Two years after surveyors began enforcing new arbitration rules, they have not pursued skilled nursing operators with the vigor some expected.
The number of citations for F-847 and F-848 stayed just under 200 last year, the first full year in which two new F-tags related to such agreements were meted out.
But in an environment in which courts have increasingly tried to narrow when arbitration can be used, compliance and legal experts warn that strict adherence to — and continued evaluation of — in-house policies remains critical.
The tags are related to new requirements of participation that forbid nursing homes from using arbitration as a condition of admission and instituted other changes to protect residents rights and ensure they understood any agreement they signed. Those technically went into effect in 2019, but surveyors did not begin citing them until after Oct. 24, 2022, because of a delay in guidance from the Centers for Medicare & Medicaid Services.
Once published, that guidance had left some skilled nursing providers and healthcare attorneys with a “sky-is-falling” feeling, said Craig Conley, a healthcare attorney and shareholder with Baker Donelson’s Memphis office. He said most expected to get “hammered” starting last year.
“When the new F-tags came out, myself and my clients were frightened by them, especially by the sample interview questions that [surveyors] would be asking the residents, the facility staff, the ombudsman and other folks,” Conley told McKnight’s Long-Term Care News this week. “Asking a resident or a resident’s representative about their understanding of the arbitration process, giving up their right to litigation and court proceedings — especially if they had signed this agreement years before — it just set the facilities up for failure.”
Confusion leads to citations
It’s that series of questions regarding understanding of agreements that appear to be leading to citations most often, according to a nationwide review of the new arbitration tags conducted by Formation Healthcare for McKnight’s.
A total of 30 citations were issued across both tags in November and December of 2022, which jumped to 199 citations across both tags for all of 2023. F-847, which requires presenting an arbitration agreement in a way that can be understood (and later explained) by residents, drew 146 citations.
Just over a quarter of all the 2023 tags (53) related to failure to comply with F-848, which governs language about selecting an arbitration venue and a requirement that facilities retain executed agreements for five years.
Reviewing deficiency statements in Formation’s internal survey data system, Senior Consultant Kimberly Cox, RN, noted that interview residents often stated they could not remember what they signed “due to the significant amount of paperwork,” that someone did not explain what they were signing or do it in a manner they understood, or that they did not remember they could revoke the arbitration agreement within 30 days.
Additionally, residents with cognitive impairment did not understand what an arbitration agreement was, Cox told McKnight’s.
That’s a major area of concern for providers moving forward, Conley added. His firm has developed a checklist that guides nursing home staff through the key compliance issues and provides cues on how to explain arbitration in simple terms — and to parties who night represent a patient who cannot represent themselves.
Any lapse in following new arbitration rules could be “low-hanging fruit” on a given survey, Conley said.
“Fortunately, the numbers so far are minute,” Conley said. “But if a survey team really wants to go in and really scrutinize a facility, they will start focusing on these two F-tags and citing facilities.”
Still, he doesn’t foresee any surge in survey activity around the arbitration requirements. For one, most providers have worked with attorneys to update their policies and forms to comply with the new regulations. But the penalties related to the new tags would rarely rise to Immediate Jeopardy and don’t involve abuse, and so facilities might continue to see less focus on them, Conley predicted.
“The surveyors see them [the agreements], say ‘Oh, check the box. They’re in compliance. Let’s move on to something more dicey,’” Conley said. “Most survey teams in most states that I’m aware of, they’re understaffed, they’re overworked and they’ve got a lot on their plate when they’re going into a facility. … I think this just falls to the bottom of their list.”
Court concerns
Still, failure to be cited doesn’t mean providers are in the clear. Courts have been increasingly reluctant to enforce arbitration agreements, and any discrepancies that don’t get cited but still raise questions about procedures or perceived fairness could land lawsuits back in front of a judge.
In addition to working with counsel to keep agreements up-to-date per any state court action or laws, Conley also advises long-term care providers to present every arbitration agreement separately, outside the admission packet, to help address accusations of trickery.
“Even though you’ve got case law that says arbitration agreements are to be treated just like any other contract, they are scrutinized way more than other contracts,” he said. “A lot of judges fear that a facility, primarily because the resident population are elderly and may have some diminished capacity or competency issues and not really understand what they’re signing, a lot of judges lean more toward not compelling arbitration.”
He recommends admissions staff get the document signed by the resident and key related parties, such as a power of attorney, to ensure the agreement can withstand challenges regarding authorized signers.
Cox, meanwhile, recommends admission staff get onboarding and annual training on the regulations, and ensure they can explain forms in plain language. That could involve a script to use, and compliance can be evaluated through internal quality improvement programs, she added.
