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PA & WV Accidental Death Lawyer Blog

CMS Issues Rule Barring Pre-Dispute Arbitration Clauses in Long-Term Care Facility / Nursing Home Contracts for Facilities Receiving Federal Funding

An elderly loved one needs to be immediately admitted to a nursing home / long-term care facility.  In a rush and happy that a bed is found, you or the elderly person frantically rush through and sign the admission paperwork, including a contract.  A few days, months, or years later the elderly person is injured because of the nursing home’s negligence.  An attorney is retained to represent the injured person and files a lawsuit in state or federal court.  Immediately after filing the Complaint, defense counsel for the nursing home responds that  you do not have the right to maintain the lawsuit in state or federal court and have a jury decide whether the nursing home was negligent and thereby caused damages.  The reason: hidden in those documents that were signed upon admission to the nursing home existed a pre-dispute arbitration clause.  In other words, you or the elderly person agreed to give up the right to have a jury hear the claims.  Instead, the claim of negligence and damages will be heard by a lawyer or group of lawyers outside of state or federal court.

To prevent this from happening in the future, on September 28, 2016, the Centers for Medicare and Medicaid Services (“CMS”), which is part of the U.S. Department of Health and Human Services, announced that it issued a final rule prohibiting the use of pre-dispute binding arbitration agreements.  This rule only applies to long-term care facilities / nursing homes that receive federal funding from Medicare and Medicaid.  The announcement can be accessed by clicking on the following: CMS finalizes improvements in care, safety, and consumer protections for long-term care facility residents .

The new arbitration regulation becomes effective on November 28, 2016, and applies moving forward.  Thus, if the pre-dispute arbitration provision in the nursing home / long-term care facility contract was agreed to prior to November 28, 2016, the arbitration provision will not be barred by the new regulation.

The new regulation gives protection to the elderly entering into a long-term care facility / nursing home by preserving their right to a jury trial.  (Interestingly, as I previously commented on in prior blog posts, the Superior Court of Pennsylvania already refuses to enforce pre-dispute arbitration agreements in wrongful death and survival actions.  See Brosius v. HCR Manorcare, LLC, 2016 WL 1625790 (Pa. Super. April 25, 2016).).

Thus, if you find that you or a loved one will be entering into a long-term care facility or nursing home prior to November 28, 2016, you need to carefully read through the admission documents or hire an attorney, such as an attorney that focuses on elder law or one that handles nursing home negligence cases, to review the admission documents for a pre-dispute arbitration agreement.



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