Nursing Homes Lose Arbitration Clause
I’m Ed Smith, a Sacramento nursing home abuse attorney. There are approximately 1.5 million seniors receiving Medicare and Medicaid paid benefits who reside in long term care facilities. When placing a family member in a nursing home, families consider affordability and location as the two most important factors. This can leave a very short list of nursing home options. Families sign the nursing home contract at a very vulnerable point in their lives.
Admission and the Contract
Families are not in a position to weigh options or understand that they are signing away their basic legal rights. They are handed a huge admission packet to sign, what they do not realize is that hidden within the fine print of the nursing home contract is an arbitration clause. Arbitration is an alternative dispute resolution. Parties resolve differences before a third party (an arbitrator). In the case of nursing home contracts, binding arbitration is where residents give up their legal rights to file a lawsuit and instead are bound by the arbitrator’s decision. These clauses can be found in many contracts that are often signed before any problem or dispute arises. Leaving the aggrieved party with limited choices.
Why Do Nursing Homes Like Arbitration Clauses So Much?
Referred to by some judges as “get out of jail free” cards, that favor corporations. (The binding arbitration clause was originally created by credit card companies, and Wall Street executives to protect themselves from class action lawsuits). Studies have found that arbitration awards on average pay out amounts 35% lower than those of jury trials. Arbitration is not like civil court. Instead of judges and juries, arbitrators (hired by corporations) review and decide claims. The cases are confidential, there is no government reporting. Arbitrators are able to decide, which and how much evidence can be presented by a plaintiff or what can be withheld by the defense. Rules of evidence do not generally apply, and experience as a judge is not required. There is no appeal possibility and all decisions are final. In addition, courts cannot intervene, even if there is an obvious injustice.
The desire for repeat customers
Private arbitration companies want repeat customers like any other business. Nursing homes are their repeat customers. Underlying each case is the threat of lost business, the economic incentive is high to decide in favor of nursing homes. Arbitration clauses can give nursing homes the power to set all the terms. Nursing homes can select which arbitration company will be used within the contract wording. The Plaintiff rarely wins and the government and the public cannot see any pattern or wrongdoing due to the confidential nature of arbitration.
New Law brings about change
Thirty-four Senators felt that the practice of including an arbitration clause in nursing home admissions contracts was corrupt. They asked the government to deny nursing homes that use arbitration clauses, Medicare and Medicaid funding. Most families faced with placing their loved one in a nursing home have few options due to costs and location constraints, they have no choice but to sign. There is no real choice when giving up their rights to a court trial and admission to the only nursing home they can afford and visit. Effective November 28, 2016 a new rule from the Centers for Medicare and Medicaid Services (CMS) goes into effect prohibiting binding arbitration clauses, as a method for nursing home facilities to resolve residents disputes.
About the New Rule
The CMS rule-bars nursing homes from forcing residents to sign admissions that include arbitration as a condition. It also, includes some new requirements with the goal of improving both the quality of care and reducing unnecessary hospital readmission’s. Controlling more than $1 trillion dollars of Medicare and Medicaid funding, the CMS’s 713-page rule, is the first skilled nursing facility overhaul since 1991 to update requirements for facilities providing long term care. The American Association for Justice applauded the new rule, stating that nursing homes will no longer be able to evade accountability.
Ironically a lawsuit has been brought by the very nursing homes that are trying to deprive families and their loved ones of the same right. We look forward to learning the outcome and will keep you updated.
Related resources and articles by Ed Smith:
Sacramento Nursing Home Abuse Lawyers
My name is Ed Smith, a Sacramento Nursing Home Abuse Lawyer. If you or someone in your family has been injured in a nursing home setting, please contact me at (916) 921-6400 or toll free at (800) 404-5400 for free, friendly advice.
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