Trends in Nursing Home Arbitration: New Federal Legislation

Residents increasingly sign arbitration agreements upon admission to long-term care facilities, requiring them to submit future disputes to private binding arbitration, rather than to a court of law. Arbitration has become an appealing option because it is thought to be faster and less expensive than traditional litigation. New federal legislation may soon end this trend.

The Centers for Medicare & Medicaid Services (CMS) weighed in on the question several years ago saying that so long as quality of the care was not compromised, the issue was a matter between resident and nursing homes. As a result, enforcement is left to the courts who are instructed by the Supreme Court to enforce arbitration agreements as they would any other contract. Courts typically enforce arbitration agreements in the long-term care setting, when well drafted and properly executed.

On April 9, 2008, U.S. Senators Mel Martinez (R-FL) and Herb Kohl (D-WI) introduced the Fairness in Nursing Home Arbitration Act, seeking to prohibit enforcement of these agreements under federal law. Attorneys at the Knudsen Law Firm are carefully monitoring the developments in this area of law. Please call if you want an update.

Kevin R. McManaman