CMS Issues Guidance on Use of Arbitration Agreements

On July 18, 2019, the Centers for Medicare & Medicaid Services (CMS) published its final rule that revised the arbitration agreement requirements for nursing facilities that participate in the Medicare and Medicaid programs.  In general, the final rule prohibited nursing facilities from requiring individuals to agree to arbitration as a condition of admission or continued stay at the facility.  The final arbitration rule became effective on September 16, 2019, but CMS indicated that it would not survey for compliance with the final arbitration rule until further guidance was issued.

On June 29, 2022, CMS finally issued its guidance related to the use of binding arbitration agreements in the nursing facility setting.  The guidance addresses the specific content requirements related to binding arbitration agreements, including the requirement that the agreement be written in easily understood language, with an acknowledgement by the resident or his/her representative.  The CMS guidance also addresses arbitrator/venue selection and the retention of arbitration agreements for review by CMS or its designee.  For example, an agreement for binding arbitration must provide for the selection of a neutral arbitrator agreed upon by both parties as well as the selection of a venue that is convenient to both parties.  The arbitration agreement also must grant the resident or his/her representative the right to revoke within 30 days of execution.  Surveyors will begin measuring compliance with the arbitration guidance starting on October 24, 2022.

Whether a facility has an arbitration clause within its admission agreement or utilizes a separate stand-alone arbitration agreement, we recommend reviewing such clause or agreement for compliance with the recent CMS guidance.  Further, the guidance will require adjustments to facility policies and procedures regarding the admission process, with appropriate training provided to administrative staff.

If you have any questions regarding the CMS guidance and/or would like assistance in revising your current arbitration clause or arbitration agreement, please contact Dayna E. Mancuso, Esq. ( at 717-620-2424.