The Centers for Medicare and Medicaid Blow Opportunity to Ban Forced Arbitration

Recently the Centers for Medicare and Medicaid announced some very important, and long overdue, requirements designed to protect residents of nursing homes and care facilities from being exploited on social media through the posting of degrading videos, pictures, and audio.  I blogged about these new rules and requirements here.

While these rules and regulations were designed to prevent seniors from being exploited and abused through social media, the CMM missed an important action that could have been taken to further protect residents – banning private arbitration clauses.  As I explained in this blog posting about nursing home arbitration clauses, such clauses take away a resident’s right to take their case to trial in front of the public and a jury, and instead relegate claims to a non-public forum where arbitrators serve as both the judge and jury.

Arbitrators have a natural bias against making large awards (as this may affect their ability to be hired by defendants for future arbitrations).  As a result, the portions of verdicts that are highly subjective – like pain and suffering and punitive damages – tend to be much lower than the amounts awarded by jurors.  As a result, the harm to those injured (and to the family members who have had loved ones die due to nursing home neglect and abuse) is real and significant.

What Should CMM Have Done?

As pointed out by the New York Times in this Board Editorial, the CMM could, and should, have banned arbitration clauses completely.  While nursing homes cannot require residents to agree to private arbitration clauses (and cannot refuse to admit residents who do not want to agree to these clauses) if they are receiving federal funds, the simple fact is that most residents do not have an attorney by their side when they are signing the admissions contract.  Instead, they likely will believe that they don’t have a choice in the matter, despite what the contract may actually say.  They may also not appreciate the significant rights that they are giving up.

Moreover, the residents, and their families, are often in a very vulnerable situation when a move to a nursing home is being undertaken.  They may need to make decisions quickly.  If their loved one is in rapidly failing health, their concern will likely be more about the health of their loved one than on contract review.

It’s Easy to Conclude That Mandatory Arbitration Greatly Favors Corporations Over Individuals

Corporations have long pushed mandatory arbitration clauses in contracts concerning individuals.  Why?  Because they want to preserve privacy as much as possible, and, because it is likely that they are going to be the one being sued, the last thing they want is to appear before a jury that is sympathetic to the individual or consumer.

We agree with the New York Times Editorial Board – mandatory arbitration clauses should be banned in all nursing home and long term care facility contracts. 

 

 


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