Client Alert: Ban lifted on nursing home arbitration agreements

By Greg Vanden-Eykel

The Centers for Medicare and Medicaid Services (CMS) recently announced a “final rule” that long term care facilities are permitted to use pre-dispute, binding arbitration agreements. Effective September 16, 2019, a facility may utilize arbitration agreements, but they are only enforceable with the following conditions:

  • A resident’s admission or care cannot not be dependent upon resident’s agreement to sign the arbitration agreement, and the right not to sign must be expressly communicated to the resident or their representative and included in the agreement itself.
  • An arbitration agreement’s terms must be explained in both form and language that is clear to a resident or their representative, and the resident or representative is required to acknowledge their understanding of the agreement.
  • Language discouraging a resident from communicating with federal, state and local officials is prohibited from an agreement.
  • An agreement is required to allow for the selection of a mutually agreed upon neutral arbitrator and a convenient arbitration venue to both parties.
  • If a resident has signed an arbitration agreement, he or she has the right to rescind the signed agreement with 30 calendar days of the initial signature.
  • Long term care facilities are required to retain copies of a signed arbitration agreement, as well as an arbitrator’s final decision for possible CMS review, for 5 years after dispute resolution.

CMS has indicated that failure to comply with the above requirements can result in sanctions and de-certification from the Medicare Program. Therefore, compliance is critical and may require long term care facilities to offer newly drafted arbitration agreements to residents who have signed prior agreements, as well as to residents signing agreements for the first time. For a more in-depth analysis of the impact of these changes and legal advice on compliance, please contact Greg Vanden-Eykel at gvandeneykel@bglaw.com or at 617-654-8200.

Barton Gilman has established a position of prominence in defending nursing homes and long-term facilities against claims of wrongful death, abuse, neglect, or mistreatment. Our attorneys are thoroughly versed on the complex web of state and federal rules, regulations and pending legislation that impact our clients in this highly regulated industry. For more information, please click here.