Arbitration Agreements in Nursing Home Contracts

As anyone who has had to admit a loved one to a nursing home knows, the contracts are long and full of “legalese” and fine print, especially when you consider the stressful situation that has brought you to be reviewing that contract in the first place.

One especially confusing term of those agreements is the arbitration clause, which requires that the resident give up her right to trial by jury or in front of a judge, and agree that any future dispute will be decided by an arbitrator.

Arbitration before a neutral decision maker can be much less time consuming, and therefore less costly, than court proceedings.  In fact, there is an increasing trend among courts to recommend arbitration, or some other alternative dispute resolution process, before a case goes to trial.  However, in that situation, the parties to a particular dispute have decided that arbitration makes sense in their case.  In contrast, the clauses in nursing home agreements require residents to commit to arbitration before any and all disputes, of any nature, have arisen.

Yet, given the circumstances in which these agreements are presented, and the time pressure that families often feel to find the right placement for their loved ones, residents and families may believe that they have no choice but to sign agreements with these provisions.

In order to address this situation, the Centers for Medicare and Medicaid Services (CMS) have issued a proposed rule intended to address several requirements for the long term  care facilities that accept federal funds through Medicare or Medicaid. The rule includes conditions on the use of arbitration clauses. (See the Federal Register, Vol. 80, No. 136, July 16, 2015 for the full text.)

While CMS declined to require that arbitration clauses be eliminated, the proposal does require that facilities explain the provision to residents upon their admission, and that they obtain the resident’s specific acknowledgement of the provision.  Most important, the facility must explain that the resident’s admission is not contingent on whether she agrees to an arbitration clause. However, the rules do not require any additional training for nursing home staff in how they might explain this provision and its implications to residents and their families at such a stressful time.

Comments on the proposed rule were due by September 14.  It will be interesting to see whether the final regulations reflect feedback asking CMS to make the rule tougher, or more lenient.

Comments

  1. LaDawn Whiteside says:

    Currently nursing homes are prohibited by CMS from arbitration agreements in resident admission agreements. Effective November 2017, CMS regulations for nursing homes require a nursing home to document efforts to prevent discharge notices. This is a great opportunity for mediators across the country. Contact me at ladawnwhiteside@gmail.com if you would like to discuss this more. I am a certified mediator with 30 years of healthcare experience.
    Have you worked with assisted living facilities? They need mediator help also.

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