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CMS Bans Nursing Homes’ Use of Pre-Dispute Arbitration Agreements

In a new ruling by The Centers for Medicare and Medicaid Services (CMS), nursing homes will no longer be allowed to force residents’ disputes into the private system of justice known as arbitration. For families, this represents a major victory. For many years, arbitration clauses imbedded in the fine print of nursing home admission contracts kept complaints about issues like negligence, elder abuse, sexual harassment, and wrongful death out of the courts—and out of the public eye.

Thirty-four senators and sixteen state attorneys general supported the blanket prohibition on pre-dispute arbitration agreements that was signed into law on November 28, 2016. It will affect only future nursing home admissions; pre-existing arbitration agreements will still be enforceable. After a dispute arises, the resident and the long-term care facility will still have the option to enter into a binding arbitration agreement if both parties agree.

Will the long-term care industry challenge the new CMS rule in court? They already have. In November, a Mississippi federal judge temporarily blocked the implementation of the rule.

We will keep you posted as this case develops.

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