Use by Nursing Homes of Forced Arbitration Clauses Takes Major Hit

Virtually every nursing home in Maryland and across the country takes Medicare or Medicaid payments. The federal government has issued a rule stating that any facility which accepts this funding can’t force families into arbitration and prevent them from taking legal claims to court. Though a legal challenge by the nursing home industry may derail the rule, if it remains as is, it’s a major victory for nursing home residents and their families.

On Wednesday, September 28, the Centers for Medicare and Medicaid Services (CMS), an agency within the Health and Human Services Department, finalized the new rule which would impact nursing homes and an estimated 1.5 million residents, according to the New York Times. CMS controls more than $1 trillion in Medicare and Medicaid funding.

The newspaper calls the new rule “the most significant overhaul of the agency’s rules governing federal funding of long-term care facilities in more than two decades.”

Arbitration is an alternative to the court system. Arbitration, in and of itself, is not a bad thing. It’s the rules by which an arbitration hearing operates that are the problem. They can prevent news of nursing home abuses from being made public, discourage families from seeking compensation and stack the legal deck against nursing home residents and their families. Even extreme cases of elder abuse and wrongful death could be forced into arbitration.

Arbitration is generally a privately organized type of trial. An arbitrator or panel of arbitrators act as the judge and jury. Often the arbitrators are chosen by the nursing homes. Since often they are paid by the nursing homes, there’s an incentive for arbitrators to decide in nursing homes’ favor so that they can continue to get the work. However sometimes the resident or their families share in the cost of arbitration.

Unlike trials, most arbitrations are kept confidential (evidence and proceedings are not allowed to be publicized), the ability to seek information and documents from a nursing home can be severely restricted and the losing side (often the nursing home resident) may need to pay the costs and expenses of the winning side (often the nursing homes) making seeking compensation for injuries a huge financial risk.

Maryland nursing home residents and their families agree to these clauses when they sign paperwork to have the family member admitted. Many of those signing don’t understand the implications of what they have agreed to.  They may be desperate to find care for their loved one and, as a practical matter, have no choice but to agree.

Due to U.S. Supreme Court decisions in 2011 and 2013 that were highly favorable for forced arbitration clauses, their use has exploded across many industries, including nursing homes. They can be in fine print, worded in legalese that’s difficult to understand, and families may find it difficult, if not impossible, to find a nursing home not using forced arbitration.

Courts have become extremely pro-arbitration, including one federal circuit appeals court that found an arbitration clause was binding on a man who could not read or sign his name to the agreement, reasoning that “illiteracy alone is not a sufficient basis for the invalidation of an arbitration agreement.”

Unless there’s a successful legal challenge, the new rule will go into effect in November. It will impact only residents who enter nursing homes after the effective date, not current residents.

The new rule does not affect assisted living facilities. We continue to fight against arbitration in an effort to protect the legal rights of our clients.

If your loved one has suffered neglect or abuse at a Maryland nursing home, we can help you address the situation and hold those responsible accountable for their actions. At the Law Offices of Roger S. Weinberg, you’ll find compassionate support and experienced advocates to help your family through the tough times. Call 410-825-3161 today to schedule a free consultation.

In the last decade, arbitration clauses have affected things like cellphone contracts, employment agreements and student loans.

But even as the use of arbitration clauses spread, little was known about what happened to those who took their chances there. Companies argued that arbitration offered a simpler, swifter and less expensive alternative to court, without the headaches and delays.

Those claims, though, were largely anecdotal because arbitrations are confidential and there is no federal database that records their outcomes.

In a yearlong investigation, The Times tried to pierce the veil, getting inside the secretive proceedings. To do that, The Times examined records from more than 25,000 arbitrations between 2010 and 2014 and interviewed hundreds of lawyers, arbitrators, plaintiffs and judges in 35 states.

The proceedings bear little resemblance to court. They have been conducted in the offices of lawyers who represent the companies accused of wrongdoing.

In the case of nursing homes, The Times found many troubling examples where issues of abuse and potential neglect never made it into the public light because they were blocked from court.

In May 2014, for example, a woman with Alzheimer’s was sexually assaulted two times in two days by residents at a nursing home in Lemon Grove, Calif. A subsequent investigation by the state’s department of public health found the nursing home “failed to protect” the woman.

But when her family tried to hold the nursing home accountable in court, their case was scuttled because of an arbitration clause. Ultimately, they gave up and settled with the nursing home.