Forced Arbitration in Nursing Home Lawsuits Should Be Eliminated, Groups Urge

Lawmakers and consumer watchdog groups are calling for an end to forced arbitration clauses in nursing home contracts, which attempt to strip away the rights of residents and their families to file lawsuits for nursing home neglect and abuse. 

Last week, a group of 27 lawmakers sent a letter (PDF) to the U.S. Centers for Medicare and Medicaid Services (CMS), urging the agency to issue a final rule that ensures all nursing home arbitration agreements are entered into voluntarily and on an informed basis.

On the same day, October 14, a group of more than 70 organizations called the “Fair Arbitration Now” coalition also sent a letter (PDF) to CMS, calling for an end to forced arbitration clauses being a requirement of new resident admissions at nursing homes that receive medicare or medicaid funds.

The letters come as a result of proposed new rules by CMS that would revise rules for arbitration clauses for those facilities that receive federal funding. However, critics say that they do not go far enough and should include a ban on forced arbitration.

Forced arbitration clauses, also known as pre-dispute arbitration, are included in many nursing home contracts and stipulate that the families or residents cannot file lawsuits against the facility. Instead, claims for issues like abuse, neglect and other disputes must go before third-party arbitrators, who often receive a lot of their work as referrals from the nursing home industry.

These clauses are considered “forced,” because signing them is a condition of admission to the facility, at a time when many families must house an elderly family member immediately. Additionally, critics say that the families are often not adequately informed about what they are signing and that arbitrators often heavily favor the nursing home companies.

“Unlike America’s civil justice system that was developed through centuries of jurisprudence, forced arbitration does not provide important procedural guarantees of fairness and due process that are the hallmarks of courts of law,” the lawmakers’ letter, headed by Congressman Henry Waxman, states. “The practice often takes place behind closed doors rather than in a public forum, enabling parties to keep their wrongdoing confidential and hidden from the public.”

The letter notes that arbitrators are not required to have legal training and there is no judicial review process. The letter also notes that elderly residents are a vulnerable population in a vulnerable position, often admitted to the nursing homes directly from a hospital, and that forced arbitration leaves them even more vulnerable to abuse and predatory business practices.

The Fair Arbitration Now letter indicates that in addition to the vulnerability of residents, the contracts are a disincentive to nursing homes to do their job and provide residents with the best care possible.

“Residents and their families must be able to seek remedies for serious injuries and harm caused by nursing home negligence, neglect and abuse, such as bedsores and infection, pressure ulcers, dehydration and maluntrition, unnecessary restraints, and even physical and sexual abuse. When forced arbitration clauses are present, residents lack meaningful ability to hold the nursing home accountable for these and other law-breaking conduct,” the letter states. “Further, operators have less incentive to maintain safe facilities when the likelihood for being held liable for injuries they cause is low, undermining the priority that should be placed on patient and resident care.”

The proposed rule, “Reform of Requirements for Long-Term Care Facilities” (PDF) was proposed in July and originally had a comment period ending on September 14. However, on September 15, CMS reopened the comment period for another month. Currently, the rule acknowledges the hardships caused by forced arbitration clauses, but does not require nursing homes to stop using them.