New Rule Bans Arbitration Clause in Nursing Homes, Preserves Rights of Millions of Patients to Sue Nursing Homes in Court

New Rule Bans Arbitration Clause in Nursing Homes, Preserves Rights of Millions of Patients to Sue Nursing Homes in Court

A new rule from the Centers for Medicare & Medicaid Services (CMS) was released on Wednesday, guaranteeing the rights of patients and their families to sue long-term care facilities (i.e. nursing homes). Currently, most nursing homes use arbitration clauses which require patients and their families to settle disputes of care in arbitration rather than in the court system.

With the new rule, CMS (which controls over $1 trillion in Medicare and Medicaid funding) will prevent nursing homes from forcing serious claims like elder abuse, sexual harassment, and wrongful death into the private arbitration justice system, and into courts instead. The fine print found in nursing home admissions contracts that use arbitration clauses have hidden disputes about safety and quality of care from the public view for over a decade, but that will no longer be the case.

Scheduled to go into effect in November, the new rule will apply to all long-term care and nursing home facilities that receive money from Medicare and Medicaid – which includes almost all of them. According to Andy Slavitt , blogger and Administrator for CMS, this includes nearly 1.5 million residents in over 15,000 long-term care facilities participating in Medicare/Medicaid programs. Advocates for the new ruling consider it a major step forward in improving the care and safety of millions of nursing home residents.

A 2009 study by American Health Care Association found that the average awards to patients and families after arbitration is 35% lower than if the claimant had gone to court. The arbitration system has helped the nursing home industry reduce legal expenses, but at the cost of justice for nursing home residents and their families, even in cases of murder. However, the rule does still leave arbitration as an option in individual cases where both sides agree to it, and only future admissions will fall under the new rule.

A New York Times piece from last November brought to light the negative effects of the arbitration system on nursing home patients and their families. The article discussed several cases in which the families of nursing home residents didn’t receive justice for wrongful care because their cases were initially blocked from court. Amongst the cases included were a 100-year-old woman who had been found murdered in a nursing home after she was strangled by her roommate and another case from the family of a 94-year-old woman who died from a head wound in a nursing home in Pennsylvania.

Along with the litigation changes, NPR’s Rebecca Hersher reports that a number of new rules are being rolled out to expand regulations regarding food, medical treatment, and personnel requirements. Starting in November, nursing homes will be required to provide nourishing and palatable foods, develop a care plan for each resident within 48 hours of their admission, and due to increased fears of institutionally-spread infections and antibiotic resistance, infection prevention and control programs and plans for monitoring the use of antibiotics will be mandatory.

The new rule is being enacted after officials in 16 states and the District of Columbia urged the government to cut off funding to nursing homes using arbitration clauses, arguing that the clauses have kept patterns of wrongdoing hidden from prospective residents. A recent New York Times article reports that members of the nursing home industry have largely reacted against the changes being put forth by CMS, saying it was unnecessary to use the new rule to protect nursing home residents’ health and safety. However, with the enactment of their new rule, CMS has restored a fundamental right of millions of Americans: the right to present their case in court.