Consumer Groups, Coalition, Rep. Waxman Call for an End to Forced Arbitration in Nursing Home Contracts | The American Association For Justice Archive
For Immediate Release: October 14, 2015

Consumer Groups, Coalition, Rep. Waxman Call for an End to Forced Arbitration in Nursing Home Contracts

Nursing Homes Often Push Residents to Sign Away Their Right to Hold Them Accountable in Court for Abuse or Neglect
Ben Somberg

WASHINGTON, D.C. – The Centers for Medicare and Medicaid Services (CMS) should prevent nursing homes from taking away the legal rights of their residents through the use of forced binding arbitration, said consumer and public interest organizations including AARP, members in the Fair Arbitration Now coalition, and former U.S. Congressman Henry Waxman.

The organizations submitted formal comments to CMS along with more than 50,000 individual petition signatures urging the agency to eliminate the use of forced arbitration by nursing home facilities that receive federal funding through the Medicare and Medicaid programs.

Additionally, 27 members of Congress submitted a letter to CMS this morning calling for a strong rule to prohibit forced arbitration in nursing home agreements. Today is the final day for public comments on CMS’s pending update of nursing home standards.

Forced arbitration clauses are unfair terms that block seniors and their loved ones from accessing the court system if they are the victims of severe neglect, abuse, serious injury or death at the facility. Such forced arbitration clauses, where residents surrender their legal rights before any disputes arise, often prevent families of those abused or neglected in nursing homes from holding the companies accountable through the civil justice system. Instead, they are pushed into private, biased arbitration forums where consumers are at a disadvantage and where there are no appeals, no accountability and no transparency. 

On a call with reporters today, Waxman—who was a leader in passing the Federal Nursing Home Reform Act in 1987 after a spate of revelations about substandard care in many nursing facilities—called for an end to forced arbitration in nursing home contracts.

“Admitting a loved one to a nursing home is already an emotionally difficult moment in a person’s life. Adding fine print to the resident forms that deny patients and their families their fundamental right to hold the corporations that run these facilities accountable is unconscionable,” he said. “As an original author of the Federal Nursing Home Reform Act, I strongly urge the CMS to limit the use of pre-dispute forced arbitration clauses. No one should be forced to accept denial of justice as a price for the care their loved ones deserve.”

In July, CMS proposed new rules for nursing homes that receive federal funding that acknowledged the burdens of arbitration clauses on residents harmed by nursing homes, but neglected to put an end to the practice. CMS proposed small revisions that unfortunately would have little effect on nursing homes’ ability to force residents to unwittingly forfeit their rights to go to court if a dispute arises and could make protecting nursing home residents from harm even more difficult. The groups called upon the agency to ensure that any arbitration is truly voluntary by preventing its use before a dispute occurs. The parties could still agree to arbitration, but only after a dispute occurs.

The Fair Arbitration Now coalition is supported by more than 70 consumer, labor, legal and community organizations.

Included below are quotes from AARP, Alliance for Justice, American Association for Justice, National Association of Consumer Advocates, National Consumer Voice for Quality Long-Term Care and Public Citizen:

David Certner, Legislative Counsel & Legislative Policy Director at AARP: “AARP recommends that CMS revise its proposal so that arbitration agreements in long-term care facilities are permitted only when the agreement to arbitrate is made after a dispute arises. This ensures that residents are knowingly and voluntarily entering these agreements.  Mandatory binding arbitration agreements are completely inappropriate where health and life are at risk.”

Kyle Barry, Director of Justice Programs at Alliance for Justice: “Imagine having a loved one abused or neglected by the very place entrusted with their care, only to find out that you can’t hold the institution accountable in court. That’s what forced arbitration does to vulnerable senior citizens and their families.”

Linda Lipsen, CEO of the American Association for Justice: “Too often seniors are abused or neglected in nursing homes, and rather than fix the problem, the companies shield themselves from being held accountable with the use of forced arbitration. CMS can make nursing homes safer by ensuring they can be held responsible through the civil justice system if they mistreat their residents.”

Christine Hines, Legislative Director of National Association of Consumer Advocates: “Terms that require residents to resolve disputes in secret forced arbitration proceedings help nursing homes to keep serious health and safety violations under wraps for too long. On the other hand, restoring residents’ access to justice will increase nursing homes’ incentive to provide better care to residents, which ultimately will save health care costs.”

Marybeth Williams, Public Policy Associate at the National Consumer Voice for Quality Long-Term Care: “One of the most critical improvements CMS could make in the federal nursing home regulations would be to ban the use of pre-dispute arbitration agreements by facilities. In our experience, such agreements never are good for consumers and never are made on a consumer’s initiative.  Instead, they are drafted by facilities and signed by consumers who feel that they do not have the freedom to say ‘No.’ Unlike disputes with a bank or cell phone provider, disputes that arise in nursing homes often involve catastrophic events such as pressure sores, malnutrition, dehydration, asphyxiation, sexual assault, and death. Residents and their representatives cannot reasonably foresee such tragedies occurring when these agreements are presented to them. CMS’s proposed language would be ineffective and, worse yet, would suggest that pre-dispute arbitration agreements are approved by the agency. CMS must make the right choice for residents and ban the use of pre-dispute, arbitration agreements by nursing homes once and for all.”

Susan Harley, Deputy Director of Public Citizen’s Congress Watch Division: “Nursing home admission often takes place under stressful conditions like the aftermath of a recent hospital stay or medical emergency. It is unfair that in the midst of such challenging circumstances, residents and their family members are presented with nonnegotiable documents which likely contain forced arbitration clauses requiring residents to surrender their right to bring legal claims against the facilities in court if something goes wrong. Such clauses should be banned and CMS has the power to do it. We eagerly await their action.”


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