CMS’ New Proposed Rule Repeals Ban on Nursing Home Arbitration Agreements

June 6, 2017

The Centers for Medicare & Medicaid Services (CMS) has taken two significant steps away from its prior proposed ban on mandatory arbitration agreements in the long term care setting, abandoning its appeal of a decision blocking implementation of a prior rule banning mandatory arbitration agreements, and issuing a new proposed rule rescinding its prior ban on mandatory arbitration agreements.

On September 28, 2016, CMS issued a rule barring any long term care facility that receives federal funding from requiring its residents to resolve disputes via arbitration instead of in court, which was scheduled to become effective on November 28, 2016. The arbitration ban never went into effect because Judge Michael P. Mills, for the Northern District of Mississippi, granted a preliminary injunction sought by the American Health Care Association preventing the ban from being implemented. CMS appealed the grant of the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit, but dropped the appeal on June 2.

Then on June 5, CMS issued a new proposed rule with regard to binding arbitration agreements. While the new proposed rule does not outright prohibit binding arbitration agreements in the long term care setting, it does propose retaining certain requirements for these agreements and adding some new requirements, including:

  • Long term care facilities must explain the agreement to the resident and his or her representative in a form and manner that he or she understands (including a language that the resident understands)
  • The agreement cannot contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state or local officials
  • In order to be a condition for admission, the agreement must consist of plain language in the admission contract
  • Facilities must post a notice describing their arbitration policies which is visible to residents and visitors

Before implementation of the new proposed rule, pursuant to federal regulations, CMS will provide a 60-day notice in the Federal Register, solicit public comment, and submit it to the Office of Management and Budget for review and approval. You may submit electronic comments on the new proposed regulation to (follow the “submit a comment” instructions), or by regular mail to CMS, Department of Health and Human Services, Attention CMS-3342-P, PO Box 8010, Baltimore, MD 21244-1850. A PDF copy of CMS’ proposed rule can be found via the link below. For more information, you may contact Rabiya Bilfaqi at or at 312-673-7818.

CMS Proposed Rule PDF

Posted in Legal Updates