CMS NEWS

FOR IMMEDIATE RELEASE
July 16, 2019

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CMS Rules Put Patients First Updating Requirements for Arbitration Agreements and New Regulations That Put Patients Over Paperwork

Proposed rule saves $616 million annually for nursing homes

Today, the Centers for Medicare & Medicaid Services (CMS) announced two rules – one proposed and one final – that emphasize the agency’s commitment to ensuring safety and quality in nursing homes. These rules are components of the agency’s five-part approach to ensuring a high-quality long term care (LTC) facility system, which Administrator Seema Verma announced in April. Administrator Verma’s approach includes strengthening requirements for LTC facilities, also known as nursing homes, working with states to enforce statutory and regulatory requirements, increasing transparency of nursing home performance, improving quality, and putting patient safety first by removing unnecessary burdens on providers. In addition to protecting patients and reducing burdens, the rule helps nursing homes focus their resources on their residents by saving them $616 million in administrative costs annually that can be reinvested in patient care.

The proposed rule (Medicare and Medicaid Programs; Requirements for Long-Term Care (LTC) Facilities: Regulatory Provisions to Promote Efficiency and Transparency) allows LTC facility providers to devote more of their time and resources to their residents – instead of unnecessary paperwork – by eliminating obsolete or excessively burdensome regulations. It is also part of CMS’agency-wide effort to reduce burden, the Patients Over Paperwork initiative, and would respond to President Trump’s Executive Order that directs federal agencies to “cut the red tape.”

“The Trump administration is helping nursing homes provide high-quality care by allowing them to focus their time and resources on residents – not unnecessary process and outdated regulations,” said CMS Administrator Seema Verma. “We know our regulations work best when they are smart, targeted, and patient-focused, so we have taken a close look at our rules with patients and burden in mind. We’ve identified opportunities for reducing provider burden while maintaining high quality resident care.”

The proposed rule would eliminate prescriptive requirements and allow commonsense flexibilities. For example, CMS proposes to eliminate unnecessary details of the Quality Assurance Improvement Program (QAPI) requirements while maintaining the overall structure and intent – improving patient outcomes. This would help nursing homes implement more effective quality improvement programs.

In addition, CMS proposes revisions to certain requirements included in the third phase of CMS’ comprehensive 2016 regulatory overhaul, which are scheduled to be implemented in November 2019. To avoid confusion and promote transparency, CMS proposes to allow one year following the effective date of the final rule for implementation.

In a related effort to protect nursing home residents’ right to make informed choices, CMS has issued a final rule updating the requirements nursing homes must meet to use binding arbitration agreements. Pre-dispute binding arbitration agreements are arrangements, whereby two parties agree to settle future disputes through an arbitration process rather than through litigation, and requires both parties to accept the arbitration process’ outcome. In October 2016, the previous administration banned the use of pre-dispute binding arbitration agreements in long term care facilities, but was unable to enforce it due to a legal challenge and subsequent injunction.

In June 2017, in accordance with the injunction, CMS published a proposed rule that would remove the ban on pre-dispute binding arbitration agreements, and solicited public comments. CMS determined that resident rights must be protected by allowing them the ability to choose their method of dispute resolution, while preserving access to all possible choices, including arbitration, a method that often cost resident much less than litigation.

The CMS proposal supports patients and their caregivers by removing the ban on binding arbitration agreements while requiring nursing homes to ensure residents have the ability to choose the method of dispute resolution they want. CMS is allowing binding arbitration agreements, but will prohibit nursing homes from requiring residents to sign binding arbitration agreements as a condition for receiving care, and will require nursing homes to inform residents or their representatives that they are not required to sign a binding arbitration agreement. Finally, CMS is prohibiting nursing home arbitration agreements from including language preventing residents or anyone else from communication with federal, state, or local officials.

These proposed and final rules are the latest in a series of steps CMS is taking to focus on patients, increase efficiencies and transparency, and strengthen the safety and quality of care beneficiaries receive in this setting. To learn more about the proposed and final rules, please visit https://www.federalregister.gov/public-inspection. CMS looks forward to feedback on the proposed rule and will accept comments until September 16, 2019. Comments may be submitted electronically here: https://www.regulations.gov/

Fact sheets on each of these rules are available here: LTC Regulatory Provisions and Arbitration Agreement.