Federal Lawmakers Resurrect Nursing Home Arbitration Ban with Proposed Bill

Two Congressional representatives introduced a bill on Thursday that would ban nursing homes from requiring — or even asking — residents to enter into mandatory, pre-dispute, binding arbitration agreements.

The Fairness in Nursing Home Arbitration Act, introduced by Democratic Reps. Linda Sánchez of California and Jan Schakowsky of Illinois, has support from a range of resident advocates and associations, including the AARP, Caring Across Generations, and the National Academy of Elder Law Attorneys.

In a statement released with her announcement of the bill, Sánchez cited her experience in moving her father into a nursing home as a reason for supporting the legislation, noting her family was focused on the services offered by a facility and the quality of care.

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“We were not focused on the language in the agreement that would limit his rights should something go wrong,” she said in the statement. “Under this bill, families will no longer have to worry about losing their right to a day in court.”

Schakowsky echoed this in her own statement, included in Sánchez’s release.

“Whether it’s willful neglect or a simple accident, residents and their families should have the right to seek justice in front of a judge and jury, and not be locked into a conference room for forced arbitration,” she said.

The Centers for Medicare & Medicaid Services (CMS) in July finalized a rule allowing SNF operators to use arbitration agreements with their residents, reversing a ban that was instituted by the Obama administration in 2016. The formal reversal of the arbitration drew fire from legislators — including Sánchez — though legal experts told Skilled Nursing News soon after that the final rule still has stringent consumer protection divisions.

“From my perspective, the final rule is perhaps the strongest version of consumer protections in connection with arbitration agreements short of an outright ban on pre-dispute arbitration agreements,” Brian McGovern, a partner at the New York office of the law firm Crowell & Moring, told SNN shortly after the arbitration rule was finalized.

The American Health Care Association (AHCA), which represents nursing homes across the U.S., released a statement pushing back on the new legislation on December 6, arguing that residents with legitimate claims are awarded “reasonable damages, oftentimes equal to the amount that would be awarded under litigation,” and that the procedure is both effective and long-used.

“AHCA does not support any bill that aims to ban the use of pre-dispute arbitration agreements,” Clif Porter, senior vice president of government relations at AHCA, said in the statement. “Banning arbitration agreements would eliminate a fair and efficient legal remedy that provides benefits to patients and providers. Skilled nursing facilities are just one of many health care providers that use pre-dispute arbitration.”

The legislation marks the second nursing home oversight proposal from Schakowsky in recent weeks; the representative, along with Democratic Sen. Richard Blumenthal of Connecticut, last month introduced a bill that would increase staffing minimums among other safety re3forms.

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