Nursing Homes Can Continue to Require Residents To Agree To Binding Arbitration

It looks like nursing homes will continue to be able to require residents and their families to agree in advance to arbitrate disputes with the facilities, despite an attempt by federal regulators to curb the practice.

Late last year, the Centers for Medicare and Medicaid Services (CMS) issued a major rewrite of its nursing home regulations. Most of those rules were backed by both the industry and consumer groups but one became a flashpoint. It barred nursing homes from requiring patients to agree to binding arbitration at admission, though facilities and residents could still agree to use the process after a dispute arises.

Nursing home operators say arbitration is a faster and less costly way for consumers to resolve disputes, since it is an alternative to expensive and drawn-out litigation. But consumer advocates claim industry arbitrators are biased and say the process is a way for facilities to keep major violations of health and safety rules private, since arbitration is confidential while litigation often is public. They say it is not fair to require families to agree to the process at admission–even before disputes arise and at a time when they are under great stress.

As soon as the rules were finalized, The American Health Care Association, the major nursing home trade association, sued to reverse the arbitration curbs. A district court judge in Mississippi blocked the ban while the dispute is being litigated. He agreed with AHCA that CMS exceeded its legal authority by halting the practice, a decision that he said should be left to Congress.  Now, the newsletter Modern Healthcare reports that CMS has quietly informed states in December that it will not attempt to enforce the ban until the injunction is lifted.

But with the election of Donald Trump, it appears increasingly likely that the new rule will die. Congressional Republicans have said they intend to roll back many regulations approved in the final months of the Obama Administration, and this one is likely to be included on that hit list.

But that may not even be necessary. The Trump Administration could simply decline to fight the industry lawsuit, effectively killing the ban. Either way, it looks like nursing homes will be allowed to continue to require patients, residents, and their families to accept advance arbitration agreements.

 

 

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