CMS Final Rule Revises LTC Requirements for Arbitration Agreements

PUBLISHED: Jul 18, 2019
Relevant to: Long Term Care

The U.S. Centers for Medicare and Medicaid Services (CMS) has published a final rule, “Medicare and Medicaid Programs; Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements” (CMS-3342-F), effective September 16, 2019. The final rule revises the requirements for arbitration agreements when they are used by long-term care (LTC) facilities to resolve disputes with their residents.

Background

On October 4, 2016, CMS published in the Federal Register a final rule titled, “Reform of Requirements for Long-Term Care Facilities” (81 FR 68688). The rule faced immediate legal challenges from the American Health Care Association (AHCA) and a group of affiliated nursing homes and due to those challenges, CMS had not yet begun to enforce the rule. This new final rule replaces the 2016 rule.

Final Rule Revisions to Arbitration Requirements

Highlights of requirements in the new final rule include:

  • LTC facilities may not require that a resident or his or her representative sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the facility.
  • LTC facilities are required to ensure that the agreement is explained to the resident or his or her representative in a form and manner that he or she understands, including in a language that he or she understands, and that the resident or his or her representative acknowledges that he or she understands the agreement.
  • The arbitration agreement must allow for the selection of a neutral arbitrator agreed upon by both parties and a venue that is convenient to both parties.
  • The arbitration agreement does not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including Federal or state surveyors, other federal or state health department employees, or representative of the Office of the State Long-Term Care Ombudsman.
  • LTC facilities must retain copies of the signed agreement for binding arbitration and the arbitrator’s final decision for 5 years after the resolution of any dispute resolved through arbitration with residents and make these documents available for inspection upon request by CMS or its designee.

According to CMS, the agency chose to not include the following proposed requirements in the final rule:

  • The use of plain language in the arbitration agreements. CMS deemed this requirement as unnecessary due to other requirements finalized in the rule.
  • Required posting of a notice regarding a facility’s use of binding arbitration. CMS deemed this requirement as unnecessary due to other requirements finalized in the rule.

Included with today’s StayAlert! Notice is an example policy addressing considerations for use of arbitration agreements. LTC organizations should consult with their legal counsel prior to implementing such agreements. Also included is an example policy addressing resident rights.

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