Last month, The Centers for Medicare and Medicaid Services (CMS) issued new rules and regulations for skilled nursing care centers that receive Medicare and Medicaid funding.   This 713-page overhaul is a comprehensive revision of nursing home regulations and affects almost every aspect of the lives of residents of these facilities.
One of the significant changes included is the outright ban of pre-dispute arbitration agreements in nursing home admission contracts as a condition of acceptance.

What are pre-dispute arbitration agreements?

When a soon-to-be nursing home resident signs an admission contract containing a pre-dispute arbitration clause, he or she agrees not to file any future lawsuits against the facility, even in cases of negligence, abuse or neglect. Instead, the resident agrees to use arbitration proceedings, which are not conducted in a court of law, so no matter how serious the allegations against the facility, its practices are not subject to public scrutiny.  The resident is usually also required to pay for the arbiter, a private individual, as opposed to a judge, who is a public servant.
The signing an admission contract to a nursing home is often an enormously stressful time for both the resident and his or her family, putting them at a significant disadvantage in the process. Emotions may cloud understanding, particularly of confusing legal jargon, and rarely is there time to consult an attorney about the contract because there may be few or no alternative facilities with available beds. Moreover, the resident is about to become dependent upon the facility for personal care and may feel pressure not to “rock the boat” by starting out on an adversarial note.
So, what does a ban on these types of agreements actually mean for soon-to-be residents?

By prohibiting nursing homes from using these “unconscionable” agreements, CMS is protecting facility residents’ constitutional rights to trial - an effective remedy to redress civil wrongs.

Binding arbitration agreements may still be utilized as a means of resolving disputes between nursing home residents and facilities, but the new rules require that the agreements may only be made after the dispute has arisen, when the details and seriousness of the allegations are known. 
CMS believes the changes to the rules, particularly the ban of pre-dispute arbitration agreements, are necessary to reflect developments and advancements in nursing home safety and service delivery. In describing the changes, CMS notes that, “These revisions are . . . an integral part of our efforts to achieve broad-based improvements both in the quality of health care furnished through federal programs, and in patient safety, while at the same time reducing procedural burdens on providers.” 
 Effective Date
The ban on pre-dispute arbitration agreements goes into effect on November 28, 2016.  The new rule does not affect agreements entered into by nursing home residents and facilities before that date. 
NOTE: Unfortunately, the new rule will not apply to assisted living facilities at this time.
The field of elder law is constantly evolving as our country recognizes the needs of our aging population.  For assistance with elder law matters, contact Loftus Law Offices, PLLC today. We can be reached at 603-465-7178 and at This email address is being protected from spambots. You need JavaScript enabled to view it..