Nursing Homes May Be Banned From Using Pre-Dispute Binding Arbitration Agreements

Nursing Homes May Be Banned From Using Pre-Dispute Binding Arbitration Agreements Image

The Centers for Medicare & Medicaid Services (CMS) has issued proposed final rules which prohibit long-term care facilities (nursing homes) from using pre-dispute, binding arbitration agreements. That is, nursing homes cannot force new residents to agree to binding arbitration rather than going to court over a future dispute.


These new rules have been in debate since 2016, but some believe the end is in sight.

The proposed final rule includes:

  • A nursing home may not, as a condition of admission to the nursing home (or as a condition to continued care), require a resident to sign a binding arbitration agreement.
  • A nursing home must explicitly notify the resident of their right not to sign the agreement and the agreement must explicitly state that the resident is not required to sign it.
  • The agreement must explicitly provide that the resident has the right to rescind the agreement within 30 calendar days of execution of the agreement.
  • The arbitration agreement must be explained to the resident in a language in which they understand.
  • If a resident chooses to sign the pre-dispute, binding arbitration agreement, the nursing home must ensure that the resident acknowledged that he or she understands the agreement.
  • The agreement cannot contain any language that dissuades the resident from communicating with state or federal officials regarding any matter.
  • The arbitration agreement must specify that if arbitration is entered into, a neutral arbitrator will be agreed upon by both parties.
  • If arbitration is sought, the venue must be convenient to both parties.
  • If a nursing home facility and a resident enter into arbitration, a copy of the binding decision must be retained by the facility for five years, and make that decision available for inspection by CMS.

“The overall impact of this final rule is to provide transparency in the arbitration process in nursing homes to the residents, their family and representatives, and the government,” according to CMS. The rule gives patients the right to say no and not be denied services.

Many patient advocates would welcome an outright ban of pre-dispute, binding arbitration agreements but the experts agree the courts would not support it.

The public comment period for this new proposed rule ends September 16, 2019. We will keep an eye on this deadline to see if any adjustments are made to the rule.

If you or a loved one is entering a nursing home, pay attention to these agreements and understand that you can refuse to sign. When in doubt, contact an attorney with experience in elder law, like those here at Estate & Elder Law Services.