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CMS Finalizes Rule Allowing Nursing Home Arbitration Provisions

The Centers for Medicare and Medicaid Services (CMS) published a final rule on July 18, 2019 concerning the use of arbitration agreements in nursing homes. The final rule repeals the prohibition against pre-dispute, binding arbitration agreements while seeking to ensure the transparency of arbitration agreements. LeadingAge NY’s general counsel, Hinman Straub, has prepared an analysis of the final rule for member nursing homes which includes commentary on the use of such agreements in New York State.

Before October 2016, the federal requirements of participation for nursing homes did not address the use of arbitration agreements. An October 2016 final rule prohibiting pre-dispute arbitration agreements in nursing homes was quickly challenged, and a federal district court issued an injunction halting the enforcement of the rule pending further proceedings. In June 2017, CMS issued a proposed rule removing the prohibition on arbitration agreements and adding requirements aimed at ensuring that consumers are well-informed on the use of such agreements.

The final rule, which was just adopted and goes into effect Sept. 16, 2019, makes various changes to the June 2017 proposed rule. Most notably, the facility must not require any resident or his/her representative to sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the facility and must explicitly inform the resident or his/her representative of his/her right not to sign the agreement as a condition of admission to, or as a requirement to continue to receive care at, the facility.

The Hinman Straub memo provides further background, summarizes the final rule, and discusses its impact in New York State.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866