Nursing Home Residents Get Their Day in Court

As a nursing home administrator and in my legal practice, I have reviewed hundreds of maybe thousands of nursing home admission agreements. The agreements would have the standard arbitration clause (“clause”), which would prevent the residents, if harmed, to sue the nursing home. More specifically, the clause requires such matters to be handled through arbitration, greatly limiting residents’ options. This applies to all grievances, even serious ones involving gross negligence or death.

Most residents aren’t even aware of the stipulation, which is tucked into the copious amounts of paperwork required for admission and the agreements are usually signed at a very stressful time, when someone has been discharged from the hospital. Those who are aware often do not understand its ramifications. Only when they have a grievance is the clause invoked, barring the resident from taking the matter to court and having it judged by a jury, a process widely considered more impartial than arbitration.

That’s about to change for the 1.5 million people currently in long-term facilities and participating in Medicare or Medicaid. As of November 28, 2016, the 15,000 facilities caring for these individuals will have to choose between continuing with the clause or receiving money from Medicare and Medicaid, which is almost all of the nursing homes.

The new policy has been put in place by the Centers of Medicare and Medicaid Services, an agency within the Health and Human Services Department. It is a reaction, in part, to 16 states and the District of Columbia requesting such changes be made to protect nursing home residents. There have been previous attempts to legislate against the clause, but it’s never been successful.

Nursing homes insist the clause is in the best interest of patients. Court cases are expensive. Additional legal costs will force homes to increase fees. Arbitration is also quicker and less complicated, something many individuals can appreciate.

But critics have long argued there is another motivation for nursing homes to force disputes into arbitration, and that’s the ability to keep settlements private. The public, including potential future residents, finds it difficult to research a home’s reputation as arbitration settlements are confidential. Sketchy business practices can be settled with minimal compensation while being swept under the rug.

Nursing homes are not the only businesses forcing users into arbitration. Credit card accounts, cell phone contracts, gym memberships and more are increasing use of such clauses, and the government is moving to limit the practice in multiple industries.

The policy change only affects new admissions. Previous admissions including the clause remain as is. Moreover, it does not outright ban the practice of forcing patients into arbitration. What it does do is eliminate a significant source of income from those homes which continue the practice, effectively forcing them to discard previous policies.

We routinely guide residents and their representatives regarding all aspects of the nursing home admission process, whether for a short stay (rehabilitation) or for long term care purposes.  There are huge ramifications to these agreements and they should be reviewed, prior to signing.

This article in no way constitutes legal advice of any kind and should not be relied upon as such. If you need legal advice about this or any such matter, you should hire a competent attorney.

About Author

  • Email:
  • Michael LaMagna, LNHA, MPA, JD concentrates in the areas of Medicaid and Advanced Asset Protection Planning, Elder Law, Trusts and Estates, Probate and Probate Litigation, Guardianships, Health Care Regulatory Matters, Nursing Home Placement, Long Term Care Insurance, Medicare Appeals, Social Security/SSI Litigation and Special Needs Law. If you have a question for Mr. LaMagna, please call him at (914) 437-5955.