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Karl A. Racine
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Attorney General Racine Urges Trump Administration to Keep Obama Rule Preserving Access to Justice for Seniors and Families

Tuesday, August 8, 2017
Rule Prevents Nursing Homes from Forcing Families into Binding Arbitration Agreements

Contact:
Rob Marus, Communications Director: (202) 724-5646; robert.marus@dc.gov
Andrew Phifer, Public Affairs Specialist: (202) 741-7652; andrew.phifer@dc.gov


WASHINGTON, D.C. – Attorney General Karl A. Racine announced today that his office, together with 16 other state attorneys general, has urged the Trump administration to keep a regulation that preserves the right of nursing home residents and their loved ones to sue care facilities for abuse and neglect. The comment letter, to the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS), comes in response to an agency announcement that it would do away with an Obama-era rule prohibiting pre-dispute arbitration clauses in nursing home and other long-term care contracts.

“These kinds of clauses are unfair to seniors and their families and limit District residents’ basic right of access to justice,” Attorney General Racine said. “We are urging the Trump administration not to force vulnerable residents to sign away their own rights to gain the care they need.”

In 2015, the District and 15 other states submitted comments to CMS in support of the regulation to bar such pre-dispute arbitration clauses. The comments noted 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.”

The attorneys general do not oppose mutually-agreed-upon arbitration agreements that are reached to resolve a dispute at the time the dispute asrises. Their letter simply opposes the imposition of such requirements on families who, under pressure, seek to admit a loved one into a long-term care facility and may not be in a position to object to the inclusion of such clauses in admission papers.

In October 2016, CMS issued its final rule, prohibiting the use of pre-dispute arbitration clauses in such agreements, citing the comments of the attorneys general in support. On October 17, 2016, the American Health Care Association and a group of affiliated nursing homes filed suit against the regulation in the Northern District of Mississippi, which issued a preliminary injunction against enforcement of the prohibition on pre-dispute arbitration clauses. On June 8, 2017, CMS proposed reversing the rule and removing the prohibition on pre-dispute arbitration clauses in long-term care contracts.

The comments filed today urge CMS to maintain the prohibition for the reasons set forth when it issued the regulation. “We believe that the prohibition on pre-dispute arbitration clauses provides an important protection for the consumers of our States at a time when consumers are undertaking a difficult and emotional decision,” the attorneys general wrote.

The letter follows a similar recent action by Attorney General Racine and counterparts opposing a congressional effort to roll back a parallel rule for financial services.

Attorney General Racine was joined by the attorneys general of California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Vermont and Washington as well as Hawaii’s Office of Consumer Protection in filing the comments.

A copy of the comment letter is attached.