After litigation and multiple public comment periods, the new Centers for Medicare & Medicaid Services rule for arbitration agreements went into effect on Sept. 16, 2019. Long-term care providers should take note of key requirements to ensure that their arbitration agreements will be enforceable. If you have not used arbitration agreements previously, now is an opportune time to start.
Arbitration agreements help residents and their families.
There is always the risk in the litigation process that the resident and their family could receive no compensation. To avoid that, arbitrators work to efficiently resolve a claim and that is typically achieved through awarding some money. Another big advantage for families is that resolving a conflict through arbitration is faster than taking a lawsuit through trial. Litigating a case to resolution takes years. In comparison, arbitration resolves disputes on average within six (6) to twelve (12) months.
Lengthy legal battles can take their toll. Families and elderly residents want resolution not prolonged litigation because litigation can be stressful for everybody. On top of it all, on average, more money remains with the family in cases that go through arbitration.
Arbitration agreements help facilities.
You read about runaway verdicts and the best way to avoid them is to have signed, legal, enforceable arbitration agreements. Arbitration agreements substantially reduce the chance of a runaway jury awards over $1,000,000 and because of that, arbitration agreements make cases less attractive to high powered plaintiff firms.
Compliance with the new rule is the key to an enforceable arbitration agreement.
- The agreement must explicitly state that signing the agreement is not a condition of admission.
- A trained staff member must explain the arbitration agreement to the resident/personal representative and have the resident/personal representative acknowledge understanding.
- The language and form of the agreement must be in a manner that the resident/personal representative can understand. In layman’s terms, that means no legalese.
- Resident/personal representative should have the right to cancel or retract the agreement within thirty (30) days of signing.
- The agreement must provide for a neutral arbitrator and a neutral venue (e.g., a location convenient to both parties).
- Nothing in the agreement can prevent or discourage the resident/personal representative from communicating with any federal or local officials.
- If an arbitration occurs, the facility must retain a copy of the arbitration agreement and the arbitrator’s award for five (5) years.
Carefully review your agreements with your attorney to ensure compliance with the new requirements any applicable state laws and be sure to train your staff to ensure effective communication.
Here is information about the CMS regulation.
Here are 9 Tips for Drafting Arbitration Agreements for Senior Living Facilities.
Christina Nechiporchik is associate general counsel at HealthCap and ChelseaRhone. She has primary responsibility for file-level case management, including determining coverage and strategy for claim resolution. She also aids HealthCap agents and clients with navigating the claim process. In addition, Christina assists in enterprise risk management for HealthCap. To learn more about HealthCap, visit HealthCapUSA.com.
