The Federal Government has issued a final
rule that limits the use of pre-dispute arbitration agreements between nursing
facilities and their residents. The final rule was published on July 16, 2019 by
the Centers for Medicare and Medicaid Services (CMS) the government agency that
regulates Medicare and Medicaid program providers.
When someone is admitted to a long-term nursing facility
there is a lot of paperwork to be signed. Along with the admission contract and
various information forms and authorizations, most nursing facilities include
an agreement that requires the resident to arbitrate disputes that may arise in
the future.
Such pre-dispute binding arbitration agreements mean that disputes
will be resolved by persons appointed as arbitrators according to arbitration
rules. By signing the agreement, the
resident gives up his or her right to sue the facility in court in the event
that the resident is, for example, harmed due to the negligence of the facility
and its employees.
Lawyers for nursing home residents often feel that their
clients will get better results from a court-lawsuit than from arbitration. And
advocates point out that a better time to make an informed decision as to whether
or not to arbitrate a dispute is after the dispute has arisen.
There is often great stress involved at the time of a
nursing home admission and most people probably just sign all the forms they
are handed, including the pre-dispute arbitration agreement, without reading them
or understanding the implications. They may feel that they are required to sign
all of the forms to get a loved-one admitted to the facility. It is not a good
time to make a decision that will limit your future legal rights.
The CMS final rule allows long-term care facilities to
continue to request that residents and their representatives agree to pre-dispute
binding arbitration, but includes a few important safeguards that attempt to
provide some measure of protection of a resident’s rights to make informed
decisions.
The new rule requires that the facility explain the
arbitration agreement to residents and their representatives and advise them
that they are not required to sign it and that their admission to and stay in
the facility is not contingent on their signing it. I expect this requirement
to be a point of litigation in the future. Lawyers trying to void an
arbitration agreement that was signed by their injured client will seek to show
that the facility failed to adequately explain it to the resident.
The rule also specifies that the resident is given
30 calendar days to rescind the agreement.
In addition to advising their clients not to sign a
pre-dispute arbitration agreement, elder law attorneys may want to recommend
that clients meet with the lawyer within the first 30 calendar days after any
nursing home admission. If an arbitration agreement was signed, the lawyer can
help the client make certain that it is properly rescinded.
The new rule takes effect on September 16, 2019.
Here are the specific provisions of the new rule:
2.Section
483.70 is amended by revising paragraph (n) to read as follows:
Administration.
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(n) Binding arbitration agreements. If a
facility chooses to ask a resident or his or her representative to enter into
an agreement for binding arbitration, the facility must comply with all of the
requirements in this section.
(1) The facility must not require any resident or his or
her representative to sign an agreement for binding arbitration as a condition
of admission to, or as a requirement to continue to receive care at, the
facility and must explicitly inform the resident or his or her representative
of his or her right not to sign the agreement as a condition of admission to,
or as a requirement to continue to receive care at, the facility.
(2) The facility must ensure that:
(i) The agreement is explained to the resident and his or
her representative in a form and manner that he or she understands, including
in a language the resident and his or her representative understands;
(ii) The resident or his or her representative
acknowledges that he or she understands the agreement;
(iii) The agreement provides for the selection of a
neutral arbitrator agreed upon by both parties; and
(iv) The agreement provides for the selection of a venue
that is convenient to both parties.
(3) The agreement must explicitly grant the resident or
his or her representative the right to rescind the agreement within 30 calendar
days of signing it.
(4) The agreement must explicitly state that neither the
resident nor his or her representative is required to sign an agreement for
binding arbitration as a condition of admission to, or as a requirement to
continue to receive care at, the facility.
(5) The agreement may not contain any language that
prohibits or discourages the resident or anyone else from communicating with
federal, state, or local officials, including but not limited to, federal and
state surveyors, other federal or state health department employees, and
representatives of the Office of the State Long-Term Care Ombudsman, in
accordance with § 483.10(k).
(6) When the facility and a resident resolve a dispute
through arbitration, a copy of the signed agreement for binding arbitration and
the arbitrator's final decision must be retained by the facility for 5 years
after the resolution of that dispute on and be available for inspection upon
request by CMS or its designee.
Further Reading
Our
New Nursing Home Arbitration Mandate: Educate, Educate, Educate, Charlie
Sabatino,
American Bar Association, July 24, 2019
Be
Wary when Signing Nursing Home Admission Paperwork, Jeffrey Marshall,
Marshall, Parker and Weber, July 16, 2017
CMS
Regs on Pre-Dispute Arbitration Clauses in SNF Contracts, Rebecca C.
Morgan, Elder Law Prof Blog, July 29, 2019
