Comment Period Closes on the CMS Proposed Rule on Arbitration Agreements in Long Term Care Facilities

On October 14, 2015, the public comment period closed on the “Reform of Requirements for Long Term Care Facilities” rule proposed by the Centers for Medicare & Medicaid Services.

The rule, proposed on July 16, 2015, emerges from CMS’s effort to evaluate its regulations for long term care facilities (42 CFR Part 483, Subpart B) on a comprehensive basis, considering innovations in resident care and quality assessment practices since they were initially published in 1989. In the context of litigation, the CMS regulations are important to the extent they bear on the alleged standard of care applicable to nursing home care providers.

The proposed changes pertaining to binding arbitration agreements have received public attention. The proposed rule requires, among other things, that the facility explain the proposed binding arbitration agreement and ensure resident acknowledgement of understanding; and the agreement itself must be entered into voluntarily, with admission to the facility not contingent on the resident or his or her representative signing a binding arbitration agreement.

During the 90-day public comment period, CMS received nearly 9,000 comments, including hundreds of comments on the proposed rule’s restriction on the use of pre-dispute binding arbitration agreements. Some comments criticized the proposed mandatory arbitration agreement restrictions as overreaching and unnecessary; some (including comments from a group of 34 U.S. senators led by Minnesota Senator Al Franken) urged CMS to ban pre-dispute arbitration agreements altogether.

Now that the comment period has closed, CMS will be reviewing the comments and responding to them in the form of a final rule. CMS has three years from the publication of a proposed rule to publish the final rule.

If you have any questions feel free to contact Anne Nelson at 312-673-7810 or anne.nelson@arandpartners.com.