Arbitration was originally used to resolve business-to-business disputes, but in the 1980s its use was expanded to cover consumer disputes, including cases of abuse or neglect in care homes. Retirement home managers found that arbitration procedures were faster and less costly than taking a case to court. Like these many other industries across the country, many health care facilities offer their residents the opportunity to choose arbitration as a means of resolving future disputes, i.e. before a dispute or „pre-litigation“ is pending. Pre-litigation agreements allow parties to resolve future disputes through arbitration, not litigation. In October 2016, the Obama administration banned the use of binding arbitration agreements in health care facilities, but in response to a legal challenge, a federal judge declared the ban illegal and issued an injunction that prevented CMS from enforcing the rules. Institutions should also look at what the state`s higher courts have said about arbitration procedures, and examine how admissions processes are conducted in light of the new requirements, Bilmoria said. „From my point of view, the final rule is perhaps the strongest version of consumer protection in arbitration agreements that do not have a total ban on conciliation agreements before dismemberments,“ brian McGovern, a partner in the New York office of the law firm Crowell-Moring, told SNN. „I think it`s CMS`s attempt to allow the objectives of the duel, the implementation of arbitration agreements that would be consistent with the decisions of the Federal Arbitration Act (FAA) and the Supreme Court, and to offer residents and consumers better protection from arbitration without understanding the impact. It is a place to listen.
The final rule provides that arbitration agreements provide for comfortable hearing places for both parties. To do so, inter-professional agreements have traditionally required that consultation be located near the facility or in a location acceptable to both parties, assuming that a site near the facility would meet the needs of residents if the resident were to participate. The lack of clarity in the new CMS provision could create uncertainty, particularly in these circumstances, if one of the parties is a state representative.