Significant Regulations Added Regarding Arbitration Agreements in Long-Term Care Facilities that Accept Medicare and Medicaid Patients

Long-term care facilities, i.e., nursing homes, that accept Medicare and Medicaid patients will be subject to some significant changes in regulations on their ability to enter into arbitration agreements with patients.

New Rules and Requirements:

The changes are as follows:

  1. Pre-dispute binding arbitration agreements are prohibited;
  2. The facility cannot require the resident to sign a post-dispute arbitration agreement as a condition of the resident’s continuing to stay at the facility;
  3. The ability to enter into post-dispute arbitration agreements with patients are subject to the following regulations:
    1. The facility must explain the agreement to the resident in a form, manner, and language that the resident understands and have the resident acknowledge that he or she understands the agreement;
    2. Guardians or representatives of the resident cannot consent to an agreement for binding arbitration on the resident’s behalf unless that person was allowed to do so under state law and has no financial interest in the facility;
    3.  The agreement cannot contain any language prohibiting or discouraging the resident or any other person from communicating with federal, state, or local officials regarding any matter;
    4.  The facility must inform the resident that he or she is waiving his or her right to a jury trial;
    5.  The facility must provide for the selection of a neutral arbitrator and a venue convenient to both parties; and
    6.  Any agreement for binding arbitration must be separate and distinct from any other agreement or paperwork addressing any other issues.

The new rules, when first proposed by the Department of Health and Human Services, met with a myriad of comments from the public – legal officials, medical care providers, and politicians.  The Department stood firm in its proposal, and the new regulations will take effect on November 28, 2016.

Looking Ahead:

The Department addressed one comment in a manner that leads us to believe that we should be on the lookout for similar changes in the next few years.  The commenter pointed out that other Medicare and Medicaid healthcare providers utilize arbitration agreements regularly.  Therefore, the commenter asked, why were other providers not subject to the same requirements as long-term care facilities?  In response, the Department stated that regulations on the use of arbitration agreements by other providers are “beyond the scope of this rule.”  However, it continued, “we will retain this comment for review in case there is future rulemaking in this area.”

As always, medical professionals and facilities providing care to Medicare and Medicaid patients need to be vigilant about new and/or changing regulations affecting their practice.