Last week, the Centers for Medicare and Medicaid (“CMS”), a part of the Department of Health and Human Services, issued a new Final Rule applicable to all long term care facilities that accept Medicare and Medicaid funds.

This Final Rule included a number of provisions, but one of the most-talked about is a new requirement that prohibits facilities that receive Medicare and/or Medicaid funds from using pre-dispute arbitration agreements.  This means facilities may no longer request or require that residents or their representatives sign an arbitration agreement prior to an incident occurring, such during the admissions process.

This rule goes into effect on November 28, 2016.  For agreements already in place prior to the effective date, this Final Rule will have no effect on the enforceability of the agreements.  However, after this date, facilities receiving Medicare and Medicaid funds may not enter into an arbitration agreement with a resident or his or her representative at any time prior to the occurrence of an incident.

Facilities and their residents will not be prevented from entering into an agreement to arbitrate a dispute after an incident occurs – such as when a resident has a fall.

The CMS Press Release on the Final Rule can be read here:

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-09-28.html