New Federal Rule Allows Elders To Sue Nursing Homes Instead Being Forced Into Arbitration

Nursing homes and assisted-living facilities that want to receive federal money now have to risk being sued by residents who have grievances. An agency within the Health and Human Services Department late last month issued a new rule that prevents any such facility from receiving federal funding if they force their residents to resolve disputes via arbitration instead of litigation.

Currently, many nursing homes require patients seeking admission to first agree to resolve disputes through binding arbitration. Industry insiders argue that arbitration keeps costs down, however, elder-care advocates say requiring such agreements as a condition of admission to a facility are tantamount to coercion and take advantage of vulnerable adults and their families.

Arbitration, along with mediation, are types of alternative dispute resolution. Arbitration occurs when one or more people who are experts in a subject hear a dispute and render a binding decision. Arbitrators generally have formal training but do not necessarily have to be attorneys. Mediation is less rigid than arbitration and “allows for creative techniques that would not be acceptable in other settings” such as ex parte contact to find mutually acceptable solutions. Under other circumstances ex parte communication — contacting an opposing party without a lawyer being present — is not allowed.

A federal agency within the Health and Human Service Department controls more than $1 trillion in Medicare and Medicaid funding. Nursing homes and assisted-living facilities that do now comply with the new rule will not receive any of the funding. The rule is expected to affect 1.5 million residents.

Clauses in nursing-home admissions contracts mandating arbitration can even block families from seeking justice when their loved ones were murdered. Advocates for the elderly say arbitration clauses helped hide “patterns of wrongdoing” at the facilities. The new rule prevents future residents from being held in check by arbitration clauses in their housing agreements, however, residents who have already signed such agreements must abide by the terms of the contracts and agree to arbitration versus litigation.

Agreeing to arbitration generally is not in the best interest of the resident or their families, according to consumer advocates. Unlike litigation, which is conducted in a courtroom and leaves a trail of public records on industry practices, arbitrations are conducted in private and they are protected by confidentiality rules. In addition, with arbitration, a person has to pay for both their own attorney and their share of the arbitrator’s fee, whereas with a lawsuit, they pay for their attorney, but taxes pay the salary of the judge presiding over the case.

According to the official U.S. government website for Medicare, at a minimum, federal law specifies that a nursing home must protect and promote the rights of each resident. Under arbitration, that may not be the case.

If you have been injured or a loved killed at a nursing home or assisted-living facility due to the recklessness or negligence of the staff, a visitor or another resident, you may be entitled to compensation. Call the offices of trial attorneys Charles Gilman and Briggs Bedigian at 866-849-9899 or contact them online. The firm handles cases in Maryland, Pennsylvania, and Washington, D.C.