Centers for Medicare & Medicaid Services Proposes Rule to Reverse Ban on Nursing Home Arbitration Agreements
By Michael A. Vercher, Partner
On Oct. 4, 2016, the Obama administration published a rule that, in its final form, banned pre-dispute arbitration agreements in nursing home contracts.
The ban was put on hold pending the resolution of litigation instituted by the American Health Care Association (“AHCA”) and other interest groups, but a proposed rule by the Centers for Medicare & Medicaid Services (“CMS”) issued on June 5, 2017, would rescind the absolute ban on arbitration agreements in nursing home contracts.
However, the CMS revisions would place certain new limitations on arbitration agreements including:
- All agreements for binding arbitration must be in plain language.
- If signing the agreement for binding arbitration is a condition of admission into the facility, the language of the agreement must be in plain writing and in the admissions contract.
- The agreement must be explained to the resident and his or her representative in a form and manner they understand, including that it must be in a language they understand.
- The resident must acknowledge that he or she understands the agreement.
- The agreement must not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including federal and state surveyors, other federal or state health department employees, or representatives of the State Long-Term Care Ombudsman.
- If a facility resolves a dispute with a resident through arbitration, it must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.
- The facility must post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors.
For more information, the proposed regulation can be found here: https://www.federalregister.gov/public-inspection/.