Type: Law Bulletins
Date: 07/23/2019

CMS Issues Final Rule on Pre-Dispute Arbitration Agreements

On July 18, 2019, the U.S. Department of Health and Human Services Centers for Medicare & Medicaid Services (CMS) published a final rule (42 C.F.R. § 483 (2019)) that repeals the prohibition of long-term care facilities’ use of pre-dispute arbitration agreements. The final rule was unveiled as part of CMS’ five-part plan, which is an approach focused on strengthening oversight, enhancing enforcement, increasing transparency, improving quality and putting patients over paperwork. The final rule was created to ensure residents have access to arbitration, a method that often costs residents far less than litigation. While still permitting pre-dispute arbitration agreements, the final rule prohibits facilities from:

  • requiring residents to sign binding arbitration agreements as a condition to receiving care; and 
  • including language in arbitration agreements that bars residents or their families from contacting federal, state and local authorities.

The final rule requires facilities to:

  • ensure all binding arbitration agreements are in plain language;
  • inform residents and their representatives that they do not have to sign the binding arbitration agreement;
  • explain the arbitration agreement to residents and their representatives in a form and manner they understand;
  • receive an acknowledgment from the resident and their representatives that they understand the agreement;
  • post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors; and
  • retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision if a facility resolves a dispute with a resident through arbitration.

The final rule becomes effective on Sept. 16, 2019, but it does not alter the validity of agreements executed before that date. Taft’s Health and Life Sciences attorneys are available to help you comply with the final rule and other federal and state regulations governing nursing homes and other long-term care facilities.

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