Binding Arbitration Agreements

The regulatory language and surveyor guidance was revised nearly in its entirety for binding arbitration agreements according to the advanced copy of Appendix PP F847 and F848.

F847

Binding Arbitration Agreements: 

If a provider chooses to ask a resident (or their representative) to enter into an agreement for binding arbitration, the provider must comply with all of the requirements of F847, including:

• The provider must not require the resident or representative to sign the agreement for binding arbitration as a condition of admission or continued stay.
• The provider must explicitly inform the resident/representative of their rights not to sign the agreement as a condition of admission or to continue to receive care.
• If a resident/representative agrees to sign an agreement for binding arbitration the provider must:
  • Ensure that the agreement is explained to the resident/representative in a form and manner that they understand, including a language that they understand.
  • Ensure that the resident/representative acknowledges, by signature, that they understand the agreement for binding arbitration.
  • Explicitly allow 30 calendar days from the date of signed agreement, to rescind the agreement.
  • The agreement must not contain any language that prohibits or discourages a resident or anyone else from communicating with federal, state, or local officials, including but not limited to, federal and state surveyors, other federal or state health department employees, and representatives of the Office of the State Long-Term Care Ombudsman.

Definitions:

The surveyor guidance includes revised definitions of arbitration, binding arbitration agreement, pre-dispute binding arbitration agreements, dispute, and judicial proceedings. These definitions should be included in a binding arbitration agreement policy and procedure, as applicable.

Surveyor Guidance:

If a provider includes a binding arbitration agreement in their resident paperwork, the provider must ensure that the binding arbitration agreement has 2 signatures.

• The first is acknowledging that the agreement was discussed with the resident and their representative in a language and manner that they understood. This signature is not consenting to the agreement but merely acknowledging that the binding arbitration agreement was discussed.
• The second is accepting the binding arbitration agreement.

The binding arbitration agreement must be transparent including identifying that the resident/representative is giving their rights to litigation up by signing the agreement.

The binding arbitration agreement may not be a stand-alone document. Some providers may include the binding arbitration agreement in the occupancy contract, however, in all cases, the provider must clearly distinguish the arbitration agreement from the admission agreement so that the resident/representative has a clear understanding of each agreement and are able to enter or decline the arbitration agreement.

F848:

If the provider chooses to have the resident/representative enter into an agreement for binding arbitration, the provider must ensure that the agreement provides for:

• The selection of a neutral arbitrator agreed upon by both parties, and
• The selection of a venue that is convenient to both parties.

When a dispute is resolved through arbitration, a copy of the signed agreement for binding arbitration and the arbitrator’s final decision must be retained by the provider for 5 years after the resolution of that dispute and be available for inspection upon request by CMS or its designee.

Surveyor Guidance:

The provider is able to put forward suggestions for the use of specific arbitrators and/or locations, however, the resident/representative is not obligated to use any of the suggested arbitrators or locations and may suggest alternative options. Providers are expected to make reasonable attempts to agree with the resident/representative’s selection and provide a fair process for selecting an arbitrator or arbitration services company.

The provider should promptly disclose to the resident/representative the extent of any relationship which exists with an arbitrator or arbitration services company, including how often the provider has contracted with the company or arbitrator, and when the arbitrator or service has ruled for or against the provider.