York Times highlighted the mandatory arbitration issue in 2015 and 2016, in articles regarding the cases of a 100-year-old woman who was murdered in a nursing home (Read More) and a 94-year-old woman who died of a head wound (Read More). In those cases, the nursing homes used the mandatory arbitration clause in the admissions contract to attempt to block lawsuits alleging negligence on the part of the nursing homes.
The Centers for Medicare and Medicaid Services issued the new rule after officials in many states sought to limit the mandatory arbitration practice. The proposed rule is set to take effect in November, but will only apply to new admissions, not patients under an existing contract.
Placing a loved one in a nursing home is already a stressful event. After November, families will not have to also be concerned about provisions in the admissions agreement preventing them from holding the home accountable in the event of an injury or negligent care.
For more information, see SIGNING A NURSING HOME ADMISSION AGREEMENT AS A RESPONSIBLE PARTY.