Will Final Medicare Rule Allow Nursing Homes to Force Arbitration?


Contentious updates to a Medicare nursing home final rule involving arbitration clauses are under review by the White House.

Under the proposed version of the rule, if a nursing home includes binding, or pre-dispute, arbitration agreements in their admission contracts, the facility must explain the agreements and the patients must acknowledge they understand them. Elected Democratic officials, litigators and some consumer advocacy groups have argued that pre-dispute arbitration is unfair to patients and their families and is more likely to benefit nursing home owners.

The Office of Management and Budget Aug. 16 started reviewing the final rule, which governs conditions of participation that more than 15,000 long-term care facilities must implement to qualify for the Medicare program, according to the OMB reginfo.gov website. The Centers for Medicare & Medicaid Services released the proposed rule with the arbitration proposal in July 2015.

The CMS “was right to recognize how problematic forced arbitration is” in the proposed rule, Sarah Rooney, director of regulatory affairs at the American Association for Justice, an industry group for litigators, told me Aug. 17. However, the proposal “would simply green-light the nursing home industry to continue using forced arbitration as long as certain disclosures are made,” she told me.

An industry group for the nursing home industry, the American Health Care Association (AHCA) countered that the CMS doesn’t have the authority to regulate the use of arbitration agreements by nursing home operators.

Furthermore, the AHCA “doesn’t believe further agency directive” on pre-dispute arbitration “is necessary or possible,” the group's president and chief executive officer, Mark Parkinson, told me in an Aug. 17 statement.

Read my full story to learn more about what to look for in the final rule.

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