Forced Arbitration by Nursing Homes Set to End

It is common practice these days for arbitration clauses to be tucked into the dense language of business contracts. Many people don’t even know what they’ve agreed to unless a quarrel arises — then they find out the hard way that they signed away their right to litigate disputes. Arbitration is popular with businesses because it tends to favor them while also operating to deny individuals their day in court.

For example, arbitration clauses drafted by businesses typically establish how the arbitrator is chosen. This is directly opposite from impartial, court-appointed judges and an inherent conflict because a company-selected arbitrator has a built-in self-interest to rule for the party that has the power to choose him or her again. One analysis of more than three dozen arbitrators found that the threat of losing business was a motivating part of every decision they made.

Moreover, it is usually mandatory for the arbitration process and award to be kept confidential, which makes it nearly impossible for others to learn about the disputed conduct – keeping them in the dark about whether their claims have any merit and doing nothing to discourage companies from changing their harmful practices. Arbitration also precludes class-action lawsuits, leaving many potential plaintiffs without recourse because they can’t afford to go up against a resourceful business alone.

Forced arbitration is not limited to service contracts with well-known providers like Netflix, Discover, and Expedia. Rather, it has been used quite successfully by nursing homes – until now. On September 28, 2016, the Centers for Medicare and Medicaid Services (CMS), which controls more than one trillion dollars in Medicare and Medicaid funding, issued a rule declaring that any nursing home or long-term care facility that receives these federal monies can no longer require residents to sign pre-dispute arbitration agreements. Facilities that insist on keeping the clauses will do so at the expense of having their funding cut off. At the moment, that cost would involve 1.5 million residents.

First proposed in July 2015, the rule’s origins were based on the idea that arbitration was keeping patterns of nursing home wrongdoing hidden from prospective residents and their families. Senator Patrick Leahy observed, “The sad reality is that today too many Americans must choose between forfeiting their legal rights and getting adequate medical care.” By burying forced arbitration clauses in the fine print, vulnerable patients were forever barred from taking legal claims to court and disclosures about nursing home abuses were prevented from becoming public knowledge.

The rule will go into effect in November unless there is a successful legal challenge. It will impact only those individuals who enter nursing homes after the effective date — not current residents.

If you have a grievance with a nursing homeand are unsure about your rights, or if you have any questions about this topic, you can find out more by discussing it with the nursing home abuse attorneys at the Johnson Law Firm. We have years of experience helping people and we can help you. Our knowledgeable legal team will work closely with you every step of the way and will fight hard to get you the compensation you deserve. Based in Pikeville, KY, we proudly serve communities throughout Eastern Kentucky and beyond. Contact us by calling 1-606-433-0682 or filling out our online form.

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