CMS Reverses its Ban on Arbitration Agreements in Nursing Homes

CMS Reverses its Ban on Arbitration Agreements in Nursing Homes


The Centers for Medicare & Medicaid Services’ (CMS) completely reversed its Obama-era view of nursing home arbitration agreements. The reversal hardly came as a surprise, as the agency has been signaling a new approach in recent communications. More here.

But the agency’s official change in position began on June 2, 2017, when without any explanation, CMS abandoned its Fifth Circuit appeal of a decision that blocked the previous ban on mandatory arbitration agreements, detailed here. (Technically, the case is still pending, but dismissal appears imminent.)

Then, on June 5, 2017, CMS announced revisions to the long-term care requirements for Medicare and Medicaid participation. The CMS rule revisions now permit arbitration agreements in long-term care contracts, but only under certain conditions, such as:

The revised requirements have been published in the Federal Register here and comments are due by August 7, 2017. These changes will drastically impact contract formation and the litigation landscape in the nursing home setting. When finalized, nursing home facilities will need to make significant changes to contractual language and procedures to stay compliant with the changing regulations. 

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