Nursing Home Residents Win Back Right to Sue

In recent years- nursing homes have increasingly asked — or forced — patients and their families to sign arbitration agreements prior to admission. By signing these agreements- patients or family members give up their right to sue if they believe the nursing home was responsible for injuries or the patient’s death.

Now- in an unexpected move- the federal Centers for Medicare and Medicaid Services (CMS) is forbidding nursing homes from entering into binding arbitration agreements with a resident or their representative before a dispute arises.  The agency has issued a final rule prohibiting so-called pre-dispute arbitration agreements in facilities that accept Medicare and Medicaid patients- affecting 1.5 million nursing home residents. After a dispute arises- the resident and the long-term care facility could still voluntarily enter into a binding arbitration agreement if both parties agree.

For years- patient advocates have contended that those seeking admission to a nursing home are in no position to make a determination about giving up their right to sue. Families are focused on the quality of care- and forcing them to choose between care quality and forgoing their legal rights is unjust- the advocates said.  Courts have sometimes struck down arbitration agreements as unfair- but others have upheld them.

“Clauses embedded in the fine print of nursing home admissions contracts have pushed disputes about safety and the quality of care out of public view-” the New York Times wrote in its coverage. “With its decision- [CMS] has restored a fundamental right of millions of elderly Americans across the country: their day in court.”

The nursing home industry has countered that the new rule will trigger more lawsuits that could increase costs and force some homes to close.  Mark Parkinson- the president and chief executive of the American Health Care Association- said that the change “clearly exceeds” CMS’s statutory authority.

Although the rule could be challenged in court- for now it is scheduled to take effect on November 28- 2016- and will affect only future nursing home admissions. Pre-existing arbitration agreements will still be enforceable.

To read the final rule of the Department of Health and Human Services, see their resource on Reform of Requirements for Long-Term Care Facilities.