On September 28, the Centers for Medicare & Medicaid Services (CMS) published a final rule entitled "Medicare and Medicaid Programs; Reform of Requirements for Long-Term Care Facilities." Embedded in the updated rule is a prohibition on requiring residents to accept pre-dispute binding arbitration as a condition of admission to a facility.

Despite significant opposition from the nursing home industry, beginning November 28, nursing homes that participate in Medicare or Medicaid can no longer continue the common practice of requiring, in the paperwork signed on admission, that new residents consent to binding arbitration and waive their right to take the facility to court. However, the rule doesn't disallow arbitration agreements completely: a resident and the facility can agree to arbitrate after a dispute arises.

CMS also noted that the rule does not have any effect on existing arbitration agreements or render them unenforceable, nor does it prohibit residents from voluntarily agreeing to binding arbitration. Lastly, the rule only applies to long-term care facilities that participate in Medicare or Medicaid, and therefore will not apply to private-pay facilities or the majority of assisted living facilities.

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