Following the enactment of a new federal rule that prohibits the enforcement of arbitration agreements by nursing homes that accept federal funding (virtually all of them), a group of nursing home operators and industry trade groups are challenging the rule. Interestingly, they are doing so through the very avenue of recourse they are seeking to deny nursing home abuse and neglect victims: A lawsuit.
In case you aren’t familiar with arbitration, it is procedure whereby legal disagreements and disputes are resolved by an arbitrator rather than a judge. The process is often secretive and arbitrators, rewarded handsomely with contracts from large nursing home corporations, often decide cases in favor of the companies. Even when the terms are more or less favorable to the plaintiff, damages awarded are often a fraction of what they would be had the matter been resolved in court. Arbitration agreements are binding contracts that patients and family members enter into by signing documents often buried in nursing home admission paperwork.
The lawsuit, American Health Care Assn. et al v. Burwell et al, was filed in the U.S. District Court for the Northern District of Mississippi, Oxford Division. The lawsuit, which names the Secretary of Health and Human Services and the acting administrator of the Centers for Medicare and Medicaid Services (CMS), labels the arbitration clause ban as capricious and arbitrary. The measure also contests the authority of CMS to act as a regulatory agency calling the shots on how nursing homes handle disputes. Plaintiffs in the litigation are asking the federal court to, at the very least, delay the enactment of the ban (the rest of the rule solidifies as law this month) while the court weighs the challenge by the industry group. Continue reading →