It’s common practice, when being admitted to a nursing home, for the resident to sign a pre-dispute arbitration clause – a document that forces residents to agree up-front to settle future conflicts with the nursing home through arbitration rather than a lawsuit.
Now, the attorney generals of 16 states have sent a comment to the Centers for Medicare and Medicaid Services (CMS) decrying pre-dispute arbitration clauses.
More details from Consumer Affairs:
“While arbitration can be used to resolve such disputes, the decision to do so should not be taken out of the hands of consumers prior to a conflict arising,” said Connecticut Attorney General George Jepsen. “The worst time for a vulnerable person or his or her family to decide the means to resolve potential future disputes is at the time of admission to a nursing home. It is simply unfair to ask someone in that difficult and delicate circumstance to enter a binding arbitration contract.”
The state officials say consumer protection provisions of these contracts should be strengthened, not weakened. They contend that an individual entering a nursing home or other long-term care facility, or family members acting on their behalf, are often making a healthcare choice under stressful circumstances, making it difficult to be rational or informed when deciding the resolution of future disputes.
In their written comments, the attorneys general argued that pre-dispute binding arbitration agreements in general can be unfair to consumers, jeopardizing one of the fundamental rights of Americans – the right to be heard and seek judicial redress for our claims.
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In recent years, courts have been chipping away at arbitration clauses in all sorts of consumer contracts, in particular banking and telecommunications.
In the case of nursing homes, the attorneys general say their position is consistent with that of the American Arbitration Association, which determined in 2003 that it would not administer healthcare arbitration between patients and service providers that related to medical services unless all parties agreed to arbitration after the dispute occurred.
The states signed on to the letter include: Maryland, California, Connecticut, Delaware, Massachusetts, Minnesota, New York, Oregon, Illinois, Iowa, Maine, Rhode Island, Vermont, Hawaii, Washington, and the District of Columbia.
