Fort Wayne Indiana Personal Injury Lawyer and Attorney Blog

CMS Enacts New Rule Bars Forced Arbitration Clauses

By David L. Farnbauch

On September 28, 2016, the federal agency that oversees and regulates nursing home care, the Centers for Medicare & Medicaid Services, "CMS," issued a final rule, Section 483.70(n), prohibiting ALL federally funded nursing homes from using forced  arbitration agreements against their residents. An increasing number of nursing home facilities  across the U.S. require new residents and their families to sign agreements (that are embedded in the "fine print" of nursing home admission contracts) requiring residents to resolve any claims or disputes against the nursing home facility through binding arbitration rather than having access to the legal system. This a huge victory for consumers in the ongoing battle to hold nursing homes accountable for abuse and neglect of nursing home residents. There are more than 1.5 million nursing home residents in the U.S. and the Centers for Medicare & Medicaid Services pays nursing homes more than $1 trillion in taxpayer dollars every year for nursing home care.

Rather predictably, a group that calls itself the "American Healthcare Association" that purports to represent more than 13,000 nursing home, sub-acute nursing facilities, and assisted living facilities has already filed suit in U.S. District Court in Mississippi to block the final rule, Section 483.70(n) from taking effect on November 28th. The American Healthcare Association lawsuit contends that the ban on forced arbitration agreements exceeds CMS' authority and the group claims that only Congress can ban forced arbitration agreements. 

The American Association for Justice ("AAJ") played a pivotal role in the battle to persuade the Centers for Medicare & Medicaid Services and Health and Human Services to enact Section 483.70(n) and are to be commended for decade long advocacy on behalf of consumers regarding this important issue. 

A copy of the final rule can be found at the link below.  

Federal Register - Final Rule Section 483.70(n)