Nursing home residents and their families should have legal options in cases of abuse. Unfortunately, those options were being curtailed. Nursing home residents were among the many consumers whose rights are being affected by the rise in arbitration clauses.
Now, however, a new rule issued by the federal government can help nursing home residents take back their power to pursue appropriate legal action in the event of mistreat or other disagreements with their nursing home.
New Jersey.com reported on the growing use of arbitration clauses, and the effect these clauses have been having on the rights of seniors and other consumers.
Arbitration clauses are often found in the fine print of contracts people sign, like nursing home admissions paperwork or the paperwork which comes with a new credit card. They're found in click-thru contracts too, like the ones people click on when they download software.
These arbitration clauses require an opt-out from the civil justice system. The person signing the documents agrees not to sue, but instead to resolve disagreements in arbitration. Many of the clauses also include provisions barring class actions, so groups of people harmed by similar wrongs cannot band together to make claims.
The clauses often have the effect of making it difficult or impossible for consumers to seek legal remedies, especially in situations where class actions are forbidden and where each person's individual losses are too small to justify arbitration. For seniors in nursing homes and many other consumers, the arbitration clauses can end up preventing legal action for another reason as well: cost. The clauses sometimes require those who initiate arbitration to pay a part of the fees the arbitrator charges to resolve the dispute.
If arbitration clauses end up being a de facto bar to making claims, seniors who are victimized by their nursing home will lose their legal recourse. A senior or his family who has signed an arbitration clause may not be allowed to sue. If they try, the case could be dismissed when the defendant introduces the arbitration clause. Courts overrule arbitration clauses only in limited circumstances, when the consumers had no bargaining power when signing the contract and when the terms of the clause are unreasonably favorable to the company.
Even if a senior could arbitrate, often this resulted in less compensation than might have been available in a civil case.
The good news is, NJ.com reports Health and Human Services (HHS) has promulgated a new rule prohibiting nursing homes from using arbitration clauses if the nursing home receives federal funding. Almost all nursing homes get Medicaid or Medicare money, or some other kind of federal funds, and HHS controls more than a trillion dollars in Medicaid and Medicare funds. The sweeping ban on arbitration will protect more than a million seniors in nursing homes by ensuring they can make civil claims if they need to in order to right wrongs.