Of arbitration victories and payback

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John O'Connor
John O'Connor

EDITOR'S NOTE: An earlier version of this blog referred to mandatory agreements. We have heard from at least one organization that they are typically optional. We welcome your comments below reflecting on your experience with them.

In a year already chock full of regulatory victories, last week's development might turn out to be the best of the bunch.

That's when the Centers for Medicare & Medicaid Services announced its intention to remove a ban on pre-dispute arbitration agreements.

The rule, released after the agency abandoned its appeal in a lawsuit over the matter, would allow arbitration agreements that meet certain conditions. For example, such documents would need to be written in plain language, be thoroughly explained to residents and their representatives, and be understood. That's really not much of a concession, all things considered.

The American Health Care Association/National Center for Assisted Living, the group that launched the lawsuit against federal health officials over last year's ban, quickly applauded the government's decision to back off.

“The ban was an overreach, flying in the face of the Federal Arbitration Act and Congressional intent,” AHCA/NCAL President and CEO Mark Parkinson said in a statement. “Arbitration has been proven and tested to be fair and effective. Arbitration produces swifter resolution to disputes, compensates residents without undue litigation expense for either party, and reduces the funding burden on the Medicare and Medicaid programs.”

Those are all fair points.

But if providers are just this side of ecstatic, not everyone is so enamored. Several consumer groups quickly criticized the move. One went so far as to call it a “devastating turn.”

“It's clear that nursing homes are in the driver's seat now at CMS,” said Pat McGinnis, executive director of California Advocates for Nursing Home Reform. That's a pretty strong accusation. But wait, there's more.

In the same statement, McGinnis said it is “cruel” that operators might require potential residents to sign away their right to sue. Oh well, another disgruntled voice in the wilderness. To be sure, some operators will counter that McGinnis is merely revisiting tired tropes: that the field's lobbyists have lawmakers in their back pockets, that profits matter more than care, yadda yadda.

We've heard it from those crazies before, right?

Actually, one of those crazies accusing nursing homes of delivering a substandard experience was Elma Holder. She spent a good part of the 1980s making eerily similar statements. Her criticisms eventually helped spark an Institute of Medicine investigation, which snowballed into nursing home legislation in 1987. That may have been nearly three decades ago, but that law's fingerprints are on just about every regulation skilled operators must now abide by.

To be sure, this latest arbitration development may save the industry many millions of dollars in legal costs, possibly billions. But ticking off one's customers can be a dangerous thing to do. That is, unless you don't mind the occasional avalanche.

Email John O'Connor at john.oconnor@mcknights.com.

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McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Emily Mongan.

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