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October 15, 2015

AG Jepsen Joins Colleagues in Siding with

Consumers in Long-Term Care Facilities

Centers for Medicare and Medicaid Services Should

Prohibit Binding Arbitration Clauses in Contracts

Attorney General George Jepsen joined fifteen other attorneys general in strongly opposing pre-dispute arbitration clauses in long-term care facility contracts.

Urging stronger consumer protection in comments submitted to the Centers for Medicare and Medicaid Services (CMS), the attorneys general contend that an individual entering a nursing home or other long-term care facility, or family members acting on their behalf, are often making a healthcare choice under stressful circumstances, making it difficult to be rational or informed when deciding the resolution of future disputes.

In the submitted comments, the attorneys general wrote that “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 seek judicial redress for our claims. 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.”

“While arbitration can be used to resolve such disputes, the decision to do so should not be taken out of the hands of consumers prior to a conflict arising,” said Attorney General Jepsen. “The worst time for a vulnerable person or his or her family to decide the means to resolve potential future disputes is at the time of admission to a nursing home.   It is simply unfair to ask someone in that difficult and delicate circumstance to enter a binding arbitration contract.”

The use of binding arbitration agreements can have negative consequences for consumers, such as less accountability of the long-term care industry, lower awards when an arbitrator finds in the consumer’s favor and a reduced incentive to change unlawful or harmful practices.

In many instances, a resident or family member discovers the existence of a binding arbitration clause after a dispute occurs or a tragic event happens. It typically requires that claims against the business – even for cases of abuse or neglect – must be brought before a private arbitration provider chosen by the facility, prohibiting consumers from filing suit.

The position of the attorneys general is consistent with that of the American Arbitration Association, which determined in 2003 that it would not administer healthcare arbitrations between patients and service providers that related to medical services unless all parties agreed to arbitration after the dispute occurred.

Connecticut joined California, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington and the District of Columbia in submitting comments to CMS.

Please click here to view the entire comments.


Media Contact:

Robert Blanchard
860-808-5324 (office)
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Twitter: @AGJepsen