On September 28, 2016, the Centers for Medicare and Medicaid Services (“CMS”), an agency under the U.S. Department of Health and Human Services, issued a rule that barred long-term care facilities that receive federal funding from requiring that its residents resolve any dispute in arbitration, rather than in a court of law. Specifically, this rule required that long-term care facilities must not enter into an agreement for binding arbitration with a resident (or their representative) until after a dispute arises between the parties. Thus, the rule prohibits the use of pre-dispute binding arbitration agreements. However, on November 7, 2016, U.S. District Judge Michael Mills of the Northern District of Mississippi issued a preliminary injunction blocking enforcement of the CMS rule. The court did not definitively hold the rule unlawful, but found it likely enough that he will ultimately do so that the rule should be blocked pending final adjudication of the challenge to its legality.

This rule included the following changes to long-term care facilities: (i) that long-term care facility staff members are properly trained on caring for residents with dementia and in preventing elder abuse; (ii) that long-term care facilities take into consideration the health of residents when staffing a facility; (iii) that staff members have the right skill sets and competencies to provide person-centered care to residents; (iv) that care plans developed for residents take into consideration their goals of care and preferences; (v) improving care planning, including discharge planning for all residents; (vi) allowing dietitians and therapy providers the authority to write orders in their areas of expertise when a physician delegates the responsibility and state licensing laws allow; (vii) updating the long-term care facility’s infection prevention and control program.

Although this rule is not binding on long-term care facilities that do not receive federal funding, if it proceeds, this rule could dramatically change the relationship and disputes between facilities that receive federal funds and its residents. Most importantly, this rule could affect more than 15,000 long-term care facilities and about 1.5 million residents.