CMS Ruling: LTC Patients Not Required to Sign Binding Arbitration Agreements to Receive Care

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Previously on our blog, we discussed arbitration agreements in long-term care (LTC) and the ways in which patient advocate groups and the nursing home industry are at odds on their use. This week, the Centers for Medicare & Medicaid Services (CMS) announced a final rule on the matter: Medicare and Medicaid Programs; Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements (CMS-3342-F).

The final rule is published in its entirety in the Federal Register. The summary of the rule notes that CMS is specifically repealing the prohibition on the use of pre-dispute, binding arbitration agreements and is strengthening the transparency of arbitration agreements in LTC facilities. The summary concludes that this final rule supports residents’ rights to make informed choices about important aspects of their health care.

Final Rule Requirements

CMS considered more than 1,000 public comments from nursing home and beneficiary advocates on the proposed rule on arbitration agreements issued in June 2017. The final rule states LTC facilities must:

Not require that a resident or his or her representative sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care, at the facility. This must be explicitly stated in the agreement. This ensures that no resident will have to choose between obtaining the skilled nursing care he or she needs and signing an agreement for binding arbitration.

Ensure the agreement is explained to the resident or his or her representative in a form and manner he or she understands, including in a language that he or she understands, and that the resident or his or her representative acknowledges that he or she understands the agreement. These two requirements ensure that the arbitration agreement is transparent and clearly stated.

Ensure the agreement provides for the selection of a neutral arbitrator agreed upon by both parties and a venue that is convenient to both parties. These requirements help to ensure that the arbitration process is fair to both parties, especially the residents.

Ensure that the agreement does not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state, or local officials, including Federal or state surveyors, other federal or state health department employees, or representative of the Office of the State Long-Term Care Ombudsman. This protects the resident from any undue influence by the LTC facility to not discuss the circumstances surrounding a concern, complaint, or grievance.

Retain copies of the signed agreement for binding arbitration and the arbitrator’s final decision for 5 years after the resolution of any dispute resolved through arbitration with residents. Make these documents available for inspection upon request by CMS or its designee. This will ensure that CMS will be able to obtain information on how the arbitration process is being used by LTC facilities and on the outcomes of the arbitrations for residents.


CMS indicates that this final rule on arbitration agreements is part of many steps it is taking to focus on patients, increase efficiencies and transparency, and strengthen the safety and quality of care beneficiaries receive. It is estimated that this rule, along with other CMS initiatives, will allow nursing homes to focus resources on their residents by saving them millions in annual administrative costs.

Arbitration Agreements/Admission Documents in the Medical Record

A critical component of Excelas’ medical record organization and analysis services, is identifying and highlighting admission documentation and all arbitration agreements. These forms are reviewed to determine if the above guidelines are followed and compliance with the process is clearly documented in the resident record.

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