CMS Issues Final Rule Easing Restrictions On Arbitration Agreements In Long Term Care Setting

CMS recently published a Final Rule that repealed a prior rule prohibiting Long-Term Care (LTC) facilities from using pre-dispute, binding arbitration agreements. LTC facilities that choose to utilize arbitration agreements with residents or their representatives must adhere to certain requirements, including:

• The facility must not require any resident to sign an agreement for binding arbitration as a condition of admission to a facility or as a requirement to continue to receive care at a facility;
• The facility must inform any resident of the right to not sign a binding arbitration agreement.
• The facility must explain the agreement in a manner that the resident will understand;
• The agreement must provide for a venue convenient to both parties and for a neutral arbitrator agreed upon by both parties;
• The agreement must include the right for a resident to rescind the agreement within 30 calendar days of signing it; and
• The agreement must not prohibit or discourage the resident from communicating with federal, state, or local officials.

In publishing the Final Rule, CMS expressed its objective of strengthening the transparency of the arbitration process between LTC facilities and residents. Further, CMS has sought to better inform residents about their legal rights within LTC facilities, while addressing the need for LTC facilities to be efficient and cost-effective. The regulations that promulgate the Final Rule will be effective September 16, 2019.