CMS SNF Arbitration Rules Revised

A couple of years ago, the Centers for Medicare and Medicaid Services (CMS), an agency under Health and Human Services (HHS), had essentially barred any skilled nursing facility (SNF) that receives federal funding from requiring that its residents resolve any disputes in arbitration, instead of in court. It was the most significant overhaul of the agency’s rules governing federal funding of long-term care facilities in decades. The nursing home industry maintains arbitration offers a less costly alternative to court. Allowing more lawsuits, the industry says, could drive up costs and force some homes to close. This was the case in the early 2000s, when many excess verdicts were recorded in Florida, forcing players out of the state or out of business altogether. Lawyers who work with the elderly say that people are being admitted to nursing homes at one of the most stressful moments of their lives. When CMS essentially barred any agreements requiring residents to resolve any disputes in arbitration, federal courts were quick to issue injunctions in industry suits. Now, CMS has issued proposed regulations with an effective date this week. The final rule (CMS 3342-F) will allow CMS to regulate SNF arbitration agreements, but this does not apply to agreements signed before September 16, 2019. If a dispute is settled through arbitration, a copy of a signed agreement and arbitration award must be kept for five years and available for inspection by CMS. Some providers went back to court to claim the amended arbitration rule is in violation of the Federal Arbitration Act (FAA) and that neither CMS nor HHS has the “statutory authority” under the Medicare and Medicaid acts to regulate alternative dispute resolution. I have conducted long-term care arbitrations, usually serving as the chair of a panel. These are difficult cases and are sometimes better suited to be resolved in private before knowledgeable and fair neutrals, rather than presented to juries. Arbitration of health care cases can be streamlined for counsel, saving the parties costs and often providing a quicker result than the courts. See more in trade publications here-- https://tinyurl.com/y4v5skyc and https://tinyurl.com/y4yaehk3