Do you have to sign a nursing home arbitration agreement?
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Key takeaways
- A certified nursing home may ask you to sign a binding arbitration agreement, but it cannot require it as a condition of admission or of continuing to receive care.
- If you sign, the agreement must give you the right to rescind it within 30 calendar days.
- Signing generally means a future dispute covered by the agreement would be decided by a private arbitrator instead of a court.
- Breaking the federal rule does not automatically cancel an agreement. Whether one can be enforced is decided under state contract law.
No. A nursing home certified for Medicare or Medicaid may ask you to sign a binding arbitration agreement, but federal rules say it "must not require" a resident or representative to sign one as a condition of admission or of continuing to receive care. If you sign and change your mind, the agreement must give you 30 calendar days to rescind it.
What are your choices at admission?
| If you | What federal rules and CMS guidance say |
|---|---|
| Decline to sign | The home cannot refuse to admit you because you declined. You must be allowed to sign the admission agreement without agreeing to arbitration. |
| Sign | The agreement must give you the right to rescind it within 30 calendar days of signing. |
| Are asked later in the stay | A home may offer an agreement at any time. It still cannot make signing a condition of continuing to receive care. |
What does signing mean?
Arbitration is a private way to settle a dispute. CMS describes it as a process in which the two sides agree that one or more other people will decide the dispute after receiving evidence and hearing arguments. In binding arbitration the decision is final, can be enforced by a court and can be appealed only on very narrow grounds. An agreement signed at admission covers disputes that have not happened yet.
CMS tells inspectors that the home's explanation should include that the resident "may be giving up his or her right to have a dispute decided in a court proceeding." It also notes that the results of arbitration are typically not made public.
What must the agreement include?
Under the federal rule (42 CFR § 483.70(m)), a home that asks for binding arbitration must make sure that:
- The agreement states that you are not required to sign it as a condition of admission or of continuing to receive care, and the home tells you so.
- The agreement is explained in a form, manner and language you understand, and you acknowledge that you understand it.
- It provides for a neutral arbitrator agreed on by both sides. CMS guidance says you are not obligated to use the arbitrator the home suggests.
- It provides for a venue that is convenient to both sides.
- It gives you the right to rescind within 30 calendar days of signing.
- It contains nothing that prohibits or discourages you or anyone else from communicating with federal, state or local officials, including inspectors and the long-term care ombudsman.
These requirements apply to agreements entered into on or after September 16, 2019.
Can the agreement be part of the admission packet?
Yes. CMS guidance says a home may put the arbitration agreement inside the admission contract, that all the requirements still apply, and that residents "must be allowed to sign an admissions agreement without consenting to the facility's arbitration agreement." It adds that a signature alone may not be enough to show the agreement was understood.
Who can sign for a resident?
The rule lets a resident's representative sign, but it does not decide who has that authority. State law does. Inspectors check that a representative who signed had the legal authority to do so, and federal rules say a home may not treat a representative as having more authority than the resident, state law or a court has given. Whether a particular power of attorney covers arbitration depends on the document and on state law.
What if you already signed?
- Within 30 calendar days. The agreement must give you the right to rescind. The rule does not say how, so the agreement itself is the place to look. CMS guidance says a home should have a process for this and explain it to you.
- After 30 days. The federal rule does not decide whether an agreement can be enforced. A federal appeals court, the Eighth Circuit, upheld the rule in 2021 and said an agreement signed in violation of it would still be enforceable unless a general contract defense such as fraud, duress or unconscionability applies. That is decided under state contract law, and outcomes differ from state to state.
- Sexual assault or harassment claims. A separate federal law lets a person who alleges sexual assault or sexual harassment choose not to be bound by a pre-dispute arbitration agreement for that case. It covers claims that arise on or after March 3, 2022.
An elder law attorney or your long-term care ombudsman can explain how this works in your state.
What else can't an admission agreement require?
Federal rules also bar a certified nursing home from asking or requiring you to:
- Waive your rights as a resident, including your rights to Medicare or Medicaid.
- Promise that you are not eligible for, or will not apply for, Medicare or Medicaid.
- Waive the home's potential liability for losses of personal property.
- Have a third party guarantee payment as a condition of admission, expedited admission or continued stay.
The Consumer Financial Protection Bureau tells caregivers: "You can refuse to sign a nursing home admissions contract that tries to hold you personally responsible for the resident's bills." See also what a nursing home may do with a resident's money and residents' rights.
Does this apply to assisted living?
No. The rule applies to nursing homes that take part in Medicare or Medicaid. Assisted living is not covered by the federal nursing home rules. See nursing home vs. assisted living.