CMS Issues Rule Against Involuntary Arbitration Agreements in Nursing Home Contracts

Commitment to Person-Centered Care for Long-Term Care Facility Residents

By: Andy Slavitt, Acting Administrator and Kate Goodrich, M.D., M.H.S., Director, Center for Clinical Standards & Quality, CMS

Commitment to Person-Centered Care for Long-Term Care Facility Residents

It’s an experience millions of Americans go through each year, the difficult decisions we face when considering a long-term care facility for a loved one. We want to know that our family member will be safe, properly cared for, and receive the highest quality of care.

We are committed to doing everything we can to increase the knowledge and power that can help families undergo these transitions, particularly with regard to the rights of residents to high quality safety and care. Last year, CMS began offering consumers and families the ability to easily compare facilities based on successful discharges, unplanned emergency visits, and re-hospitalizations through a five-star website. However, the rules of the road for long-term care facilities haven’t had a comprehensive update since 1991. Today, we are pleased to announce that we have finalized new rules to protect and empower residents of long-term care facilities.

Today’s rules are a major step forward to improve the care and safety of the nearly 1.5 million residents in the more than 15,000 long-term care facilities that participate in the Medicare and Medicaid programs. These new rules set high standards for quality and safety, while providing facilities with important flexibilities that will assist with the preservation of quality of life and quality of care, and are grounded in the concepts of person-centered care. These changes are an integral part of CMS’s commitment to transform our health system to deliver better quality care and spend our health care dollars in a smarter way, setting high standards for quality and safety in long-term care facilities.

Since proposing to update these rules in July 2015, as part of the White House Conference on Aging, we have received and reviewed nearly 10,000 comments from the public. Many of the comments highlighted an important topic: concern about the use of required binding arbitration agreements that many prospective residents must sign before they are admitted to a long-term care facility. We took all of the comments into careful consideration as we developed the final rule we released today.

Protecting Residents Rights

The rule makes important changes to strengthen the rights of residents and families in the event that a dispute arises with a facility. Historically, many facilities require residents to agree to binding arbitration clauses when they are admitted to these facilities. These clauses require the resident to settle any dispute that may arise using arbitration rather than the court system. Effective November 28, 2016, our final rule will prohibit the use of pre-dispute binding arbitration agreements. This means that facilities may not require residents to sign pre-dispute arbitration agreements as a condition of admission to that long-term care facility.

Facilities and residents will still be able to use arbitration on a voluntary basis at the time a dispute arises. Even then, these agreements will need to be clearly explained to residents, including the understanding that these arbitration agreements are voluntary, and that these agreements should not prevent or discourage residents and families from talking to authorities about quality of care concerns.

This is part of our ongoing commitment at CMS to making sure that health care becomes more person-centered for Medicare and Medicaid beneficiaries and their family members. These changes further that goal by protecting the health and safety of residents, particularly during vulnerable and critical times like when moving into a long-term care facility. Together, the new requirements in today’s final rule set high standards for quality and safety in long-term care facilities and will provide residents – and their families – with greater protections.

For more information on today’s announcement, please visit the CMS website at: