CMS Retracts Binding Arbitration Ban for Nursing Homes

Lauren Pollow and Stephen B. Hanse in Legal

On June 5, 2017, the Centers for Medicare & Medicaid (CMS) announced proposed revisions to the Long-Term Care Facilities Final Rule (“Final Rule”) with a focus on removing the prohibition on binding pre-dispute arbitration. The American Health Care Association (AHCA)/National Center for Assisted Living (NCAL) brought an injunction against federal officials after this provision was included in the Final Rule published on October 4, 2016. The provision within the Final Rule was placed on hold during litigation. The district court’s held that the pre-dispute arbitration prohibition within the 2016 Final Rule conflicted with the Federal Arbitration Agreement (FAA), and it is unlikely CMS could justify this rule. Comments from the AHCA can be viewed here.

The Final Rule served to overhaul provider requirements, the first extensive update since 1991. While there are proposed revisions to the binding pre-dispute arbitration requirements, the rule places an emphasis on transparency while seeking to eliminate unnecessary burden on nursing homes. While the ban will be prevented from going into effect, there will still be requirements in place to ensure transparency throughout the arbitration process including but not limited to the following:

  • Nursing homes are required to explain the contracts to residents/representatives.
  • All agreements must be in plain language.
  • The resident must acknowledge he/she understands the agreement.
  • Agreement cannot discourage or prohibit a resident from communicating with State or Federal officials (i.e. surveyors, health department employees, representatives of the State Ombudsman Program).
  • Should a facility resolve a dispute with a resident through arbitration, a copy of the signed agreement with the final decision must be maintained for inspection by CMS.
  • Facilities must post notices regarding use of binding arbitration.

The complete list of proposed changes can be viewed by visiting the Federal Register.  

NYSHFA/NYSCAL CONTACTS:

Lauren Pollow
Director, Government Affairs
518-462-4800 x25

Stephen B. Hanse, Esq.
President and CEO
518-462-4800 x11