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New federal law bans mandatory arbitration laws in nursing home contracts

By October 1, 2016

The Centers for Medicare and Medicaid Services (CMS) released a new rule this past Wednesday that prohibits nursing homes from forcing binding arbitration on residents.  For years, many nursing homes in Minnesota and throughout the country included clauses in their admission contracts that required patients and families to agree in advance not to sue the nursing home, even if the patient were abused, tortured, raped, neglected, or otherwise injured or killed in the nursing home.  Instead, these nursing home contracts required patients and their families to agree in advance to have their claims handled through a secretive arbitration process chosen by the nursing home.

The Minneapolis Star Tribune quoted Mark Kosieradzki:

“Mark Kosieradzki, a Plymouth attorney who specializes in cases of nursing home abuse and neglect, said he recently won a $225,000 judgment from an arbitration panel after the death of a nursing home resident who became overly dehydrated and died from staff neglect. However, after paying three arbitrators, the family walked away with just $19,000 and no punitive damages. ‘That would never happen in court,’ he said. ‘All of those things that are supposed to streamline the process just end up stripping people of their rights and making nursing homes less accountable.’”

The Star Tribune also quoted Minnesota’s Attorney General, Lori Swanson: “’This is a hugely significant ruling for patients in nursing homes and their families,’ said Swanson, who has twice testified before Congress on the issue. ‘Like many industries, nursing homes have used these mandatory clauses to strip vulnerable people of their American right to go to court.’”

As the Star Tribune reports, “In 2009, Swanson shut down the St. Louis Park-based National Arbitration Forum, then the largest consumer credit card arbitration company in the nation, after finding that the company had deceived consumers into thinking it was a neutral arbitrator when it actually had close ties to the debt collection industry.”  Undeterred, nursing homes continued to impose these binding arbitration agreements on residents and their family; they just chose a different arbitration company to replace the National Arbitration Forum.

As the New York Times reports, “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, even in the case of murder. 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, even in the case of murder.”

The Kosieradzki • Smith Law Firm represents clients in cases involving catastrophic injury caused by nursing homes and other care facilities that fail to provide proper care.  We are committed to uncovering the truth.  Nursing homes want binding arbitration agreements because they help nursing home’s hide the truth. If you believe your loved one has been harmed due neglect or abuse in a nursing home, take action today and contact the Kosieradzki • Smith Law Firm online or call us toll-free at (877) 552-2873 to set up a no-cost, no-obligation consultation.

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