Banning Forced Arbitration in Nursing Home Contracts: Overturned?

In September, 2016, in response to a rising number of forced binding arbitration agreements at nursing homes and long-term care (LTC) facilities, the Centers for Medicare & Medicaid Services (CMS) instituted a new rule. If a nursing home wanted to receive funding from Medicare or Medicaid, it could no longer make accepting the arbitration process (basically, limiting one’s ability to sue for cause) a requirement for becoming a resident of the nursing home or LTC. This rule did not affect any contracts signed before the rule’s effective date of November 28, 2016.

Binding arbitration has grown more popular as a way to resolve disputes by using an independent, private third party, bypassing the court system. However, accepting binding arbitration in a contract means that the courts will almost always uphold the contract, which limits your ability to sue for damages even in cases of egregious wrongdoing. Forced arbitration refers to the requirement that you accept binding arbitration as a condition for entrance into the nursing home or LTC. Your rights to a trial in open court in cases of negligence and other wrongdoing are nullified.

The arbitration process has been rightly objected to as skewed in favor of the nursing home or LTC, as opposed to the impartiality of our courts system. It also bars individuals from banding together in a class action. Why is this important? Because if all residents were being defrauded, for example, each resident would have to go through their own arbitration process, with no guarantee that the same conclusion would be reached by the arbitrators in every case.

But nursing homes and LTC organizations are fighting back against the CMS’s new rule, which benefits residents and patients who too often suffer from inferior care. In October, 2016, in Mississippi federal court, a lawsuit was filed by the American Health Care Association (AHCA) and others, alleging that the CMS had overstepped its authority with the new rule. The AHCA and others contend that the CMS has no authority under the law to regulate any facility’s usage of arbitration or arbitration clauses. The complaint further argues that, even if the law allowed the new CMS rule, the rule is “arbitrary and capricious.” Why is that? Because nursing homes and their residents would not enjoy the benefits of the supposed lower costs of arbitration, which those bringing the suit claim pulls money away from resident care.

The suit against the CMS rule has, at least temporarily, succeeded. The federal judge in the Mississippi courtroom agreed with the suit, issuing a temporary injunction that blocks the new CMS rule until the lawsuit ends. The injunction is appealable, meaning that the CMS can seek review of the court order rather than wait until the lawsuit runs its course. It remains to be seen whether the AHCA will win their case. In the meantime, the new rule by the CMS banning forced arbitration when Medicare or Medicaid payment is involved is not in operation.

Seeking Truth, Securing Justice for Seniors

When someone you love has been hurt, it can feel like nothing will ever be right or fair again. When this happens, the nursing home injury lawyers at the Louthian Law Firm can review your legal options and work with you to determine the most appropriate next step.

Many South Carolina assisted living facilities are part of a larger chain, complete with its own legal department. The nursing home’s lawyers may try to dispute abuse and neglect claims, but we have represented victims of neglect or abuse in retirement homes and we understand how to deal with negligent facilities and the nursing home attorneys who represent them. While a lawsuit cannot heal bedsores or restore someone’s health, a South Carolina nursing home abuse claim can help recover the large sums spent on a neglectful or abusive nursing home, as well as medical bills created by that abuse or neglect. You may also be able to hold the abusers accountable for the pain and suffering they caused.

For a free consultation, call our Columbia nursing home injury attorneys today toll free at 1-803-454-1200, or use our online contact form.