Last fall, the Centers for Medicare and Medicaid Services removed an obstacle for nursing home neglect lawsuits in this country. It prohibited nursing homes that receive federal funding from inserting mandatory arbitration clauses in contracts admitting new residents to give greater assurances of the care provided to its residents. This rule impacted most nursing homes in this country.
However, the Trump Administration is attempting to rescind this policy which returned the right to sue to families. The CMS issued a proposed rule in June withdrawing this prohibition and making mandatory arbitration the nursing home industry standard. Mandatory arbitration was being restored, according to the CMS, to reduce the financial burden on nursing homes.
This industry has extensively lobbied for this change. Last fall, it also filed a lawsuit challenging the federal government’s authority to prohibit mandatory arbitration. It argued that the rule was arbitrary and that CMS exceeded its power in prohibiting mandatory arbitration.
The nursing home industry has suffered large civil verdicts in the court system. Like other businesses, this industry uses mandatory arbitration to lower legal costs. Usually, there is no way for consumers to negotiate the removal of these clauses.
These terms usually require that disputes are brought before a private arbitrator instead of a courtroom. The arbitrator has sole discretion in resolving a dispute. The business usually pays the arbitrator’s fee which provides an incentive for the arbitrator to rule in favor of the business. Customers are usually prohibited from joining class-action lawsuits through these clauses.
A nursing home industry group argued that arbitration brings quicker resolution to disputes, provides compensation without accompanying litigation expenses and lowers expenses for the Medicare and Medicaid programs.
The American Health Care Association, an industry group for nursing homes, commissioned a 2009 study which found that arbitration awards in nursing home cases were approximately 35 percent lower than if the case was pursued in a civil trial. The advocacy Public Citizen group, in a 2007 report, found that arbitrators ruled in favor of financial companies and banks in disputes with California consumers 97 percent of the time over a four-year period.
Victims of nursing abuse and family members may be entitled to compensation and other relief. An attorney can help assure that their rights are protected in the legal system.
Source: Los Angeles Times, “An end to nursing home lawsuits?” By David Lazarus, June 13, 2017