CMS considered prohibiting binding arbitration entirely, seeks comments

HHS Secretary Sylvia Burwell
HHS Secretary Sylvia Burwell

Facilities that present binding arbitration agreements to residents must ensure the residents fully understand the agreement, according to a proposed rule from the Centers for Medicare & Medicaid Services.

The rule, which was included in last week's proposed nursing home regulation overhaul, would require arbitration sessions to be conducted by a neutral arbitrator, and that residents fully understand the agreement and agree to it voluntarily. Admission to a nursing home or long-term care facility could not be contingent on the resident or their representatives signing an arbitration agreement, the proposal states.

CMS also clarifies in the proposal that an arbitration agreement could not “prohibit or discourage” the resident or their representatives from contacting federal, state or local healthcare officials, including the Office of the State Long-Term Care Ombudsman.

In the proposal CMS says it considered not addressing binding arbitration agreements, or outright prohibiting them, but chose to address the issue, as not doing so “would be more burdensome to the LTC facilities.”

“Arbitration can result in disputes being resolved faster and in a less burdensome manner for both parties,” CMS states in the proposal. “However, we are concerned that despite the protections we have proposed in this rule, some nursing home residents and potential residents may feel pressured to sign these agreements.”

As part of the 60-day comment period on the proposal, CMS is requesting comments from the public on whether arbitration should be prohibited in nursing homes.

Arbitration agreements have caused issues between long-term care facilities and residents' representatives. Most recently, the debate over whether survivors of a deceased nursing home resident can take claims against a facility to court despite the resident signing an arbitration agreement has taken the national state.