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DHHS: No More Nursing Home Arbitration Agreements

The federal government has issued a new rule that guarantees patients and their families the right to sue nursing homes and other long-term care facilities. This is huge for victims of abuse, neglect and negligence by these facilities, which have increasingly forced patients to sign mandatory arbitration agreements upon admission.elder woman

These contracts strip patients and/ or their legal representatives of the right to have their injury and wrongful death claims heard by a judge and jury. Instead, they are forced to have the dispute weighed via arbitration, which is handled either by a single individual or a panel. It’s done in secret. The results often are not favorable to plaintiffs. Even when damages are awarded, the amounts are often far less than what plaintiffs might expect at trial or even in a settlement, given that nursing homes must account for public scrutiny of their actions (or inaction) and level of care and competence.

The new rule, handed down by the Centers for Medicare and Medicaid Services (CMS) (a division of the U.S. Department of Health and Human Services) prohibits this so-called binding arbitration clause in nursing home contracts for any facility that receives money from Medicaid or Medicare. That is pretty much all of them. 

Our Boca Raton nursing home injury lawyers know this is the most significant change to nursing home policy for the Department of Health and Human Services in 20 years. It takes effect Nov. 28th, 2016.

The acting administrator for CMS released a statement saying this will be a “major step forward” in the improvement of safety and care for the 1.5 million residents who reside in the 15,000 nursing homes and long-term care facilities across the country.

The rule was initially proposed in July of 2015. The agency allowed more than a year for public comment and review, during which the administrator said CMS received 10,000 public comments.

Of course, the nursing home industry is none too happy about it, given that arbitration agreements have been extremely effective at reducing litigation costs for these facilities. The problem is, it has done so at the expense of innocent, vulnerable patients who have suffered abuse, neglect and exploitation by medical workers, staff and companies that pledged to care for them.

Take, for one of the many examples, the case of Dean Cole, a dementia patient whose condition had gotten so bad, he had even forgotten to drink water. His wife checked him into a Minnesota nursing home, after a great deal of agony and lament. During the stressful admissions process, she signed an arbitration agreement. Within two weeks, he’d lost 20 pounds. Soon after, he went into a coma. Only later did family members learn he was extremely dehydrated. He never fully recovered and died within a month. Later, when his wife sought to hold the nursing home accountable for their severe neglect leading to her husband’s death, she was denied the chance. That arbitration agreement meant the case had to go to arbitration. After paying arbitrators and expert witnesses and attorney’s fees, plaintiff was left with less than $20,000.

That’s clearly not enough, especially considering the arbitration panel was paid $61,000.

Cases like this prompted more than 50 consumer, medical, legal and labor organizations to petition the government for action to ban the disputes entirely. Thirty-four senators and attorneys general from 15 states also joined that chorus.

A study commissioned by the American Health Care Association (which represents nursing homes) found that arbitration awards were, on the whole, 35 percent lower than those where plaintiffs had gone to court. Although the AHCA insists it allows consumers to receive an expedited damage award, that’s of little consolation when the damages are slashed by more than a third.

In addition to the changes to litigation, the new rule also widens requirements nursing homes must meet for food, medical treatment and personnel training. Nursing homes also must develop anti-infection policies and programs.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

New Rule Preserves Patients’ Rights To Sue Nursing Homes In Court, Sept. 29, 2016, By Rebecca Hersher, NPR

More Blog Entries:

Nursing Home Operator Jailed in Florida for Alleged $1 Billion Health Fraud, Oct. 15, 2016, Boca Raton Nursing Home Lawyer Blog

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