As this blog discussed in a post last month, the Centers for Medicare and Medicaid Services recently announced a new rule that would deny funding to any nursing home that includes a mandatory arbitration clause in its admission contract. Essentially, the new rule uses fiscal policy to discourage nursing homes from including arbitration clauses in their contracts. This means that abused or neglected nursing home residents will be able to use the court system – rather than a private, confidential, and often one-sided arbitration system – to resolve claims against nursing homes.
Some commentators suggest that the new rule may also lead to an overall increase in the level of care nursing homes offer to residents. According to one recent news article discussing the new rule and its potential implications across the nursing home industry, nursing homes will now be forced to deal with the claims against them in public courthouses rather than in confidential arbitration.
One of the reasons the nursing home industry favored arbitration for years was that the results of the arbitration – favorable or not – were not made a part of the public record. However, with fewer nursing homes including arbitration clauses in their admission contracts, the public will have a greater understanding of the types of claims that arise in nursing homes. This increased awareness, it is suggested, will result in nursing homes trying harder to avoid potential claims.