Sept. 28, 2016

Federal Government Protects Nursing Home Residents Nationwide, Bans Pre-Dispute Arbitration Clauses

Statement of Susan Harley, Deputy Director, Public Citizen’s Congress Watch Division

Note: Today, the Centers for Medicare & Medicaid Services finalized a rule (PDF) to protect the residents of nursing homes that participate in Medicare and Medicaid.

Public Citizen applauds the Obama administration’s rule prohibiting “rip-off clauses” in nursing home contracts. These clauses deny nursing home residents access to the courts to seek compensation for fraud, abuse or neglect, forcing them instead to seek redress before corporate-friendly arbitrators, with hearings held in secret and few grounds permitted for appeal.

Nursing home admissions can be a stressful and confusing time for seniors and their families. They are in no position to evaluate the coercive fine-print terms in contracts, appreciate the critical rights they are giving up by entering into a pre-dispute arbitration agreement or walk away from the contract if they object to rip-off provisions.

Today’s rule is a major step forward for nursing home residents’ rights. It will improve standards of care, and enable residents and their families to hold accountable those who mistreat residents.