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New Ruling Restores Residents’ Rights to Sue Nursing Homes

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A little over a year after it was first proposed, a new federal regulation will soon go into effect to allow residents and their families to sue nursing home operators in cases of neglect, abuse and criminal behavior. The regulation, which affects any nursing home that receives federal funds, does away with a common industry practice designed to force aggrieved residents into a process called arbitration. Officials from the nursing home industry decried the ruling while advocates for the elderly say it is long overdue.

This development has generated a great deal of news coverage. One good article that explains the change is this one published very recently in the New York Times.

The new rule, which supporters say promises to deliver several new protections and safeguards for nursing home residents, was ordered by the Centers for Medicare and Medicaid Services (CMS), an agency within the federal Health and Human Services Department. It came after a lengthy review of a practice which is common in the industry, to include in the residency agreement a clause forcing residents to accept arbitration and relinquish their right to sue. This practice has come under fire as being unfairly biased toward the operators of nursing homes. The demand that residents and families take disputes to arbitration was typically part of the contract signed by new residents at the time of move-in, often under stressful circumstances and without full understanding of the legal implications.

“Clauses [requiring arbitration] embedded in the fine print of nursing home admissions contracts have pushed disputes about safety and the quality of care out of public view,” writes the New York Times. “The system has helped the nursing home industry reduce its legal costs, but it has stymied the families of nursing home residents from getting justice.” The article cites cases of sexual abuse, physical abuse, even murder of one resident by another. In each case, the demand for arbitration kept these stories out of the public eye and, the article implies, forced families to accept settlements that were unjust and completely in favor of the nursing home operators.

The Times article calls this change “the most significant overhaul of the agency’s rules governing federal funding of long-term care facilities in more than two decades.” The new ruling, which the industry could challenge in court, will go into effect next month (in November 2016) and is not retroactive, meaning that it only affects new nursing home admissions. Current arbitration contracts would remain in effect. (About 1.5 million residents live in nursing homes affected by this ruling, report the Times.)

According to the article, the nursing home industry has argued that arbitration “offers a less costly alternative to court. Allowing more lawsuits, the industry has said, could drive up costs and force some homes to close.” But officials at CMS and also many elder care lawyers feel quite differently. These advocates suggest the true rationale is to “potentially keep embarrassing practices under wraps.” Most arbitration proceedings include non-disclosure requirements where the terms of settlements are not disclosed.

So the bottom line, we would argue, is that this change is good news for consumers, creating more of a level playing field and restoring at least some fairness for nursing home residents and their families. We’ll keep you posted on our blog and on our radio programs as this change moves forward.

Getting objective information about retirement decisions is definitely a challenge. Here at AgingOptions, we want to be your objective guide as you make a whole host of retirement-related decisions, including choosing where you will live. If you need advice on how best to evaluate nursing facilities, assisted living options or any senior housing choices, contact us and we can help you by providing sources of information you can rely on, instead of blindly trusting salespeople and marketing agencies. And for all your retirement planning considerations – finances, legal affairs, family communications and medical protection – we encourage you to explore the comprehensive process we call LifePlanning. Your LifePlan becomes your blueprint to help you build the secure and satisfying retirement of your dreams.

To learn more about LifePlanning, and about other vital facets of preparation for retirement, we invite you to attend a free, no-obligation LifePlanning Seminar, offered at locations throughout the area. Click on the Upcoming Events tab on this website for dates, times, locations and online registration. Or contact us during the week and let us assist you. It will be a pleasure helping you make smart choices as you plan for your retirement future.

(originally reported at

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