The CMS has hit the brakes on enforcing a rule that prohibits nursing facilities from requiring patients to enter binding arbitration agreements before a dispute arises.
In a largely unnoticed memo sent to states and Medicare contractors in December, the agency said the ban will not be enforced until an injunction against it is lifted.
A judge in the U.S. District Court for the Northern District of Mississippi in November granted a request by the American Health Care Association, the industry trade group, and four other state and local health care groups for an injunction.
The ban had been slated to go into effect on Nov. 28. The memo also stated that facilities will not be audited by Medicare surveyors.
It remains to be seen how the incoming Trump administration will view the rule banning mandatory arbitration clauses in nursing home contracts. However, the president-elect has vowed to dramatically lower regulatory burdens on business, and the new rule has been actively opposed by the nursing home industry.
Arbitration agreements prevent families who believe their loved ones received bad care at nursing homes from suing. Some families say they often feel pressured to sign the contracts and don't understand what they're agreeing to. They only find out later that awards through arbitration in nursing home cases are usually lower than those reached in court.
The nursing home industry prefers arbitration since it offers a less costly alternative to court. The cost of prolonged cases, along with falling reimbursement rates, could force some nursing homes to close, industry stakeholders say.