Nursing Home Residents' Rights Restored - U.S. Bans Forced Arbitration

Nursing home residents' rights restored.Nursing home residents now have the right to take legal action against abusive and negligent facilities. This is a huge win for residents and their families, who, until now, were forced into a private justice system called arbitration.

The federal agency that controls Medicare and Medicaid announced the new rule yesterday. The rule states that nursing homes that accept Medicare and Medicaid (nearly all do) cannot include forced arbitration clauses in their admissions contracts. This requires all residents to settle their legal disputes in arbitration - even those victimized by elder abuse and wrongful death. 

RELATED: Nursing Home Contracts Under Fire

Arbitration clauses are buried in the fine print of many different kinds of contracts, from credit cards to cell phone plans to student loans. Most people never read or understand what they're agreeing to, but they're essentially signing away their right to a fair trial. 

The government's new rule rule restores residents’ rights, ensuring they can take their legal claims to court. The New York Times estimates the rule will affect 1.5 million residents.

What is Arbitration?

  1. Judges have referred to arbitration clauses as “get out of jail free” cards for companies.

Arbitration is a way to resolve legal disputes outside public courts. Essentially, it’s a private version of the justice system, and it’s rigged in favor of large companies like nursing home chains and credit card companies. It protects corporations from lawsuits.

  1. Nursing homes prefer arbitration because it’s done behind closed doors.

Arbitration helps the nursing home industry hide its bad practices and keep victims quiet. Because arbitration is private, everything that happens – all evidence of abuse, violations and mistreatment – is hidden from the public. Unlike traditional court proceedings, which are public record.

  1. Instead of a judge, there’s an arbitrator, who is usually hired by the nursing home.

Arbitrators usually handle dozens or hundreds of claims for the same nursing home, making it an important client, and swaying their decision in its favor. Arbitrators review victim's claims and decide the law without any kind of oversight. There’s no judge, no jury. Claims are not reported to the government, and rules of evidence generally don’t apply. Arbitrators do not need to have any judicial experience, yet their decisions are final. Victims cannot appeal, and arbitrators don’t have to explain their decision.

  1. Courts cannot intervene in the arbitration process.

It’s nearly impossible to overturn signed arbitration clauses. Even illiterate residents are bound to these clauses.

RELATED: Residents' Rights Threatened by Nursing Home Contracts

The New Nursing Home Rule, Explained

  1. The new rule takes effect November 28, 2016.

As stated, it applies to nursing homes that receive federally funding, meaning any facilities that accept Medicare and Medicaid. It is the most significant change to nursing home rules and regulations in more than 20 years.

  1. The government was urged to cut off funding to nursing homes that use arbitration clauses by officials in 16 states and the District of Columbia.

The American Association for Justice (AAJ) and citizens like you also launched massive campaigns urging the government to change its rule. As members of the AAJ, we have helped support the rule on behalf of all our nursing home clients.

  1. The AAJ and senators like Al Franken have been fighting for this for over a decade.

Their fight against forced arbitration has been building over many years, and has resulted in great results like this latest rule. Their work has changed government rules in the financial sector by limiting the use of class action waivers; the labor sector, by allowing investors to take part in class actions; the education sector by prohibiting schools that receive federal funding to use forced arbitration, and the employment sector, by prohibiting companies with federal contracts from subjecting employees victimized by discrimination and sexual assault to forced arbitration.

In part, the final rule states that the government is:

Requiring that facilities must not enter into an agreement for binding arbitration with a resident or their representative until after a dispute arises between the parties. Thus, we are prohibiting the use of pre-dispute binding arbitration agreements.

The final rule is over 100 pages, and can be found here.

This means that any nursing home that requires residents to agree to arbitration as a condition of admission will not receive any federal funding. 

This will have a massive impact on resident safety, and on holding nursing homes accountable for cases of mistreatment. Now, if a resident ever has to file a legal claim against the nursing home, they will get to choose whether to resolve it in court or private arbitration. This is their constitutional right.

Real Stories of Resident Abuse and Cover-Ups

There are countless examples of how profoundly arbitration has harmed victims of nursing home abuse, neglect, and mistreatment. We recently wrote about the murder of a 100-year-old resident by her own roommate.

READ: Understanding Nursing Home Contracts

In 2014, a woman with Alzheimer’s was sexually assaulted twice in two days. She was attacked by other residents in her facility in California, and the state swiftly cited the nursing home for failing to protect her.

When her family tried to sue the nursing home, they were forced into arbitration because of the clause in her admissions contract. Eventually, they had to give up and settle with the facility.

Our Nursing Home Lawyers are Here for You

Victims of abuse and neglect in nursing homes deserve their day in court. No facility should be able to deny them that right.

We have been representing victims of nursing home mistreatment for 30 years. We are glad to have supported this stunning effort and result, which will have a profound impact on resident safety.  If you have any questions about nursing home abuse, neglect, or mistreatment, contact us for free today. We help residents and families nationwide.

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