Arbitration agreements would be prohibited as condition of admission under proposed federal law

Nursing homes would be prohibited from requiring or soliciting residents to sign pre-dispute, mandatory, binding arbitration agreements as a condition of admission under a bill introduced Tuesday by Sens. Richard Blumenthal (D-CT) and Mazie Hirono (D-HI). 

The Fairness in Nursing Home Arbitration Act introduced in the Senate is a companion to legislation with the same name reintroduced in the House of Representatives earlier this year. That effort was led by Reps. Linda T. Sánchez (D-CA) and Jan Schakowsky (D-IL) and was co-sponsored by Reps. Suzanne Bonamici (D-OR), Judy Chu (D-CA), Diana DeGette (D-CO), Lloyd Doggett (D-TX), Maxwell Frost (D-FL), Jerry Nadler (D-NY), Eleanor Holmes-Norton (D-DC), Bill Pascrell Jr. (D-NJ) and Paul Tonko (D-NY).

“Forced arbitration is an unfair and un-American practice, and with this bill, we provide critical protections for these individuals and their families by ensuring they will not be forced into harmful or exploitative contracts,” Blumenthal said in a statement. 

The bill would cover residents and patients who are Medicare or Medicaid beneficiaries.

“Nursing home residents deserve access to the high-quality care they need without being forced into mandatory arbitration agreements and, oftentimes, unwittingly signing away their rights,” Hirono added.

But arbitration agreements have their place, long-term care industry advocates told the McKnight’s Business Daily.

American Health Care Association Senior Vice President of Government Relations Clif Porter said that, in general, AHCA does not support legislation that bans the use of pre-dispute arbitration agreements.

“Banning arbitration agreements would eliminate a fair and efficient legal remedy that provides benefits to patients and providers,” he said.

Arbitration agreements commonly used by skilled nursing providers remain an effective tool to prevent class actions, according to the annual Duane Morris Class Action Review, published in January. The report was not specific to healthcare but noted that of all defenses, a defendant’s ability to enforce an arbitration agreement containing a class or collective action waiver may have had the single greatest impact in terms of shifting the pendulum of class action litigation.

It’s not just providers who benefit from the agreements, Porter said.

“Arbitration provides significant benefits to residents of long-term care facilities and their families,” he said. “It is fair, equitable, and does not limit the amount of money plaintiffs can receive. Arbitration is quicker and less costly than litigation in court and provides similar outcomes for claimants.”

A spokesperson for LeadingAge told the McKnight’s Business Daily that the association “has consistently supported arbitration agreements that are fair and balanced and are not made a requirement of admission to a nursing home.”