Ban on Forced Arbitration in Nursing Home Cases May Be Removed

The History: A Ban on Forced Arbitration

Towards the end of Obama’s administration, the Department of Health and Human Services introduced a new rule that would ban nursing homes and assisted living facilities from forcing patients and their families into arbitration.

Until that point, whenever a new patient was admitted to a nursing home facility, he or she and their families were required to sign an arbitration clause; if they refused to sign, they were not able to be admitted.

In many of these situations, the elderly patients and their families are in the midst of navigating difficult times in their life and have little options to look elsewhere. Additionally, these mandatory arbitration deals are often hidden in confusing legal jargon, which makes it very difficult for the patients and their families to understand.

With the new rule that was introduced last fall, patients and their families would no longer be required to sign a mandatory arbitration clause. This rule was to apply to any new contracts for facilities that accept Medicare or Medicaid, which is a vast majority of nursing home facilities.

What is Forced Arbitration in Nursing Homes?

Essentially, when someone signs an arbitration clause, he is giving up his right to sue – even in matters of abuse, neglect, or wrongful death.

Unfortunately, these restrictions are often hidden in fine print and are difficult for families to spot. Many times, a family only finds out about the mandatory arbitration deals after their loved one has suffered abuse or neglect and they are told they are not able to sue the nursing home facility.

How Does Forced Arbitration Affect Abuse and Neglect in Nursing Homes?

While no one wants to think about the possibility of their loved one suffering from abuse or neglect at a nursing home, the reality is that there is a widespread problem among long-term care facilities today.

In a study by CNN, it was revealed that over 1,000 nursing homes have been cited for mishandling alleged cases of sexual abuse. Moreover, one in 10 Americans over the age of 60 has suffered elder abuse, according to the National Center on Elder Abuse.

The rule that Obama’s administration introduced last fall was intended to protect the elderly from abusive, negligent, and generally poor nursing home practices. The ban on the mandatory arbitration clause would allow patients and their families to sue nursing homes when such abuse or neglect occurs. The goal was to ensure nursing home and long-term care facilities would be held responsible if any of their patients suffered from abuse, neglect, or wrongful deaths.

Although the rule barred nursing homes from adding forced arbitration clauses to their contracts, it did allow for voluntary arbitration agreements among patients, their families, and the facility.

The Nursing Home Industry Fights the Ban

While the ban on forced arbitration in nursing homes was finalized last November, the rule has yet to be implemented due to opposition from the nursing home and healthcare industries.

In fact, the nursing home industry filed a lawsuit against the ban, and a judge issued a preliminary injunction, preventing the new rule from taking effect.

Julie Braman Kane, President of the American Association for Justice, commented that this lawsuit by the nursing home industry is a “last-ditch effort to hang on to forced arbitration.” Kane explains, “The nursing home industry has hidden behind forced arbitration clauses to cover up abuse and neglect, and now they’re upset that regulators are stepping in.”

Those in support of nursing home facilities claim that arbitration is a more cost-effective solution than a lengthy court case. But the benefits for the nursing home facilities extends beyond cost savings.

In addition to forcing patients and their families into arbitration, these clauses allow the nursing home facilities to decide on the arbitrator – a clear advantage. Moreover, a patient’s ability to appeal a ruling from an arbitration is very limited in these cases.

Organizations such as the American Health Care Association, which represents long-term care providers, believe the original ban on arbitration was “overreach.”

The AHCA supports arbitration, claiming it is problem solving without filing a lawsuit.

Mark Parkinson, the President and CEO of AHCA, said, “Arbitration produces swifter resolution to disputes, compensates residents without undue litigation expense for either party, and reduces the funding burden on the Medicare and Medicaid programs.”

What he did not include in his statement is that patients who settle disputes in arbitration can receive as much as 35% lower awards than those who settle disputes in a juried court.

To this date, the ban on mandatory arbitration has still not taken effect, largely in part to this lawsuit.

Proposed Changes to the Forced Arbitration Ban

A few months ago, the Centers for Medicare and Medicaid Services (CMS) announced revisions to the original rule. The newly proposed rule would prevent the nursing home arbitration ban from ever going into effect.

Instead of banning mandatory arbitration, the CMS is revising the rule to instead say that any forced arbitration clauses must be written in “plain language” rather than legal jargon. According to the CMS, this revision will help patients understand the policy they are signing, while reducing what they believe are unnecessary burdens on nursing homes.

The CMS supported these revisions by stating:

“This proposed rule would revise the requirements that Long-Term Care (LTC) facilities must meet to participate in the Medicare and Medicaid programs. Specifically, it would remove provisions prohibiting binding pre-dispute arbitration and strengthen requirements regarding the transparency of arbitration agreements in LTC facilities. This proposal would support the resident’s right to make informed choices about important aspects of his or her health care. In addition, this proposal is consistent with our approach to eliminating unnecessary burden on providers.”

Those who fight for the rights of elderly patients are outraged by the proposed changed. The Fair Arbitration Now Coalition states that this reversal of the ban will “ultimately hurt nursing home residents at a vulnerable time in their life.”

Robert Weissman, president of Public Citizen added:

“The Trump administration apparently thinks it is okay for nursing homes to force seniors into signing contract terms that give up their right to sue in court if they are subsequently victimized by neglect or abuse. It’s hard to imagine a more callous policy.”


The AARP stands behind these concerns. In a letter to CMS regarding the proposed revisions, David Certner, who represents the AARP’s legislative counsel asserted, “We are alarmed that CMS’ decision to remove provisions prohibiting binding pre-dispute arbitration will very likely have dangerous and harmful impacts on nursing facility residents, as well as their families.”

With clear division between the advocates for the elderly and the organizations that support nursing home and long-term care facilities, there has yet to be a final decision. The CMS is currently reviewing the proposed regulation.

Finding Legal Representation in Nursing Home Arbitration Cases

Regardless of the outcome of the revisions and rule, those who suffer nursing home abuse or neglect are entitled to legal representation.

In fact, according to an article in Time, people who are represented by a lawyer were more likely to reach an agreement with a provider than with an arbitrator determining the outcome.

If you have any questions or concerns regarding the care of a loved one in a nursing home or long-term care facility, it is important that you contact an experienced nursing home attorney as soon as possible. Our attorneys can help you navigate the difficult situation and will review your case, free of charge. You can contact us directly by calling 800-609-7577 or visiting one of our New Jersey office locations.

2 thoughts on “Ban on Forced Arbitration in Nursing Home Cases May Be Removed

Comments are closed.

How Can We Help?