In the arena of arbitration replacing civil litigation, Nicholas Bagley on The Incidental Economist notes how the Obama Administration decided to handle arbitration requirements in contracts in the arena of nursing homes – and the reaction of the Trump Administration:
In October 2016, the Centers for Medicare and Medicaid Services (CMS) decided to push back on mandatory arbitration. By rule, CMS adopted a novel “condition of participation” for Medicare and Medicaid. Nursing homes that participate in the programs—which is to say, all nursing homes—could no longer ask their residents to sign away their right to sue upon entering the nursing home. (The rule covered only pre-dispute arbitration; residents could still agree to arbitration once a dispute arose.) …
Predictably, the nursing home industry sued, arguing that the rule exceeded CMS’s authority. In November, a federal judge in Mississippi sided with the plaintiffs, and entered a preliminary injunction prohibiting CMS from applying the rule. The agency promptly appealed. In the meantime, for reasons I don’t fully understand—and perhaps for no good reason at all—the agency chose not only to comply with the ruling in Mississippi, but across the country.
Then President Trump took office. In early June, with little fanfare or notice, the administration dismissed the appeal and proposed to undo the change altogether. “Upon reconsideration, we believe that arbitration agreements are, in fact, advantageous to both providers and beneficiaries because they allow for the expeditious resolution of claims without the costs and expense of litigation.” The comment period is open through August 7, and the rule is likely to be finalized in 2018.
With health reform dominating the news, this volte-face has been overlooked.
Nicholas plans to explore the academic research on arbitration and nursing home safety, so if you’re looking at a nursing home in your future, you may wish to keep an eye on Nicholas. I know that no one wants to go into a nursing home, but for some of us this will be an inevitability. I’d certainly be OK with a consumer option of using arbitration; but a contractual requirement just sticks in my craw. If nursing homes are not faced with the possibility of being sued out of existence, well, I fear there is not an over-supply of ethics in this country.
At least, not based on the current crop of officials in the White House.
