Last year, the Centers for Medicare & Medicaid Services (CMS) issued new regulations that would have effectively limited the ability of long-term care facilities to put binding arbitration agreements into resident admission contracts. A number of nursing homes and a trade association representing long-term care facilities sued to prevent the new regulations from being put in place. Late last year, a court issued a preliminary injunction that ruled against the new regulations. The grant of the preliminary injunction implied that CMS did not have the authority to ban arbitration agreements by long-term care facilities. Instead of further litigating the matter, CMS has instead chosen to significantly revise the proposed regulations.
An arbitration agreement effectively says that any dispute between the parties to the agreement has to go to arbitration instead of a court of law. Arbitration cases are typically argued before one or more arbitrators whose decisions are binding on the parties. Arbitration decisions are generally binding to the point where neither party can appeal the decision. From a potential plaintiff’s perspective, arbitration can be problematic because arbitration cases typically have fewer procedural safeguards to ensure a fair hearing, arbitrators can be effectively chosen by the party who wrote the initial arbitration agreement, and monetary compensation awards tend to be lower in arbitration decisions.
The new proposed regulations require care facilities that use binding arbitration agreements to make certain disclosures to potential residents. Facilities that use binding arbitration must display a notice indicating the use of arbitration agreements in a way that is visible to both visitors and residents. The regulations require that any and all arbitration agreements be written in plain language and explained to residents and their representatives in a language that they understand. If a facility requires signing an arbitration agreement before admission, the full, plain language arbitration agreement must be in the admission contract itself. Before the arbitration agreement becomes effective, the resident must indicate understanding of the arbitration agreement. The arbitration agreement also must not prevent residents from communicating with federal, state, and local officials, representatives, and agencies.
Before final regulations are issued, the proposed regulations will go through a comment period where the general public and interested parties can give feedback. The comment period will be open from June 8th through August 7th, 2017.
For consultation on selecting a care facility for you and/or your family members please call Martha C. Brown & Associates at (314) 962-0186.