Rule gives nursing-home residents right to sue

A new federal rule protects nursing-home residents' right to sue the homes over bad care, forbidding contracts that force residents to resolve complaints privately.

The rule prohibits what are known as binding arbitration agreements, which are often included in the thick stacks of papers people sign when they move into a nursing home, elder care attorneys said. Only later, after something goes wrong, do they often realize they might have signed away their rights to a jury trial, attorneys said.

“I don't think it's fair to ask a person to give up a constitutional right before the dispute even arises,” said Bob Daley, principal attorney at Pittsburgh law firm Robert Peirce & Associates and chairman of the American Association for Justice's nursing-home group.

Nursing homes that receive Medicare payments must eliminate the agreements by the end of November or become ineligible for the federal reimbursements, according to the rule, published Sept. 28 by the Centers for Medicare and Medicaid Services.

W. Russell McDaid, president and CEO of nursing-home industry group Pennsylvania Health Care Association, said in an email that the organization is disappointed with the CMS rule.

McDaid called arbitration a speedier and less-costly alternative to trials. He noted that the process often includes three arbitrators — one representing the resident or family, one the facility and one independent. Costs are borne by the facilities, he said, and settlement awards go directly to families.

But the process favors nursing homes, said Kelly Bagby, a senior attorney for AARP Foundation. Nursing homes have been through the process before, while residents are usually new to it; many hire attorneys even if the dispute won't go to trial, she said.

“It's a whole different universe than what happens if somebody is injured by the care of somebody else and you just sue them in a normal setting,” Bagby said.

She said she hopes the rule will increase transparency in nursing homes. Under the current system, neither residents' complaints nor the resolution of claims may be viewed by people weighing nursing homes for themselves or family members.

“If the proceedings are all secret and no one can know about it, you cannot possibly raise awareness in other people of a problematic facility,” she said.

Even when people do read the agreements and have doubts about them, some feel they have no choice but to sign if they want family members to receive care, said Andrew Sykes, managing attorney at Sykes Elder Law in Mount Lebanon.

“Now I know I'm on solid ground when I say to a client —you don't have to sign that, and a nursing home can't deny you admission,” he said.

The rule will affect only new contracts, not those that people have already signed.

Daley said he often challenges arbitration contracts early in any dispute between a resident and a nursing home. When the challenges do go through the courts instead of arbitration, they most often settle, he said. Arbitration may still be used after the rule goes into effect, he said, but it will be up to residents and their families.

“I think it's a matter of fairness, and I think from a practical point of view, we'll see less arbitrations,” he said.

McDaid said the rule is in conflict with other federal rules and case law related to arbitration. He did not say whether the organization would challenge the rule in court.

Wes Venteicher is a Tribune-Review staff writer. Reach him at 412-380-5676 or wventeicher@tribweb.com.