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Tuesday, October 18, 2016

Nursing Homes Barred from Requiring Arbitration

What is being done about elder abuse in nursing homes?

Last month, we wrote a post on the factors involved in selecting a nursing home in light of widespread neglect and abuse in the elder care system. The Obama Administration has since issued a rule that will make it easier for the families of injured nursing home residents to sue for damages. The New York Times reports that the US Centers for Medicare and Medicaid Services (a division of the Department of Health and Human Services) has barred all nursing homes that receive federal funding from requiring residents to resolve disputes through arbitration. This new rule is designed to provide greater protection to as many as 1.5 million residents in the affected facilities. 

Mandatory Arbitration Clauses

Previously, admissions contracts contained "fine print clauses" that mandated arbitration. While this form of alternative dispute resolution was designed to help the nursing home industry mitigate legal costs, it has not led to successful outcomes for many patients and their families who pursued claims against nursing homes.

The New Rule

Some observers note that this is the most significant rewrite of the rules governing federal funding of long-term care facilities in decades. The rule was originally proposed in July after a host of patients' rights advocates sounded the alarm about the pervasive use of arbitration by elder care facilities.

This initiative was also prompted in part by officials in a number of states who argued that arbitration concealed patterns of wrongdoing from prospective residents and their loved ones. Restoring the legal rights of the elderly to file lawsuits against federally funded nursing homes also had the support of lawmakers on Capitol Hill, even though this move did not require Congressional approval.

“The sad reality is that today too many Americans must choose between forfeiting their legal rights and getting adequate medical care,” Senator Patrick Leahy (D-VT) reportedly said in a statement.

Industry Opposition

Advocates for the nursing home industry have argued that arbitration is a more cost effective alternative to court, and that potential lawsuits will drive up costs, force some facilities to close, and limit patient access to care. One such group, the American Health Care Association, believes the Centers for Medicare and Medicaid Services has exceeded its authority and that the new rule is unnecessary.

The Takeaway

In short, a nursing home that continues to rely on arbitration clauses in its admissions contracts will lose federal funding. Unless the rule is challenged in federal court, it is slated to become effective by November - but there is a caveat: only future admissions are covered. Ultimately, nursing home corporations that receive federal funding will no longer be able to conceal practices that may lead to abuse and neglect. Nonetheless, it is crucial for elderly patients and their loved ones to do their homework when selecting a nursing home, and always consult with an experienced elder law attorney.


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