CMS Publishes Final Arbitration Rule

Regulation | July 22, 2019 | by Cory Kallheim

The Center for Medicare and Medicaid Services (CMS) published a final rule on arbitration agreements in nursing facilities on July 18, 2019. 

The Center for Medicare and Medicaid Services (CMS) published a final rule on arbitration agreements in nursing facilities on July 18, 2019. The final rule repeals the prohibition against pre-dispute, binding arbitration agreements while strengthening the transparency of arbitration agreements in long term care facilities.

Prior to October 2016, the requirements of participation for long term care facilities to participate in the Medicare and Medicaid programs contained no provisions specifically addressing arbitration agreements. An October 2016 final rule prohibited pre-dispute arbitration agreements in nursing facilities. The final rule was quickly challenged in court and a federal district court in Mississippi issued an injunction halting the enforcement of the rule pending further proceedings. In December 2016, the new administration directed the state survey agencies to not enforce the final rule while litigation was pending.

In June 2017, CMS issues a proposed rule removing the prohibition on arbitration agreements in long term care facilities and strengthening the transparency of arbitration agreements.

The final rule, which goes into effect September 16, 2019, contains the following key provisions:

  • The facility must not require any resident or his or her representative to sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the facility and must explicitly inform the resident or his or her representative of his or her right not to sign the agreement as a condition of admission to, or as a requirement to continue to receive care at, the facility.
  • If a facility asks a resident or his or her representative to enter into an arbitration agreement, the facility must ensure:
    • The agreement is explained t the resident and his or her representative in a form and manner that he or she understands, including in a language the resident and his or her representative understands;
    • The resident r his or her representative acknowledges that he or she understands the agreement;
    • The agreement prvides for the selection of a neutral arbitrator agreed upon by both parties; and
    • The agreement prvides for the selection of a venue that is convenient to both parties.
  • The agreement must explicitly grant the resident or his or her representative the right to rescind the agreement within 30 calendar days of signing it.
  • The agreement must explicitly state that neither the resident nor his or her representative is required to sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the facility.
  • The agreement may not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including but not limited to, federal and state surveyors, other federal or state health department employees, and representatives of the Office of the State Long-Term Care Ombudsman, in accordance with §483.10(k).
  • When the facility and a resident resolve a dispute through arbitration, a copy of the signed agreement for binding arbitration and the arbitrator's final decision must be retained by the facility for 5 years after the resolution of that dispute on and be available for inspection upon request by CMS or its designee.

Here is the Final Rule.