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After over a decade of  intense advocacy, the Centers for Medicare and Medicaid Services (CMS) has finalized a rule that will ban nursing homes and long term care facilities from requiring their residents to “agree to” pre-dispute arbitration as a condition for receiving federal money through Medicare and Medicaid. The practical impact of this rule will be that the overwhelming majority of nursing homes will cease their practice of forcing residents to sign pre-dispute arbitration agreements.

In part the new rule says: Binding Arbitration Agreements: We are requiring that facilities must not enter into an agreement for binding arbitration with a resident or their representative until after a dispute arises between the parties. Thus, we are prohibiting the use of pre-dispute binding arbitration agreements.

Binding arbitration clauses are often found in the small print, buried at a bottom of a document that must be signed in order for a resident to have access to a nursing home where they need to be living. These binding arbitration clauses have historically been used by facilities to deny injured residents or their families the right to litigate a case against the nursing home and responsible parties in a court of law. This means that injured residents and their families were ultimately denied the right to have a jury of their peers decide the issues of negligence and damages in a case against a federally funded nursing home.  The arbitration process frequently benefited the nursing home, at the cost of the injured resident.

Often times nursing homes residents are those individuals in our community who need the most protection. With the CMS rule that will ban pre-dispute arbitration clauses, victims of nursing home neglect and abuse will be entitled to a fair litigation process in a court of law and their day in court in front of a jury of their peers.


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