New Federal Rule Lets Nursing Home Industry Force Arbitration upon Residents
The right to a jury trial was contemplated as a basic right by the founding fathers of this country. Today, many assume if you are injured due to someone’s bad acts or neglectful conduct, you can file a lawsuit and take your case to court to get justice. Not so.
More and more, “arbitration clauses” are inserted into contracts for all sorts of things. These are contractual provisions where the parties agree to give up their right to file a lawsuit should a controversy arise between them.
Arbitration agreements can be found in all sorts of things, from contracts to buy a car or laptop, to agreements involving services like taxi rides. See, Carlson, Melanie A. “The Corporate Exploitation of Fundamental Rights: A Nation of Arbitration.” (2017).
Forced or Voluntary Arbitration
Sometimes, the provision is for “voluntary arbitration,” where the parties agree in writing to go to arbitration if there is a conflict. The decision to arbitrate is negotiated as part of the deal.
Often, the clause insists upon “forced arbitration,” where the person who wants to buy the product or have the service must agree to drop their right to file a lawsuit and instead arbitrate any disputes with the company. The forced arbitration usually includes a provision where the person also agrees to drop their right to appeal the arbitration ruling, made by the arbitrator.
The Problem with Arbitration
Arbitration is a big benefit to defendants who have caused harm and are legally liable for the consequences of their bad acts. It’s no wonder that more and more, forced arbitration clauses are appearing in consumer contracts in this country.
The problem with arbitration is that it systemically favors the defendant.
Among other advantages for the corporate wrongdoer are:
- Arbitration is cheaper for the company (maybe not for the injured victim).
- Arbitration allows the company to avoid having its dirty laundry aired in the public records of the courthouse. It is a private process usually protected by a confidentiality agreement.
- Arbitration, as a general rule, is not appealed so the case is resolved faster than the civil trial process.
For more, read our discussion in: Forced Arbitration Clauses, Jury Trials, and Justice.
Nursing Home Agreement Arbitration Clauses
On July 16, 2019, the Centers for Medicare and Medicaid Services (CMS) released their regulation allowing the nursing home industry the ability to insert pre-dispute arbitration agreements into residential care contracts. This federal regulation, amending 42 CFR 483.70(n), will be effective on September 16, 2019.
In the Federal Register, the CMS announced the final rule with detailed explanations of how the previous rule (which banned pre-arbitration dispute agreements) never became effective law and is now abandoned in favor of the new rule.
What’s happened? The nursing home industry filed suit after the October 2016 rule was finalized, and a federal district court enjoined that rule being enforced in a preliminary injunction. Less than a year later, the CMS issued the new rule, abandoning the arbitration prohibition. That new rule is now final and effective in September.
The New Nursing Home Arbitration Law
Effective September 2019, nursing homes in Indiana and Illinois, as well as the rest of the country, can continue their practice of inserting pre-dispute arbitration clauses into their resident care contracts.
Their only limitation: the federal law does not allow the nursing home or long-term care facility to make arbitration a requirement for either being admitted to the facility or for continuing to reside there. And it prohibits nursing home arbitration agreements from including language preventing residents or anyone else from communication with federal, state, or local officials.
What about the nursing home administration pressuring the resident (or his or her loved ones) to agree to the arbitration provision anyway? The CMS explains:
“In addition, to address commenters’ concerns that facilities may still coerce or intimidate the resident and his or her representative into signing the agreement, the facility must explicitly inform the resident or his or her representative that signing the agreement is not a condition of admission and ensure that this language is also in the agreement.”
Does anyone truly believe that a family, emotionally dealing with the decision to have their loved one entrusted to a nursing home or care facility is protected here, by being “explicitly” informed?
Reality of Allowing Arbitration Agreements for Nursing Home Care Contracts
Make no mistake: this new federal law favors the nursing home industry, not the care facility resident and his or her family. This is forced arbitration involving the most vulnerable of citizens.
It is in the best interests of the nursing home industry to maximize their profits, while nursing home abuse claims are at unprecedented levels. Indiana and Illinois nursing home residents are particularly vulnerable to becoming victims of nursing home abuse or neglect. See:
- 2019 Senate Report List Reveals Worst Nursing Homes in Indiana and Illinois
- Nursing Home Abuse in Indiana and Illinois: Abuse, Neglect, Exploitation of the Elderly
- Seeking Justice for Victims of Nursing Home Injuries in Indiana and Illinois.
This new rule lets these corporations essentially force arbitration upon the resident, giving the nursing home or care facility an ability to hide from the public scrutiny that the civil trial process provides.
Wrongdoing in nursing homes is rampant and our senior citizens deserve the utmost protection from being victimized. Arbitration clauses weaken their ability to be protected from abuse and neglect while residing in Illinois or Indiana nursing homes or long-term care facilities.
Nursing home abuse and neglect victims and their families must be aggressive in their fight for justice, and even more so in the face of this new federal regulation. Zealous investigation and advocacy on their behalf must be undertaken, including finding ways to avoid the arbitration provision as well as detailing the elements of their claims and causes of action to achieve victory in either forum, the courtroom (trial) or the conference room (arbitration).
Nursing home abuse and neglect cannot be tolerated in Indiana and Illinois. We must all be vigilant for this type of victimization and vigorous to protect these most vulnerable of citizens. Please be careful out there!
