New Medicare Regulation Bans Nursing Home Arbitration Agreements

Effective November 28, 2016, the Centers for Medicare & Medicaid Services (CMS) has issued a regulation prohibiting nursing homes from using pre-dispute binding arbitration agreements. The Regulation also prohibit nursing homes from entering into an agreement for binding arbitration with a resident or the resident’s representative until a dispute arises between the parties.

Under the provision, a facility may not require a resident or a resident’s representative to sign an arbitration agreement as a condition of admission to the facility. If, after a dispute arises, a facility chooses to ask a resident or his or her representative to enter into a binding arbitration agreement, the facility must comply with all of the requirements in the regulations. These requirements include, inter alia, that:

• the agreement must be explained to the resident,
• the agreement must be entered into voluntarily, and
• the agreement must provide for the selection of a neutral arbitrator agreed upon by both parties.
• the resident’s continuing right to remain in the facility must not be contingent upon the resident or the resident’s representative signing the binding arbitration agreement.

CMS, an agency of the Department of Health and Human Services, issued the regulation on October 4, 2016. Click here to read the entire regulation.