A new CMS rule will bar nursing homes from compelling residents to settle disputes in arbitration as a condition of admission and introduces new requirements aimed at improving the quality of care and reducing unnecessary hospital readmissions.
The 713-page rule issued Wednesday is the first major update to requirements for long-term care providers since 1991. It takes aim at a common practice among nursing homes of requiring new residents to agree to binding arbitration and waive their right to take the facility to court as part of the stack of paperwork they or their families fill out when they arrive.
Beginning Nov. 28, facilities are prohibited from entering binding arbitration agreements before a dispute arises. The provision goes much further than the restrictions proposed in the draft rule and drew a swift and harshly worded response from one of the industry's largest trade groups.
The American Health Care Association said in a statement that the prohibition “clearly exceeds CMS' statutory authority and is wholly unnecessary to protect residents' health and safety.” The group said it is “considering the appropriate steps for it to take in light of this unjustified action."
The American Association for Justice, which represents trial lawyers, applauded the rule, saying the days of nursing homes using the agreements “to evade accountability and force residents and their families into signing away their legal rights are nearing an end.”
The rule also has many provisions intended to improve the quality of care provided at long-term care facilities. It requires dementia and abuse prevention training for nurse aides. The facilities will have to provide discharge planning by an interdisciplinary team, provide discharged residents and their caregivers with information about follow-up care and make sure care instructions are conveyed to receiving facilities and any other organization that will provide services.
The CMS received more than 10,000 comment letters on the draft version of the regulations issued in July last year. The nursing home industry was generally critical of the proposals.
“The magnitude and complexity of several of the proposed new requirements will, by necessity, mandate a more extended period of time for transition and training,” Leading Age, a trade group representing not-for-profit nursing homes and other organizations that provide aging services, told the CMS in a comment letter.
Leading Age did not immediately respond to a request for comment regarding the final rule.
The CMS is the nation's leading payer for long-term care services. About 64% of nursing home residents have their care paid for by Medicaid and another 14% are covered by Medicare, according to the American Health Care Association.
An estimated 1.5 million beneficiaries are receiving treatment at more than 15,000 long-term care facilities that participate in the Medicare and Medicaid programs.
The CMS estimates the policies will cost the industry $831 million in the first year the rule is in effect and $736 million over the subsequent two years.