Mandatory Arbitration Agreements Banned for Nursing Homes

Published on February 16, 2017

We’ve warned you about arbitration agreements. Too many nursing homes were burying this clause in pages of admission agreements and making it mandatory for residents to sign as a condition of admission. But taking a step in the right direction, the U.S. Department of Health and Human Services has finally decided to bar pre-dispute arbitration clauses in nursing home contracts. This will take effect November 28.

What does this new rule mean? In short, it means that residents and their families will have the right to take a facility to court if they choose to do so. Keep in mind this does not mean residents can’t opt in to arbitration. It simply means a nursing home may not make it mandatory.

If you’re about to enter a nursing home or already have a nursing home contract, this rule does not apply to existing contracts or those contracts signed prior to November 28. If you’d like to change this term and it’s near the November 28 deadline, ask the facility to renegotiate or remove these terms. If the facility refuses, a resident does have the right to move to a new nursing home, though we recognize this is often impractical for elderly residents. Once you sign an arbitration agreement, you are bound by it, so if you find this language in any contract, consult an attorney to consider your options.

A myth you may have heard is that arbitration agreements cost less than a lawsuit. This may be the case for the facility, but it’s not always the case for consumers. Arbitration agreements are essentially a private legal system. Because of this, consumers are left with fees and costs that they wouldn’t face in a trial, such as administrative fees paid to the American Arbitration Association.

Lastly and often times most importantly to our clients, arbitration agreements are usually required to be confidential. Therefore, the wrongdoings of a facility, as well as the abuse or neglect by a caregiver are often not exposed to the public. This means the same mistreatment of elderly residents in a nursing home could continue despite your family taking the facility to arbitration.

Don’t let a facility or caregiver get away with their wrongdoings. Contact the expert Phoenix personal injury attorneys at Knapp & Roberts for a free initial consultation. We’ll listen to your story and walk you through all your options in seeking justice. Contact us at 480-991-7677 or fill out the Do I Have a Case form on our website and we’ll contact you quickly. Together, we can fight for your loved one’s rights and work to ensure the same abuse doesn’t happen to someone else.

You can read more about the federal government’s changes to mandatory arbitration agreements in contracts, as well as more changes they have made in the full document.