When you sign a contract to enter a long-term care facility, the document often contains what is called a pre-dispute arbitration clause.
It means that right up front, you agree to let a third party settle any dispute that might arise, rather than resorting to a lawsuit.
The attorneys general from 16 states have sent a petition to the Centers for Medicare and Medicaid Services (CMS), strongly opposing pre-dispute arbitration clauses in long-term care facility contracts.
“While arbitration can be used to resolve such disputes, the decision to do so should not be taken out of the hands of consumers prior to a conflict arising,” said Connecticut Attorney General George Jepsen. “The worst time for a vulnerable person or his or her family to decide the means to resolve potential future disputes is at the time of admission to a nursing home. It is simply unfair to ask someone in that difficult and delicate circumstance to enter a binding arbitration contract.”
No time to weaken provisions
The state officials say consumer protection provisions of these contracts should be strengthened, not weakened. They contend that an individual entering a nursing home or other long-term care facility, or family members acting on their behalf, are often making a healthcare choice under stressful circumstances, making it difficult to be rational or informed when deciding the resolution of future disputes.
"Arbitration can be a preferred method of resolving disputes, but that decision should not be taken out of the hands of consumers long before a conflict is ever contemplated," said Maryland Attorney General Brian Frosh. "The worst time to provide a waiver of patient rights like this is when you or a loved one are going through the difficult process of entering a long-term care facility."
In their written comments, the attorneys general argued that pre-dispute binding arbitration agreements in general can be unfair to consumers, jeopardizing one of the fundamental rights of Americans – the right to be heard and seek judicial redress for our claims.
“This is especially true when consumers are making the difficult decisions regarding the long-term care of loved ones,” the attorneys general wrote. “These contractual provisions may be neither voluntary nor readily understandable for most consumers.”
Connecticut and Maryland joined California, Delaware, Hawaii, Illinois, Iowa, Maine, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia in submitting comments to CMS.
In recent years, courts have been chipping away at arbitration clauses in all sorts of consumer contracts, in particular banking and telecommunications.
In the case of nursing homes, the attorneys general say their position is consistent with that of the American Arbitration Association, which determined in 2003 that it would not administer healthcare arbitration between patients and service providers that related to medical services unless all parties agreed to arbitration after the dispute occurred.