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CMS Repeals Prohibition on Pre-Binding Arbitration for Long-Term Care Providers

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CMS Repeals Prohibition on Pre-Binding Arbitration for Long-Term Care Providers

On July 16, 2019, the Centers for Medicare & Medicaid Services (CMS) announced its final rule updating regulations pertaining to the use of arbitration agreements by long-term care facilities. Significantly, the final rule reversed CMS’s prior ban on pre-dispute arbitration agreements, imposed in CMS’s October, 2016 “Reforms of Requirements for Long-Term Care Facilities” final rule. Despite the repeal of the ban, the final rule continues to prohibit long-term care facilities from requiring a resident to sign an arbitration agreement as a condition of admission to, or receipt of care at, the facility. 

The final rule includes a number of requirements that a facility contemplating use of an arbitration agreement must follow, including that: 

  • The facility must explain the agreement to the resident and his or her representative in a form and manner they understand, including in a language they understand.
  • The resident must acknowledge that he or she understands the agreement.
  • The agreement must provide for the selection of a mutually acceptable neutral arbitrator and a venue that is convenient to both parties.
  • The arbitration agreement may not include language that prohibits or discourages the resident or anyone else from communicating with any federal, state, or local officials, including surveyors, other federal or state health department employees, or representatives of the State Long-Term Care Ombudsman.
  • A facility that resolves a dispute with a resident through arbitration must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.

The final rule did not, however, retain other requirements found in CMS’s proposed rule, published in June, 2017, including the requirements that a facility use plain language in its arbitration agreement and post a notice in a public area about the facility’s use of arbitration agreements. 

For more information on this topic contact Jerry Aben at 734.214.7648 or at gaben@dykema.com.

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