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

The House Judiciary Committee has approved a bill that would ban the use of mandatory arbitration clauses in nursing home contracts. 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. 

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. Concerns have also been expressed 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. Department of Health and Human Services Secretary Mike Leavitt indicated that the White House would oppose the measure.