In 2023, nursing homes have seen increased citations by surveyors for noncompliance tied to their pre-dispute, binding agreements for binding arbitration with their residents. When used appropriately, these agreements can streamline conflict resolution processes, but operators must tread carefully to ensure compliance with the regulations.
In 2019, the Centers for Medicare & Medicaid Services (“CMS”) published final regulations titled “Medicare and Medicaid Programs; Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements” (“Arbitration Regulations”) to 42 CFR Part 483, the Requirements for States and Long-Term Care Facilities. The Arbitration Regulations revised the requirements for arbitration agreements when they are used by nursing homes to resolve disputes with their residents.
Under the Arbitration Regulations, if a nursing home chooses to ask a resident or his or her representative to agree to binding arbitration, the nursing home must comply with the following requirements:
- A nursing home must not require any resident or his or her representative to sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the nursing home.
- A nursing home must explicitly inform the resident or his or her representative of his or her right not to sign the agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at, the nursing home.
- The nursing home must ensure that an agreement for binding arbitration is explained to the resident and his or her representative in a form and manner that he or she understands, including in a language the resident and his or her representative understand.
- The nursing home must ensure that the resident or his or her representative acknowledges that he or she understands the agreement for binding arbitration.
- The nursing home must ensure that the agreement for binding arbitration provides for the selection of a neutral arbitrator agreed upon by both parties and the selection of a venue that is convenient to both parties.
- The agreement for binding arbitration must explicitly grant the resident or his or her representative the right to rescind the agreement within 30 calendar days of signing it.
- The agreement for binding arbitration may not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state or local officials, including but not limited to federal and state surveyors, other federal or state health department employees and representatives of the Office of the State Long-Term Care Ombudsman.
- When the nursing home and a resident resolve a dispute through arbitration, a copy of the signed agreement for binding arbitration and the arbitrator’s final decision must be retained by the nursing home for five years after the resolution of that dispute and be available for inspection upon request by CMS.
CMS has two citation tags for violations of the Arbitration Regulations, F-847 and F-848. F-847 emphasizes the residents’ or their representatives’ right to make informed decisions and choices. The intent of F-878 is to make sure nursing homes provide a neutral and fair arbitration process by ensuring both the resident or his or her representative, and the nursing home agree on the selection of a neutral arbitrator and that the venue is convenient to both parties. So far in 2023, F-847 has been cited 73 times, and F-848 has been cited 27 times.
Appendix PP of the State Operations Manual and the supporting surveyor pathways call for surveyors to complete the review of the nursing home’s binding arbitration agreement, including a review of residents who have entered into a binding arbitration agreement and/or resolved a dispute. Upon entrance to begin a survey, surveyors are called to request:
- The nursing home’s binding arbitration agreement.
- A list of residents who are currently residing in the nursing home, that have entered into a binding arbitration agreement on or after September 16, 2019.
- A list of the residents who have resolved disputes through the arbitration process that occurred on or after September 16, 2019.
Appendix PP of the State Operations Manual also calls for surveyors to determine compliance with F-847 and F-848 through interviews of sampled residents, resident representatives, resident council/family council (if one exists), Long-Term Care Ombudsman, facility staff and record review, which includes reviewing the agreement and other relevant documentation.
Recently, nursing homes have been cited under F-847 and F-848 for:
- Failing to state that signing the arbitration agreement is not required as a condition of admission;
- Failing to state in the arbitration agreement that the agreement can be rescinded within 30 days of signing it; and
- Failing to ensure that the arbitration agreement included a provision for arbitration venue that was convenient to both parties.
- Nursing homes should review their entire admission packets to ensure compliance with the Arbitration Regulations and ensure admissions staff are aware of the details that must be provided to residents and their representatives if an arbitration agreement is utilized.
- Nursing homes that wish to use agreements for binding arbitration need to review and revise their agreements to ensure that they comply with the permissible provisions under the Arbitration Regulations.
- Nursing homes should review and revise their policies and procedures for staff to follow on agreements for binding arbitration.
- Nursing homes should review and revise their policies and procedures for retaining copies of the agreements for binding arbitration.