The New York Times today reported that the Centers for Medicare and Medicaid Services, the federal agency that administers Medicaid, issued a new rule today barring nursing homes and assisted living facilities that accept Medicaid from requiring residents to resolve disputes through arbitration.

This is big news, because it lets seniors and people with disabilities quite literally have their day in court.

Arbitration is a forum for dispute resolution that’s used as an alternative to the judiciary.  With arbitration, instead of filing a lawsuit, going to court and arguing before a judge, you argue your case before a private arbitrator or panel of arbitrators.  There is less due process, no right to an appeal, and the proceedings are usually kept confidential.  Arbitration is generally considered more favorable to businesses, and less favorable to consumers.

Chances are good that you are subject to arbitration clauses now.  Your credit card agreement probably includes one, as do many licensing agreements for software, and other product agreements.

A previous New York Times investigation found serious problems where nursing homes required residents to sign arbitration clauses.  In one case, a 100-year-old woman was strangled to death by her roommate.  Her son alleges that the nursing home knew his mother’s roommate was a risk, yet his efforts to hold the nursing home accountable went nowhere because they went to arbitration.

Now, this rule from the Centers for Medicare and Medicaid Services will severely tamper the use of arbitration clauses.  Most long term care facilities in New Jersey accept Medicaid and will be subject to this rule.  This is a win for consumers, for seniors and people with disabilities, and will allow some of our most vulnerable citizens and their families to literally have their day in court.