CMS Rules No More Arbitration: Does it Matter?

CMS Rules No More Arbitration: Does it Matter?

As you may have heard, at the end of September the Department of Health and Human Services issued a new rule prohibiting nursing homes that receive federal funding from requiring its residents to solve any legal issues in arbitration, instead of court. The rule will become effective November 28, 2016, signifying the first major overhaul of nursing home regulations in 25 years. There are a few other notable rules in addition to the pre-dispute arbitration ban:

  • SNFs must provide “nourishing and palatable” dietary options that are inline with residents’ needs and preferences
  • SNFs must create an infection prevention and control program
  • SNFs must create a comprehensive, person-centered plan for every individual resident within 48 hours of admission
    • Either a nurse aide or dietician must contribute to the plan before it is finalized

This new ruling has raised a lot of questions and concerns among those in the SNF community. On the one hand, many are opposed to it because the previous system has helped nursing homes reduce legal costs. However, this has prevented the families of nursing home residents from getting justice and receiving fair compensation in a wide range of cases, including murder.

A handful of states (16 + the District of Columbia) have encouraged the government to cut off funding to SNFs that use the clauses, namely because they believe arbitration promotes patterns of wrongdoing and keeps families of residents from receiving a fair ruling.

The Good and the Bad

For some, this new ruling is not being welcomes with open arms, as it will undoubtedly increase costs for many SNFs. However, the fact of the matter is that numerous residents and their families have been cheated out of receiving compensation and justice for injuries – and even death – because of old school arbitration rules. Nursing homes operating below standards have not been held accountable for their actions – or inactions – which is simply not right.

The new ruling will roll out slowly, giving SNFs time to adjust and warm up to the changes. Keep in mind that the changes do not mean arbitration is never an option, but that the contracts are no longer written in a way that will automatically push both parties into arbitration. The policies are designed to reduce unnecessary hospital readmissions, improve quality of care, enhance safety measures for residents, reduce infections, and protect residents and their family members. This doesn’t sound so bad, does it?

We would love to hear your opinion on the CMS ruling. Are you a fan or in opposition to it? Why?
Shep Roylance and the JCH Senior Housing Group team are committed to staying on top of the latest news and rulings as they pertain to the SNF community. If you have any questions about today’s blog topic or a different industry-related news story, please do not hesiate to cotact us.