Health Law Daily HHS issues final rule on LTC facility arbitration agreements
Wednesday, July 17, 2019

HHS issues final rule on LTC facility arbitration agreements

By Nicole D. Prysby, J.D.

HHS revisits arbitration prohibition, allowing more flexibility for facilities by repealing the prohibition on LTC facilities entering into pre-dispute, binding arbitration agreements with their residents.

HHS has announced the release of a final rule amending the requirements long-term care (LTC) facilities must meet in order to participate in the Medicare and Medicaid programs. It repeals the prohibition on the use of pre-dispute, binding arbitration agreements, however, it does prohibit requiring residents to an agreement as a condition of admission to a facility, and contains provisions to ensure transparency in the arbitration process.

A 2016 HHS rule prohibited LTC facilities from entering into pre-dispute, binding arbitration agreements with any resident, or requiring that a resident sign an arbitration agreement as a condition of admission to the LTC facility. However, later that year, a federal district court preliminarily enjoined enforcement of that regulation. As a result of the district court decision, HHS re-evaluated the arbitration provisions. The agency published a proposed rule removing the arbitration prohibition in 2017 (see CMS proposes revised requirements for LTC facility arbitration agreements, June 7, 2017).

The majority of commenters for the proposed rule were opposed to the proposal to remove the prohibition on pre-dispute, binding arbitration agreements. In response, HHS made several modifications to the proposal, including a decision not to finalize the proposal to allow facilities to use pre-dispute, binding arbitration agreements as a condition of admission to the facility.

The final rule contains the following provisions:

  • An LTC facility may not require that a resident (or his representative) sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the facility.
  • An agreement must be explained to the resident (or his representative) in a form and manner that he understands, including in a language that he understands, and the resident or his representative must acknowledge understanding of the agreement.
  • An agreement must provide for the selection of a neutral arbitrator agreed upon by both parties and a venue that is convenient to both parties.
  • An agreement may not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials.
  • An LTC facility must retain copies of the signed agreement for binding arbitration and the arbitrator’s final decision for five years after the resolution of any dispute, and make these documents available for inspection upon request by CMS or its designee.

The final rule is scheduled for publication in the Federal Register on July 18, 2019.

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