CMS Issues New Rules Prohibiting Arbitration Agreements

Esq. Stephen B. Hanse in Legal

Last week, the Federal Centers for Medicare and Medicaid Services (CMS) issued a new rule, to be effective November 27, 2016, prohibiting nursing homes from entering into pre-dispute arbitration agreements with their residents. This means that even agreements voluntarily entered into at the time of admission whereby residents and/or their legal representatives agree to resolve any future disputes with a nursing facility via arbitration rather than litigation will be unenforceable. While the American Health Care Association (AHCA) indicated that it will challenge the validity of the new regulation in court, until and unless AHCA is successful in getting an injunction to prevent the rules from going into effect, facilities could face harsh penalties if found to have violated the rule.

There is one exception, however. Agreements entered into on or before November 27, 2016 will be “grandfathered” and allowed to remain in full force and effect. If facilities are interested in entering into any such agreements with their existing clientele or new admittees on or before November 27, 2016, they are urged to contact Neil Murray at O’Connell and Aronowitz, (518) 462-5601, or their own counsel.


Stephen B. Hanse, Esq.
518-462-4800 x25