Volume XXXI, Number 10
Feds Ban Use of Arbitration Clauses by Facilities
The U.S. Department of Health and Human Services issued a rule last week that will bar any nursing home or assisted living facilities that receive federal funding from inserting arbitration clauses into its contracts.
The rule goes beyond an earlier draft which had only called for improving disclosure when such clauses were included.
The use of arbitration clauses has spread over the past ten years. The U.S. Supreme Court and lower courts have repeatedly upheld their constitutionality.
Advocates for the elderly have criticized the clauses as obstructions to residents seeking justice and to providing consumers with needed information.
But providers believe argue that arbitration offer a more timely and less expensive alternative to court.
American Health Care Association President Mark Parkinson issued a statement saying the change “clearly exceeds CMS’ statutory authority and is wholly unnecessary to protect residents’ health and safety.” He added that the association is “considering the appropriate steps for it to take in light of this unjustified action.”
The rule is scheduled to take effect in November. It would only effect admissions after that date.
- Feds Ban Use of Arbitration Clauses by Facilities
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