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Arbitration Regulation Reminder

“As reminder, CMS’s new arbitration regulations go into effect on Monday, September 16. A district court decision on the new rule is not expected until the end of 2019.

CMS will regulate SNF arbitration agreements effective September 16, 2019. This does not apply to agreements signed before that date. This regulation applies to all admissions that take place starting Monday.

The new regulation includes the following:

  • Effective September 16
  • Arbitration agreement cannot be condition of admission or continuation of care
  • Agreement must be presented in form, language AND manner that resident can understand
  • Agreement must provide for neutral arbitrator and venue
  • Resident must have right to cancel agreement within 30 days of signing
  • Agreement must not discourage resident from communicating with federal or local officials
  • If dispute settled by arbitration: Copy of signed agreement and arbitration award must be kept for 5 years and available for inspection by CMS

AHCA’s updated model arbitration agreement is available by clicking here. You can also listen to the AHCA webinar online here. Additional resources are available here.

Two operators filed a case to stop the new rule in the Western District of Arkansas. As part of their lawsuit, the operators asked the court to grant a preliminary injunction against the new rule going into effect on September 16. The government offered to delay the enforcement of the new rule only for the two named plaintiffs in the case. This was a smart tactical move because there is just no way the plaintiffs could turn down that offer and then credibly turn to the judge and ask for a ruling on their preliminary injunction motion. As it relates to them, the government had already offered the relief. One accommodation that the government made was to agree to an expedited briefing schedule. The court is likely to enter a schedule that will require all briefing occur in the next 75 days, which will allow the court to decide on the case by the end of the year.

I have had some discussion with members about whether it is possible that they could avoid the new rule by intervening as plaintiffs in the case. That is possible, but it is not certain. All impacted parties certainly have the right to file to intervene. I believe it’s likely the judge would grant those motions. There is a separate question of whether the government would then agree to avoid a preliminary injunction process by delaying the new rule for new plaintiffs. It agreed to do so when there were just two companies and roughly 80 buildings involved. Would it do so if the number of plaintiffs was larger? We don’t know the answer to that question.

The bottom line is that we need to be ready to implement the new regulation on Monday and it is likely to be in effect until at least the end of the year.” 

Author: Mark Parkinson

Categories: Uncategorized