Revised arbitration rules protect nursing homes from their customers

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In recent years, corporations have used “forced arbitration” clauses in contracts for a wide variety of products and services that prevent consumers from going to court to redress a wrong and from joining class-action lawsuits against the company. Instead, the consumer must agree to have any disputes resolved through arbitration before a private, neutral third party. Properly done, arbitration is less costly, faster, and more accessible than a long and costly court case. However, companies use arbitration clauses to sidestep the court system and prevent consumers from exercising their rights to their day in court. The New York Times called the increasing use of arbitration clauses “a privatization of the justice system.”


Consumers and consumer advocacy groups have objected to forced arbitration in the nursing home industry. In 2015, the U.S. government moved to prevent nursing homes from forcing residents and their families to go to arbitration with serious claims such as elder abuse, sexual harassment and even wrongful death. The Health and Human Services Department issued a rule that bars any nursing home that receives federal funding from requiring that its residents resolve any disputes in arbitration, instead of court.


That victory for consumers has proven to be short-lived. The current administration has acted fast to weaken consumers’ ability to sue nursing homes for serious abuses. In June, The Centers for Medicare and Medicaid Services MS rescinded the ban on requiring nursing home residents and their families to submit to arbitration to settle disputes rather than going to court, according to the Washington Post. In November, the administration exempted nursing homes that violate eight new safety rules from penalties for 18 months.


The shift in the Medicare program’s penalty protocols was requested by the nursing home industry, reported Jordan Rau of Kaiser Health News. The administration is scaling back the use of fines against nursing homes that harm residents or place them in grave risk of injury.” The new guidelines discourage regulators from levying fines in some situations, even when they have resulted in a resident’s death.” Said Toby Edelman, a senior attorney at the Center for Medicare Advocacy, ‘They’ve pretty much emasculated enforcement, which was already weak.”

Richard Manger, principal of Manger Law Firm, has extensive experience in litigation and settlements, with a focus on workers’ compensation and personal injury law. We are proud of the strong relationships of loyalty and trust we develop with our clients. We go above and beyond to achieve the best possible outcome in your case. You can contact Richard Manger via email at, or by calling (336) 882-2000.

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