Eight months after publishing a final rule on the Revised Requirements of Participation for Nursing Facilities banning pre-dispute arbitration agreements for nursing home residents and family members, CMS is issuing new proposed regulations that rescind resident protections against these arguably unfair provisions.

According to CMS, it “now believe[s] that an outright ban on pre-dispute arbitration agreements and the further restrictions on post-dispute arbitration agreements do not strike the best policy balance,” and also that “a ban on pre-dispute arbitration agreements would likely impose unnecessary or excessive costs on providers.”  In the proposed rule, CMS removes the requirement preventing facilities from entering into pre-dispute arbitration agreements, and also removes the provision banning facilities from requiring these agreements as a condition of admission. Instead, CMS requires that an agreement for binding arbitration be explained to the resident and his/her representative in a manner that s/he understands, and that the resident acknowledges that s/he understands the agreement.   The agreement may not prohibit or discourage the resident or anyone else from communicating with federal, state, or local officials, including the survey agency and the long-term care ombudsman program.

CMS kept the provision that when a dispute is settled through arbitration, a copy of the signed agreement for binding arbitration, as well as the arbitrator’s final decision must be kept by the facility for 5 years and be available for inspection upon request by CMS or its designee. Additionally, CMS requires that the arbitration agreement be in plain language; and if it is a condition of admission, that it be in plain writing in the admission contract.  Lastly, CMS is proposing that facilities be required to post a notice describing its policy on the use of agreements for binding arbitration in an area that is visible to residents and visitors.

Gone from the rule is not only language banning pre-dispute arbitration as a condition of admission, but also requirements from the 2016 final rule for post-dispute binding arbitration that the agreement be entered into voluntarily by the resident, that a neutral arbitrator be mutually agreed upon, and that the venue for arbitration be convenient to both parties.

Shortly after publication of the final rule in October 2016, the American Health Care Association and affiliated nursing homes filed a lawsuit against CMS seeking an order stopping enforcement of the provision.  The district court concluded that the rule was likely in conflict with the Federal Arbitration Act and ordered the preliminary injunction.  On June 5, 2017, the government filed a notice with the court that they will seek a stay of the injunction, pending the completion of the rule making process. Comments on this forthcoming proposed rule will be due 60 days from the date of publication in the federal register, or on or about August 7, 2017.

You can read more about the revised nursing home arbitration regulations at the below links.

CMS Proposed Regulation

Nursing Home Arbitration Agreements

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About Jerry

Jerold E. Rothkoff, a practicing New Jersey and Pennsylvania attorney, is the Principal of the Rothkoff Law Group, an elder care law firm. Jerry dedicates his practice to serving clients in the areas of life care planning, long-term care planning, Medicaid & VA benefits, and advocacy for the elderly and disabled. He is past President of the NJ Chapter of the National Academy of Elder Law Attorneys, former chair of the elder law section of the NJ State Bar Association, and past President of the Life Care Planning Law Firm Association. Jerry continues to be an outspoken advocate for the rights of the elderly and disabled. He writes for and gives presentations regularly to attorneys and other professionals about legal issues related to seniors and those with disabilities.

Jerry’s community activities include the Twilight Wish Foundation, the Delaware Valley Stroke Council, the Alzheimer’s Association, as well as numerous other advocacy groups.

When not in the office, Jerry spends time with his wife, Erica, and their five children, eighteen-year old identical twin girls, Liza and Julia, fifteen-year old fraternal twin boys, Evan and Gregory, and six-year old Aitan.

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