CMS drops appeal in arbitration lawsuit, proposes revisions to agreement requirements

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CMS proposed several revisions to how long-term care providers conduct binding arbitration agreements.
CMS proposed several revisions to how long-term care providers conduct binding arbitration agreements.

In what is being seen as a victory for long-term care providers, the Centers for Medicare & Medicaid Services has abandoned its appeal of a court ruling blocking its prohibition of pre-dispute nursing home arbitration agreements and proposed removing the ban.

The lawsuit against CMS over the ban was filed by the American Health Care Association in October, after the Obama-era final rule effectively banned the use of pre-dispute arbitration. CMS dropped its appeal against the lawsuit Friday.

On Monday the agency issued proposed revisions to long-term care providers' requirements of participation. While allowing pre-dispute binding arbitration agreements, the rule does set standards for what should be included.

That includes that arbitration agreements must written in plain language; must be explained to residents and their representatives in a form, manner and language that they understand; and the resident must acknowledge that they understand the agreement.

If the agreement is a condition of admission the language must be in plain writing and included in the admissions contract, the rule states. Under the proposal, agreements would also be barred from containing language that prohibits or discourages residents and their representatives from communicating with government officials, surveyors, or ombudsman.

Long-term care facilities would be required to retain a copy of the signed binding arbitration agreement and the arbitrator's final decision so it can be inspected by CMS. Providers would also have to post a notice on their facility's use of binding arbitration in an area where it's visible to both residents and visitors.  

A notice that the revised rule was pending first appeared online in late April. The proposed rule is slated for publication in the Federal Register on June 8; comments are due by August 7.