Nursing Home Residents Granted Right to Sue

Accepting Clients Throughout New Jersey Including Hackensack, Bergen County, Newark & Essex County


young woman assisting elderly woman

A major change is coming to the way nursing homes and their residents negotiate contracts. The Centers for Medicare & Medicaid Services (CMS) has announced that all long-term care facilities that receive any compensation from Medicaid and/or Medicare will be barred from imposing mandatory, pre-dispute, binding arbitration clauses in residency contracts.

As longtime legal advocates for seniors and their families, the lawyers at Eisbrouch Marsh applaud these efforts at elder care reform and express optimism that additional reforms in the future will continue to broaden the legal rights of families.

What is binding arbitration?

Pre-dispute binding arbitration clauses have been a standby of long-term care facilities for decades. Facilities use these clauses to protect themselves from lawsuits in the event that a resident suffers from nursing home neglect or abuse. Families often agree to these clauses because they lack understanding of what the legal terminology means or simply because their loved one needs a room and there are no other options.

When a nursing home contract has a pre-dispute arbitration clause, this means that if the family encounters a problem with the nursing home or the care provided, the family is forced into binding arbitration. The family cannot file a lawsuit instead to pursue justice on their own terms.

Arbitration is often confused as being essentially the same as mediation, but the two are vastly different. Mediation is non-binding, which means that if the parties do not agree to a resolution, they may take the case to court instead. Arbitration hearings, presided over by judges, do allow each side to argue their case. However, the presiding judge issues a ruling to settle the case. Families who are forced into arbitration often find themselves on the receiving end of unfavorable outcomes or paltry settlement sums.

What legal options will families have?

CMS proposed banning pre-dispute arbitration clauses in July 2015. Now that the new rule has been approved, it will go into effect in November 2016. Families will still have the option to choose arbitration if they wish, but they will not be forced to sign a contract that gives up their right to pursue a personal injury lawsuit.

When a loved one becomes the victim of negligent or abusive nursing home staff, the family will have greater legal rights and options to protect their loved one. If you believe that your senior loved one is in imminent danger of harm, you should call 911 or your local law enforcement agency immediately. Otherwise, contact a lawyer right away to discuss the next steps to take. Your lawyer will offer guidance on filing complaints with the appropriate agencies. And when binding arbitration clauses are officially banned, your family may have the option to move forward with a lawsuit against the nursing home.

Eisbrouch Marsh elder abuse lawyers

For more than 25 years, the legal advocates of Eisbrouch Marsh have been defending the rights of families throughout New Jersey and New York. Our nursing home abuse lawyers can review your case, free of charge and at no obligation, and explain your legal rights and options. Schedule a one-on-one, confidential consult today by calling 201-342-5545.


  1. NPR, New Rule Preserves Patients' Rights To Sue Nursing Homes In Court,
  2. Consumerist, New Rule Will Stop Many Nursing Homes From Stripping Residents Of Their Right To Sue,