Is Your Arbitration Agreement Compliant?

Andrea Haupt
|
September 20, 2019
Arbitration Agreement

After litigation and multiple comment periods from the public, the new CMS rule for arbitration agreements went into effect on September 16th. The rule only applies to arbitration agreements entered into on or after September 16th. Providers should take note of key requirements to ensure that their arbitration agreement will be enforceable.

The new CMS rule for arbitration agreements went into effect on September 16th Share on X

While it was a recommended best practice prior to the new rule, the Rule now requires that any arbitration agreement not be a condition of admission or a condition of receiving care. However, it is not just enough for the provider to verbally say or implement this in practice. The agreement must explicitly state that signing the agreement is not a condition of admission.

Other requirements include:

  • A staff member explaining the arbitration agreement to the Resident/Personal Representative and having the Resident/Personal Representative acknowledge understanding
  • The language and form of the agreement must be in a manner that the Resident/Personal Representative can understand (e.g., no legalese)
  • Resident/Personal Representative should have the right to cancel or retract the agreement within 30 days of signing
  • The agreement must provide for a neutral arbitrator and a neutral venue (e.g., a location convenient to both parties)
  • Nothing in the agreement can prevent or discourage the Resident/Personal Representative from communicating with any federal or local officials
  • If an arbitration occurs, the facility must retain a copy of the arbitration agreement and the arbitrator’s award for 5 years.

Providers should carefully review their agreements to ensure compliance with the new requirements. Staff should also be trained on the new requirements to reduce the potential for miscommunicating with a Resident/Personal Representative. Remember to consult with a local attorney to further ensure the arbitration agreement conforms with any applicable state laws.

The CMS regulation for Long-Term Care Facilities Arbitration Agreements (CMS-3342-F) can be found here


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