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Trump Administration Abandons Fight for Ban on Nursing Home Arbitration Clauses

What little hope remained that arbitration clauses would disappear from nursing home admission paperwork is now gone. Friday, June 2 was the deadline for the Trump Administration to submit paperwork to continue the appeal of a Mississippi Supreme Court judge’s decision to block a ban on nursing home arbitration clauses.  Instead, the administration decided to withdraw from the fight.

An Attempt to Restore Justice
Last September, the Centers for Medicare and Medicaid Services (CMS) released their updates to nursing home regulations for the over 15,000 facilities that currently receive Medicare and/or Medicaid support. One of the biggest changes was a ban on mandatory arbitration clauses in nursing home admission paperwork. An arbitration clause requires a potential plaintiff to agree to forgo a trial by jury and work with an arbitrator who will attempt to get both sides to come to an agreement on a settlement. The problem, besides the fact that it forces vulnerable Americans to waive their seventh amendment right to a trial, is that nursing home arbitration typically favors the defense by allowing them to select the arbitrator. Evidence has shown that when nursing home disputes are settled by arbitration, the outcome tends to be more positive for the guilty party and not the injured victim.

Special Interest Groups Fight Ban
Last December, a nursing home special interest group filed an injunction in the Mississippi Supreme Court to stop CMS’ arbitration ban from taking effect. A judge supported the injunction and since then, CMS and the Trump administration were said to be working on a appeal. Unfortunately, instead of filing paperwork to continue their appeal, U.S. Department of Justice attorneys decided to abandon the fight.

Evil and Misguided Reversal
While there is a small chance that the appeal could be challenged again at the district level, CMS hasn’t discussed further plans for appeal and is instead said to be releasing new rules this Thursday, June 8. Those who have been able to review the rules said that in addition to eliminating the ban on arbitration agreements, another notable change was noticed; one that also sides with conducting business at long term care facilities but completely ignores resident’s rights. CMS has removed any language regarding selection of a mutually agreed upon arbitrator who will handle disputes at a mutually agreed upon location.

In an attempt to save a bit of face and distract from the fact that they suddenly and mysteriously changed course on their stance on arbitration agreements, CMS has added rules that outwardly appear to protect residents.

  • Long term care facilities must post signage in public areas regarding the use of arbitration agreements at their facility
  • Arbitration clauses must be worded in a way in which everyone can understand
  • A facility must explain the existence of a mandatory arbitration agreement, explain what it means, and get the resident/their loved one’s agreement to the clause

While all of this may seem helpful, the truth is that if a facility has an arbitration clause, residents have no choice but to sign them. Refusal to sign an arbitration agreement means the facility will deny your loved one admission and will leave families in the dire situation of having to agree to waive their legal rights or finding another place to call home.

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