Do you know about the new arbitration rules?

By Steve Moran

The first headline I saw was from the New York Times:

US Just Made It a Lot Less Difficult to Sue Nursing Homes

and then . . .

New Rule Will Stop Many Nursing Homes From Stripping Residents of Their Right To Sue  

And The Industry:

LeadingAge Comments on Nursing Home Final Rule

AHCA Statement on CMS Final Rule Requirements of Participation

Senior Housing News: CMS Bans Arbitration Agreements in Long-Term Care

McKnight’s CMS final nursing home rule bans pre-dispute arbitration agreements

CMS rules against SNFs

It is clear the industry is extremely unhappy about this, but I find myself wondering if it really means anything at all and, if so, what?

Why We Are Here

The why part is fairly simple in terms of defining it. Here are the top four:

  1. It is easy . . . and at least in part, fair to blame the legal profession. They are too often blood-sucking vultures just looking for a case that will make them money. Nursing homes are perfect targets because it is easy to to work up the emotions of jurors over real or fake abuses.  

  2. Care for elders is messy. The ultimate outcome for most nursing home residents is dying and, if we are honest, nursing homes mostly prolong that process in what is oftentimes a very hard emotional journey.  

  3. People make mistakes. We know sometimes things go wrong at every level of the healthcare system because people make honest mistakes. Further, sometimes even when right decisions are made things go wrong. 

  4. There are bad operators and bad people. We don’t as an industry spend much time talking about the fact that there are people out there in our business that do a crummy job. They hire carelessly, they provide care that just barely meets the legal requirements, they cheat and they cut corners.   

Is This a Disaster?

I want to start by saying this is not good. It will likely increase costs.  

I also don’t think this is all bad. Here is why . . .

The reality is that some individuals and some families have been cheated out of fair compensation because of arbitration rules. It has also allowed poor operators to continue shabby operations. This is not right. Maybe what would have been much better would have been for the industry to suggest a new way of dealing with these kinds of disputes that would actually give residents and their families some additional rights within the construct of arbitration. Something that would allow a fairer compensation level and would expose bad operators to more light.

Why It Is Not So Bad . . .

There are several reasons why this will not be so bad . . .

  1. It appears that the existing arbitration clauses will not be impacted.

  2. It does not preclude offering arbitration to a resident and their family. I am guessing that presented appropriately most folks will still sign the agreement. Something along the lines of, “This is an optional document, but it requires that if we get into a legal disagreement, something that essentially never happens, we would go to arbitration allowing us to come to resolution more quickly with fewer legal fees.”

  3. Even today most lawsuits are settled rather than litigated. There is no doubt that it is more costly to to get to that point, but that is what will continue to happen.

Your thoughts?