Elder Law

Federal rule barring forced arbitration of nursing home disputes is likely to be challenged

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Nursing home bed

A new rule that bars nursing homes that receive federal funds from forcing disputes into arbitration is likely to be challenged, according to lawyers involved in litigation over patient care.

The Centers for Medicare & Medicaid Services issued the rule on Wednesday, report NPR and the New York Times.

The rule bans pre-dispute binding arbitration clauses in contracts by long-term care facilities that receive money from Medicare and Medicaid. Scheduled to take effect in November, the rule would apply only to future admissions.

Industry lawyers told Law.com (sub. req.) that a challenge is likely to assert that the federal agency didn’t have the authority to implement the rule.

A New York Times investigation found that arbitration required by nursing homes was keeping examples of abuse and neglect out of the public eye. NPR points to another impact: A 2009 study (PDF) by the American Health Care Association found that average awards in arbitration were about 35 percent lower than awards not subject to arbitration agreements.

See also:

ABA Journal: “Lawsuits fail to bring improvements to nursing homes”

ABA Journal: “Fines against unsafe nursing homes are considered a slap on the wrist”

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