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Nursing Home Patients Cannot be Forced into Arbitration

Saturday, October, 15, 2016

A new rule from the Department of Health and Human Services now bars nursing homes from forcing patients and families into arbitration. The rule applies to new patients and allows them to file lawsuits against nursing homes. Previously, these mandatory arbitration clauses, were often hidden in the fine print of contracts and gave families and residents no recourse within the federal court system, even if accusations of medical malpractice or negligence were made.


The new rule only applies to new contracts and will not affect current residents of nursing homes. It also only applies to facilities that accept Medicaid or Medicare, which is nearly all nursing homes. The new rule will go into effect in November.


The Department of Health and Human Services might be barring nursing homes from using forced arbitration clauses, but is allowing them for consumers and facilities to voluntary enter into these agreements. In these cases, the agreements must be clearly explained and completely voluntary and should not prevent or discourage families or residents from talking to authorities about a facility’s quality of care.


Lawmakers, including Vermont Senator Patrick Leahy praised the rule and called it a small but important victory expected to reduce the number of mandatory arbitration clauses. He also stated, “Too often, long-term care facilities require potential residents and their families to decide whether to waive their legal rights by signing mandatory arbitration clauses that are slipped into a contract and written in legal jargon.”


This rule is the latest measure taken by the Obama administration to curb companies from using mandatory arbitration stipulations.