CMS Backtracks on Arbitration Ban in Long-Term Care

Months after trying unsuccessfully to ban the pre-dispute arbitration agreements in long-term care, the Centers for Medicare & Medicaid Services (CMS) is now proposing that the controversial practice be allowed after all.

CMS’ new proposed rule was published in a Federal Register document on Monday afternoon. It comes after skilled nursing providers pushed back against the agency’s proposed ban, including through a lawsuit filed by the largest industry trade group, the American Health Care Association (AHCA).

AHCA applauded the proposed rule floated Monday.


“Arbitration produces swifter resolution to disputes, compensates residents without undue litigation expense for either party, and reduces the funding burden on the Medicare and Medicaid programs,” AHCA President and CEO Mark Parkinson said in a press release. “We greatly appreciate CMS and the Trump Administration making the determination that this ban is not in the best interest of our nation’s millions of patients, residents and families, and the providers who care for them.”

In addition to reversing the ban on pre-dispute binding arbitration agreements, the proposed changes would “help strengthen transparency in the arbitration process, reduce unnecessary provider burden and support residents’ rights to make informed decisions about important aspects of their health care,” according to CMS.

Under the proposed rule, pre-dispute arbitration agreements must be present in the admissions contract — and in plain writing — if signing an agreement for binding arbitration is a requirement of admission into a long-term care facility.


Additionally, the arbitration agreement must be explained to the resident and his or her representative in a manner, form and language that they all understand. To guarantee that this occurs, the resident must certify that he or she understands the agreement.

Also, under CMS’ proposed rule, all long-term care facilities that have pre-dispute arbitration agreements will be required to post a notice regarding their use of binding arbitration in an area that is visible to both visitors and residents.

If a long-term care facility, meanwhile, actually resolves a conflict with a resident through arbitration, it must keep a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so that it can be inspected by CMS or its designee.

The pre-dispute arbitration agreement, additionally, must not contain any language that discourages or prohibits the resident or anyone else from communicating with state, federal, or local officials, including state and federal surveyors, other state or federal health department employees, or representatives of the State Long-Term Care Ombudsman, CMS adds.

Comments on the proposed rule are due by August 7.

Written by Mary Kate Nelson

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