Berge & Berge, LLP Blog

Tuesday, August 11, 2015

Center for Medicare and Medicaid Services Likely to do Away With Mandatory Arbitration Agreements

What are my options if I disagree with a decision rendered by a long-term care facility accepting Medicaid?

In many states, the staggering monthly costs of long-term care are approaching $10,000 per patient – prompting the exponential growth of the practice area known as ‘Medicaid planning.’ During the Medicaid planning process, clients are counseled as to the best ways to protect their modest nest eggs from these nursing care costs while staying within the legal guidelines set forth by the Center for Medicare and Medicaid Services (CMS). 

As the number of Medicaid-eligible seniors continues to grow, so too do the number of conflicts that arise between nursing homes and patients – primarily regarding the payment of the outstanding bill, covered expenses, and similar sources of contention. 

Up until recently, patients receiving Medicaid benefits for long-term care were required to sign binding arbitration agreements in the event of conflict. These agreements essentially eliminated a patient’s right to pursue a cause of action in a traditional court of law, which also significantly limited their rights to redress and compensation in the event of fraud, negligence, or breach of contract. 

For years, patient advocates have warned against the use of these binding agreements, pointing out that many do not fully understand what they are signing at the time – and are particularly surprised to eventually find out that they unknowingly waived their right to file a formal lawsuit over issues involving Medicaid coverage. Of course, the opposite argument is that mandatory binding arbitration cuts down on litigation costs for nursing homes, which results in savings for taxpayers overall. 

As of June 2015, CMS announced a new proposed rule that would eliminate mandatory binding arbitration agreements, instead inserting voluntary clauses allowing patients the opportunity to pursue either legal option – which is already the law in California. However, as many legal experts assert, patients still feel compelled to submit to binding arbitration at the time of admissions, believing they have no other option.

However, as part of the proposed rule, nursing homes accepting Medicaid must make absolutely certain that the agreements are drafted in a way that patients can understand the language and fully understand what they are signing. 

For assistance with elder law planning in the Bay Area, including San Jose and Santa Clara Counties, be sure to contact the attorneys at Berge & Berge right away: 408-985-9918.

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