House Panel Approves Legislation That Would Invalidate Mandatory Binding Arbitration Provisions Of Nursing Home Admission Contracts

The House Judiciary Committee on Wednesday by a 17-10 vote approved a bill (HR 6126) that would ban the use of mandatory arbitration clauses in nursing home contracts, CQ Today reports (Stern, CQ Today, 7/30). The clauses require that people seeking to enter a nursing home and their family agree to waive their right to take disputes regarding care at the facility to court and must settle them through arbitration. According to CongressDaily, Democrats, who largely support the ban, defeated several amendments from Republicans that sought to cap lawyers' fees and "to weaken the ban on arbitration."

Republicans said that the measure would increase costs for Medicare and Medicaid because many nursing home residents are beneficiaries. Judiciary Committee ranking member Lamar Smith (R-Texas) said that mandatory arbitration was created in the 1990s to quell rising nursing home care costs and that banning it would "set us on the course of returning to the '90s" (Kreisher, CongressDaily, 7/31). Republicans also said that the bill would benefit trial lawyers more than nursing home patients and their families.

Proponents of the measure said mandatory arbitration is appropriate for companies but that individual consumers and their families have little ability to negotiate the terms of the contract prior to signing it (CQ Today, 7/30). Rep. Linda Sanchez (D-Calif.), chair of the Commercial and Administrative Law Subcommittee, said that many people seeking care at a nursing home and their families are unaware or do not understand the terms of the contracts and that they are giving up their right to file suit (CongressDaily, 7/31).

Sanchez said that a letter from HHS Secretary Mike Leavitt indicated that the White House would oppose the measure (CQ Today, 7/30).


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