Pre-dispute arbitration clauses should be banned, senators say

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Sen. Al Franken (D-MN) was the lead signer of the letter to CMS
Sen. Al Franken (D-MN) was the lead signer of the letter to CMS

Arbitration clauses inserted into nursing home admission contracts do not adequately protect residents' rights, and should be outright banned, senators urged the Centers for Medicare & Medicaid Services in a letter this week.

The letter, signed by 34 Democrats including lead signer Sen. Al Franken (D-MN), said recent efforts by CMS to improve resident awareness of arbitration clauses are “well-intentioned,” but ultimately complicate any future disputes and fail to improve safety. Language aimed at improving resident awareness of the clauses was included in July's proposed rule for long-term care facilities.

The senators recommended CMS prohibit the use of binding pre-dispute arbitration clauses in nursing home contracts in order to “ensure that residents and their families are not deprived of their rights.”

“All too often, only after a resident has suffered an injury or death, do families truly understand the impact of the arbitration agreement they have already signed,” the letter states.  

The letter stresses that nursing home residents and their families should only enter into arbitration agreements after an incident has occurred, allowing them to consider all of their legal rights.

Clif Porter, senior vice president of government affairs and public policy at the American Health Care Association, said his organization disagrees with the views expressed in the senators' letter.

“We believe this is a matter Congress has already addressed through the Federal Arbitration Act (FAA), and rulemaking on this issue is unnecessary,” Porter wrote in an email to Bloomberg BNA.