Centers of Medicare and Medicaid (CMS) is getting ready to issue their final rule to repeal the previous administration’s rule banning arbitration between nursing homes and their residents or families. The new rule will allow facilities to require residents or their families to sign agreements prior to disputes. Facilities will be able to settle complaints through arbitration rather than litigation and ultimately reduce lengthy legal battles and put the focus on the quality of care instead of legal costs.
The Obama administration, through CMS in late 2016, attempted to ban arbitration by issuing a rule which banned the arbitration agreements practice in nursing homes facilities which care for Medicare and Medicaid patients. The agency cited, “significant evidence the arbitration agreements have a deleterious impact on the quality of care.” The American Health Care Association sued the administration in November 2016 requesting a preliminary injunction blocking the rule.
It is important to note, the court never issued an opinion on this court case; the Trump administration requested a stay in the legal action after CMS issued a new proposal in June 2017 to begin the process of reversing the planned ban on arbitration agreements. In June 2017, CMS stated, “an outright prohibition of arbitration agreements would significantly increase the cost of care, and would require facilities to divert scarce resources from the care of their residents to the defense of expensive litigation.”