Comment: One commenter expressed concern about the higher costs of installation due to the prohibition of contested binding arbitration agreements. Because the reimbursement amount is set from the Medicare and Medicaid programs, LTC facilities cannot increase their rates for residents whose care is paid for by these programs. As a result, LTC facilities could only cover higher costs by increasing the cost of care for residents who pay for their own care and/or by reducing the amount of resources devoted to resident care. This could result in less care for all residents. Government programs could even face increased costs due to increased injuries or complications resulting from poorer care. Answer: The prohibition of indisputable and binding arbitration agreements has never been intended to disrespect residents. However, we cannot ignore the feedback we have received from patient advocacy groups and other health care providers who have expressed a number of concerns about how ARBITRATION agreements are presented to LTC residents and the harm that occurs when residents unknowingly sign arbitration agreements that later prove to be contrary to their best interests. Therefore, the intention was only to address these concerns. We also enter section 483.70(n)(2), which states that the Agreement shall not contain any language prohibiting or discouraging the resident or any other person from communicating with federal, state or local officials, including federal and state surveyors, other employees of the federal or state department of health, and representatives of the Office of the State Ombudsman for Long-Term Care. This is the same requirement as contained in § 483.70(n)(2)(iv) of the 2016 Final Rule. Commentators have informed us that a significant number of claims submitted to arbitration relate to quality of care issues. They also pointed out that the arbitral tribunal itself often did not offer beneficiaries the opportunity to claim full compensation for their damages.
Commentators have further explained that when this happens, many low-quality nursing homes continue to provide poor care because the consequences on their behavior are insignificant. In light of these comments, we have come to the conclusion that the Secretary`s legal obligation to protect the health and safety of residents requires that we create safeguards that assist residents of ltc to knowingly and voluntarily enter into arbitration agreements that allow for neutral and fair arbitration. By accepting arbitration (sometimes unknowingly), nursing home residents and their families lose their right to a lawsuit in court and instead agree that all disputes will be decided by a panel of three arbitrators, often without the right of appeal. This decision can become a problem if the family later learns that the nursing home or its staff is responsible for the injury or death of a nursing home resident. In an unexpected move, the federal centers for medicare and medicaid services are banning nursing homes from entering. Answer: When drafting and entering into an arbitration agreement with their residents, LTC entities must always comply with state law, which governs a person`s rights to legally represent or bind a resident through a power of attorney or similar instrument. We are convinced that state law would protect the rights of residents if someone signed one of these agreements without having the proper authority. A mandatory arbitration clause in a nursing home contract requires that any dispute between the family of a nursing home resident and the nursing home be submitted to binding arbitration, with the results of the arbitration remaining confidential. Comment: Many commentators have argued that allegations of abuse, neglect and misconduct are not appropriate for an arbitral award. Other commentators noted that the types of claims commonly filed against LTC facilities, such as pressure sores, bone fractures, malnutrition, dehydration, choking (due to inappropriate restrictions), sexual assault, and other criminal activity, are also inappropriate issues for arbitration. Comment: Several commentators were concerned about the impact that federal arbitration rules could have on state arbitration laws.
They expressed particular concern that a federal ordinance could be seen as a substitute for state arbitration laws aimed at protecting residents and their families. State courts have struck down arbitration agreements on charges such as lack of scruples, fraud and coercion. Other state laws protect consumers from unilateral or cohesion contracts. Commentators have argued that these safeguards cannot be overridden by the FAA because they apply to all consumer contracts and not specifically to arbitration agreements. They expressed concern that an entity might argue that compliance with the applicable rules would demonstrate that the arbitration agreement in question was not unscrupulous. Other commentators felt that arbitration requirements could conflict with existing consumer protection laws in some states and lead institutions to avoid or believe that these protections would no longer apply to residents, perhaps even those intended to prevent elder abuse. Some commentators were concerned that the institutions would argue that their arbitration agreements were fair and that the tribunal should force arbitration because they met the arbitration requirements of the federal LTC requirements. This could make it more difficult for residents and their families to challenge an arbitration agreement in court. Other commentators also pointed out that they would not do so because it was contrary to the interest of LTC institutions to get residents or their families to sign arbitration agreements that could be overturned by a state court.
Not all arbitration clauses stand up to judicial scrutiny, but assessing whether an arbitration clause is binding is a technical and complicated process. Comment: Some commenters disagreed with our proposal to require that the agreement be written in plain language, explained in a form and manner that the resident understands, and that the institution receive confirmation from the resident that they understand the agreement. They argued that these requirements did not eliminate or address what they saw as the fundamental problem: a resident`s decision to sign a binding arbitration agreement prior to the dispute could never be informed or voluntary without knowing in context what was at stake. Some commentators argued that the requirement of plain language was unnecessary, arguing that when binding arbitration agreements were allowed as a condition of admission prior to the dispute, it simply meant that the resident knew he or she had no choice. Other commentators felt that the requirements for “plain language” were so vague and unclear that they would cause confusion. They also stated that the proposed rule would not support meaningful decision-making by residents and that its implementation would reduce the health, safety and well-being of residents. These commentators explained that the decision to sign an arbitration agreement can only be voluntary and informed if the resident has been invited to sign it after the dispute has arisen. Many residents enter LTC facilities because they are unable to manage their day-to-day affairs. About half of LTC residents have been diagnosed with Alzheimer`s disease or another form of dementia. Commentators fear that failure to explain the arbitration agreement to the residents of Start Printed Page 34732 in such a way that they understand the problem may cause residents to unknowingly sign an arbitration agreement without understanding the consequences of their actions. .