An effort by the Trump administration to roll back an obscure Medicare rule has provoked a loud, and unexpected, backlash according to multiple reports in The Hill, a newspaper that specializes in covering the federal government in general and Congress in particular. The paper reports in June an obscure regulatory body known as the Centers for Medicare and Medicaid Services (CMS) said it intends to repeal a “rule that prohibited nursing homes that accept Medicare or Medicaid funds from including language in their resident contracts requiring that disputes be settled by a third party rather than a court.”
This is an issue that I have been following for some time both in terms of this specific rule (click here to read my blog from last year when it was originally issued) and in terms of the broader question of arbitration ‘agreements’ that seek to deny ordinary Americans access to our courts when they suffer financial or physical neglect at the hands of a rich or powerful company (an issue I first addressed in 2013).
Thus, it is very heartening to see such a widespread backlash against the administration’s proposed rule changes. According to The Hill, 16 states and the District of Columbia filed formal objections to the policy change when these came due early last week. “Pre-dispute binding arbitration agreements in general can be procedurally unfair to consumers, and can jeopardize one of the fundamental rights of Americans; the right to be heard and to seek judicial redress for our claims,” the state attorneys general wrote in objecting to the proposed rule changes, according to The Hill. “This is especially true when consumers are making the difficult decisions regarding the long term care of loved ones. These contractual provisions may be neither voluntary nor readily understandable for most consumers.”
In many ways the key part of that quote is the phrase acknowledging that most people signing a nursing home contract (or a contract for cellphone service, cable television, a credit card or an extended warranty on an appliance) are likely to have little real choice when it comes to terms and conditions. The vast majority of the contracts we all sign as part of our everyday lives are not subject to negotiation in any meaningful sense.
So it is important that corporate lobbyists not be allowed to use those contracts to deny Oregonians and other Americans their right to a hearing before a judge and jury when negligence leads to injury or death, or when a company cheats its customers out of their hard earned money. This right is guaranteed by the 7th Amendment to the US Constitution which clearly states that: “in suits at common law… the right of trail by jury shall be preserved.” Companies should not be able to make anyone sign away that right – especially to relinquish it in favor of an arbitration system universally understood to favor the large companies that provide most of its funding. It is for precisely this reason that we need the courts, and that we should expect the executive branch of government to defend people’s access to them.
And if all this is true for our cellphone or cable bills how much more critical is it when it comes to healthcare and eldercare? As a Portland attorney this is a story I will keep watching. In the meantime, I urge anyone considering residential care for a loved one to look carefully at the contract before you sign it. The new federal rules are not yet in place, which means that a care facility – for now – cannot force you to sign away your rights.
ORS Chapter 124: Elderly Persons and Persons with Disabilities Abuse Prevention Act
Oregon Department of Human Services: How to Report Abuse and Neglect