CMS may repeal ban on nursing home arbitration agreements

The Trump administration hinted to consumer organizations last week that it may repeal an Obama-era regulation that prohibits nursing homes from requiring patients to enter binding arbitration agreements.

The White House's Office of Management and Budget on Friday hosted several consumer organizations who were concerned about a pending rule that's being reviewed related to the use of arbitration at nursing homes.

The meeting came just a week after the CMS sent a proposed rule to the White House Office of Management and Budget to revise requirements imposed on long-term care facilities' arbitration agreements. A CMS spokesman didn't immediately respond to a request for comment on the intent of the proposed rule. A spokeswoman for the American Health Care Association, a trade group representing long-term care providers, said it had no information on the pending rulemaking. The OMB has 90 days to review the proposed rulemaking before sending it back to the CMS.

Neither OMB officials nor the CMS would say officially at the meeting what the pending rule would do. The gathering was attended by AARP, the National Consumer Voice for Quality Long-Term Care, the Center for Medicare Advocacy and the Long Term Care Community Coalition, as well as CMS officials.

However, the CMS hinted during the gathering that they were in favor of arbitration over litigation. During the meeting, officials from the CMS inquired if arbitration was more expeditious than going to court to settle disputes. An AARP attorney said there wasn't data to prove that, according to Robyn Grant, director of public policy and advocacy at the National Consumer Voice for Quality Long-Term Care, who attended the meeting.

In November, the CMS released a final rule that contained a section that barred nursing homes from compelling residents to settle disputes in arbitration as a condition of admission. The 700-page rulemaking was the first major update to long-term care provider requirements since 1991. It also contained provisions that required dementia and abuse-prevention training for nurse aides.

But the arbitration ban still hasn't gone into effect. The CMS said in December that it would not be enforced until a federal court lifts an injunction against it. The injunction stems from a legal challenge by the American Health Care Association.

Given the ongoing legal challenge, advocates believe that the pending rule will repeal last year's changes, Grant said.

The Trump administration had been expected to review the rulemaking, and the president has made it clear that he wants to reduce regulatory burdens on industry.

The American Health Care Association has argued the prohibition of arbitration exceeded the CMS' statutory authority.

On May 5, HHS was supposed to file a brief in response to the AHCA's suit, but it asked for a delay until June 2.

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 lawsuits. The cost of prolonged cases, along with falling reimbursement rates, could force some nursing homes to close, industry stakeholders say.