Maryland Attorney General Brian Frosh is leading a group of 18 attorneys general opposing a federal agency plan to revise a rule prohibiting pre-dispute binding arbitration clauses in long-term care contracts. The revisions would allow such arbitration requirements.
Frosh and the other attorneys general submitted comments to the Centers for Medicare and Medicaid Services, which announced in June that it would change the original rule developed under the Obama administration banning binding pre-dispute arbitration.
“Our loved ones in nursing homes are already at their most vulnerable,” Frosh said in a statement. “Forcing them to arbitrate claims when they are mistreated robs nursing home patients of fundamental rights. The Trump Administration proposal to reverse the existing rules will cause consumers to suffer and will enrich unscrupulous nursing homes and long-term care facilities that take advantage of them.”
The original rule prohibiting the binding arbitration went into effect Oct. 4, 2016, but was frozen after The American Health Care Association and several nursing homes sued for preliminary and permanent injunctions. A preliminary injunction was granted Nov. 7.
In announcing the lawsuit, the American Health Care Association argued that pre-dispute arbitration clauses helped bring speedy resolutions to residents and their families.
That case is on hold while the Centers for Medicare and Medicaid Services revise the rule.
The rule revision would put several requirements in place for the arbitration agreements but would otherwise allow them and would remove the prohibition against pre-dispute binding arbitration.
Under the original rule, agreements for binding arbitration must be in plain language and explained to the resident in a language they understand. The resident must acknowledge that he or she understands the agreement.
Frosh led a group of 16 states in 2015 to comment on the original rule proposal to prohibit pre-dispute binding arbitration. In those comments, Frosh argued that pre-dispute binding arbitration would be unfair to residents and their families.
“This is especially true when consumers are making the difficult decisions regarding the long-term care of loved ones,” Frosh wrote at the time. “These contractual provisions may be neither voluntary nor readily understandable for most consumers. Often consumers do not recognize the significance of these provision, if they are aware of them at all, especially in the context of requiring care in a nursing home.”
Maryland Sen. Chris Van Hollen co-signed a letter from fellow Democratic U.S. senators, led by Minnesota Sen. Al Franken, opposing the rule change.
In their letter, the senators, argued that only post-dispute voluntary arbitration would be acceptable.
Consumer groups, including AARP, the Fair Arbitration Now Coalition and the Long Term Care Community Coalition, also have opposed the repeal of the arbitration prohibition. Comments on the revision were due Monday.