CMS Looks to Improve Long-Term Care Protection for Residents

Yesterday, CMS announced a proposed rule that would cut down the regulatory burden for long-term care (LTC) facilities and released a finalized rule which updated the requirements for nursing home binding arbitration agreements.

“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provide high-quality care by allowing them to focus their time and resources on residents – not unnecessary process and outdated regulations,” said CMS Administrator Seema Verma in the announcement. “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.”

The proposed rule would eliminate requirements that are identified as “unnecessary, obsolete, or excessively burdensome” for nursing homes and other LTCs. For example, the rule would reduce the frequency of LTC facility assessments and streamline compliance and ethics programs. 

If finalized, the rule would also provide greater flexibility in terms of director of food and nutrition service recertification and quality assurance and improvement program improvement programs development, as well as increase the transparency and formality of the informal dispute resolution process.

CMS anticipates nursing homes will save $616 million annually if the rule is implemented. 

The same day, the agency also finalized a rule that modifies LTC arbitration requirements. Formerly, CMS banned pre-dispute, binding arbitration agreements, in which parties elect to follow the decision of a neutral third-party and waive their rights to sue, trial by jury, class action lawsuit participation, or judicial review, according to the American Bar Association.

According to the finalized rule, LTCs must state clearly in the agreement that binding arbitration is not required to live in or receive care at a facility. Otherwise, CMS believes, the resident may have to decide between agreeing to potential arbitration with certain critical rights waived and receiving needed medical attention and care.

LTCs now need to express the agreement’s contents to the resident or the resident’s representative in an understandable way and the resident or representative must express that they understand the contents. The process must be enacted in a language the resident or representative knows. This enforces transparency between the LTC and their resident.

Additionally, if the contract contains an arbitration element, the parties must agree on a neutral arbitrator. This is particularly for the resident’s protection, CMS specifies, to ensure a fair process should arbitration be necessary.

To further protect the resident, the agreement may not prohibit or cast negatively any communication between the resident and federal, state, or local officials. Residents should feel free to bring any complaints or grievances to the local authorities.

For five years following the arbitration, the facilities must have copies of the signed arbitration agreement and the arbiter’s decision available for CMS review if needed. 

The concept of pre-dispute, binding arbitration agreements has long been a controversial proposal. The original rule prohibited binding pre-disposition arbitration agreements and was finalized in October 2016. It met immediate opposition from the American Health Care Association (AHCA) and a group of nursing homes in northern Mississippi. By the end of 2016, CMS decided that the rule should not be enforced anywhere in the nation. 

The next year saw another proposed rule that still included an arbitration agreement but stipulated it must be set down “in plain language.” With this new finalized proposal, the line was stricken from the final proposal entirely.

These two rules are part of CMS’five-part strategy to ensure safety and quality in long-term care facilities, which includes strengthening oversight, enhancing enforcement of health and safety standards, increasing transparency, improving quality of care and outcomes, and putting patients over paperwork to decrease the administrative and regulatory burden.

“CMS is not waiting, and not settling for the status quo,” Verma said when she announced the five-pronged approach. “I have directed my team at CMS to undertake a comprehensive review of our regulations, guidelines, internal structure, and processes related to safety and quality in nursing homes. America deserves nursing homes that ensure residents are treated with dignity and kept safe from abuse and neglect; that are rewarded for value and quality; whose patient outcomes are transparent to consumers; all without unnecessary paperwork that keeps providers from focusing on patients.”