The Feds’ About-Face on Arbitration Agreements:
From “Fundamentally Unfair” to Not-So-Bad
This week the Trump Administration released its new rule regarding pre-dispute binding arbitration agreements (“arbitration agreements”) in nursing homes. The old rule, adopted just three years ago, prohibited the use of arbitration agreements because “there is significant evidence that [arbitration agreements] have a deleterious impact on the quality of care for [residents]” and they are “fundamentally unfair.”
Unhappy with a rule that fosters nursing home accountability for the abuse or neglect of its residents, the Centers for Medicare and Medicaid Services (CMS) revoked the ban on arbitration agreements and declared open season on residents’ rights to seek justice. Stating that the “overwhelming majority of commenters” were opposed to ending the ban, CMS nonetheless ended the ban, in a misguided effort to placate nursing homes. Unfortunately, CMS’s compromise “transparency” requirements required in the new rule, such as a statement that signing an arbitration cannot be made a condition of receiving care and a 30-day rescission period, have historically not made for a more informed resident. We have had those requirements in California for years and yet the vast majority of residents and resident representatives unknowingly sign arbitration agreements that provide absolutely no benefit to them.
CANHR encourages all resident advocates to shift their focus to Congress and their state representatives to protect nursing home residents from arbitration agreements. There is a lot that can be done. Until then, the most important thing to know about arbitration agreements remains the same: “don’t sign!” (Or if you did sign and it’s been less than 30 days, "rescind!”)