Medicare and Medicaid Programs; Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements, 26649-26653 [2017-11883]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 82, Number 109 (Thursday, June 8, 2017)]
[Proposed Rules]
[Pages 26649-26653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11883]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 483

[CMS-3342-P]
RIN 0938-AT18


Medicare and Medicaid Programs; Revision of Requirements for 
Long-Term Care Facilities: Arbitration Agreements

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the requirements that Long-
Term Care (LTC) facilities must meet to participate in the Medicare and 
Medicaid programs. Specifically, it would remove provisions prohibiting 
binding pre-dispute arbitration and strengthen requirements regarding 
the transparency of arbitration agreements in LTC facilities. This 
proposal would support the resident's right to make informed choices 
about important aspects of his or her health care. In addition, this 
proposal is consistent with our approach to eliminating unnecessary 
burden on providers.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on August 7, 2017.

ADDRESSES: In commenting, please refer to file code CMS-3342-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-3342-P, P.O. Box 8010, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-3342-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: LTC Regulations Team: Diane Corning, 
Sheila Blackstock or Lisa Parker at (410) 786-6633.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: https://www.regulations.gov. Follow the search

[[Page 26650]]

instructions on that Web site to view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

    On October 4, 2016, we published in the Federal Register a final 
rule entitled ``Reform of Requirements for Long-Term Care Facilities'' 
(81 FR 68688) (2016 final rule). The 2016 final rule amended 42 CFR 
483.70(n) to prohibit long-term care (LTC) facilities from entering 
into pre-dispute arbitration agreements with any resident or his or her 
representative or requiring that a resident sign an arbitration 
agreement as a condition of admission to the LTC facility. Prior to the 
2016 final rule, the Requirements for Long-Term Care Facilities were 
silent on any arbitration requirements. However, the Centers for 
Medicare & Medicaid Services (CMS) did issue sub-regulatory guidance 
that supported arbitration between residents and their facilities. See 
Fairness in Nursing Home Arbitration Act of 2008: Hearing on H.R. 6126 
Before the Committee on the Judiciary, 110th Cong. (2008) (letter from 
Department of Health and Human Services dated July 29, 2008 opposing 
the H.R. 6126 that would have made pre-dispute mandatory arbitration 
agreements between long-term care providers and residents 
unenforceable); and Binding Arbitration in Nursing Homes, Survey and 
Certification Letter dated January 9, 2003 (S&C-03-10).
    The 2016 final rule also requires that an agreement for post-
dispute binding arbitration must be entered into by the resident 
voluntarily, that the parties must agree on the selection of a neutral 
arbitrator, and that the arbitral venue must be convenient to both 
parties. Under the 2016 final rule, an arbitration agreement could be 
signed by another individual only if allowed by the relevant state's 
law, all of the other requirements in this section are met, and that 
individual had no interest in the facility. In addition, the rule 
stated that a resident's right to remain at the facility could not be 
contingent upon the resident or his or her representative signing an 
arbitration agreement. The arbitration agreement also could not contain 
any language that prohibited or discouraged the resident or anyone else 
from communicating with federal, state, or local officials, including 
but not limited to, federal and state surveyors, other federal and 
state health department employees, and representatives of the Office of 
the State Long-Term Care Ombudsman, in accordance with Sec.  483.10(k). 
In addition, when a LTC facility and a resident resolved a dispute 
through arbitration, a copy of the signed agreement for binding 
arbitration and the arbitrator's final decision was required to be 
retained by the facility for 5 years and be available for inspection 
upon request by the CMS or its designee.
    We adopted the 2016 final rule after considering a wide range of 
comments from diverse array of individuals and organizations. For 
example, we noted that:

    Many commenters argued that arbitration was beneficial for 
residents and their families as well as facilities. Disputes could 
be resolved more quickly and with less animosity and expense than 
litigation. Some commenters also argued that prohibiting these 
agreements would only benefit lawyers, result in protracted 
litigation, increased costs to the facilities, and increase the 
burden on an already overwhelmed court system. This would also 
result in resources for resident care being diverted for litigation. 
Other commenters argued that prohibiting arbitration could be 
detrimental to residents.

    In response to these comments, we recognized unequivocally that 
``[t]here are both advantages and disadvantages associated with both 
pre-dispute arbitration agreements and arbitration itself.'' We weighed 
those advantages and disadvantages when we reversed existing policy 
through the adoption of the 2016 final rule.
    On October 17, 2016, the American Health Care Association and a 
group of affiliated nursing homes filed a complaint in the United 
States District Court for the Northern District of Mississippi seeking 
a preliminary and permanent order enjoining agency enforcement of the 
prohibition on pre-dispute arbitration agreements regulation (Sec.  
483.70(n)(1)). On November 7, 2016, thirty-four days after the issuance 
of the regulation prohibiting pre-dispute arbitration agreements, the 
district court preliminarily enjoined enforcement of that regulation. 
On December 9, 2016, we issued a nation-wide instruction to State 
Survey Agency Directors, directing them not to enforce the 2016 final 
rule's prohibition of pre-dispute arbitration provisions during the 
period that the court-ordered injunction remained in effect (S&C: 17-
12-NH) https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-17-12.pdf).
    The district court held that the plaintiffs were likely to prevail 
in their challenge to the 2016 final rule. It concluded that it would 
likely hold that the rule's prohibition against LTC facilities entering 
into pre-dispute arbitration agreements was in conflict with the 
Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The court also 
reasoned that it was unlikely that CMS could justify the rule, or could 
overcome the FAA's presumption in favor of arbitration, by relying on 
the agency's general statutory authority under the Medicare and 
Medicaid statutes to establish rights for residents (sections 
1891(c)(1)(A)(xi) and 1919(c)(1)(A)(xi) of the Act) or to promulgate 
rules to protect the health, safety and well-being of residents in LTC 
facilities (sections 1819(d)(4)(B) and 1919(d)(4)(B) of the Act).
    We have determined that further analysis is warranted before any 
rule takes effect. We believe that a policy change regarding pre-
dispute arbitration will achieve a better balance between the 
advantages and disadvantages of pre-dispute arbitration for residents 
and their providers. Additionally, we have reviewed the ``Requirements 
for Long-Term Care Facilities,'' consistent with the January 30, 2017 
Executive Order ``Reducing Regulation and Controlling Regulatory Costs 
(E.O. 13771). We believe that a ban on pre-dispute arbitration 
agreements would likely impose unnecessary or excessive costs on 
providers. We invite comments on our revised approach.

II. Provisions of the Proposed Regulations

    We are proposing to revise the provisions related to pre-dispute 
arbitration at Sec.  483.70(n). Specifically, we propose to remove the 
requirement at Sec.  483.70(n)(1) precluding facilities from entering 
into pre-dispute agreements for binding arbitration with any resident 
or resident's representative, which we do not believe strikes the best 
balance between the advantages and disadvantages of pre-dispute 
arbitration. For the same reason, we also propose removing the 
prohibition at Sec.  483.70(n)(2)(iii) banning facilities from 
requiring that residents sign arbitration agreements as a condition of 
admission to a facility. And, we propose removing the provisions at 
Sec.  483.70(n)(2)(ii) regarding the terms of arbitration agreements.
    We would retain provisions that protect the interests of LTC 
residents in situations where a facility chooses to

[[Page 26651]]

ask a resident or his or her representative to enter into an agreement 
for binding arbitration (whether pre-dispute or post-dispute). We 
propose to retain the requirements that the agreement be explained to 
the resident and his or her representative in a form and manner that he 
or she understands, including in a language that the resident and his 
or her representative understands; and the resident acknowledges that 
he or she understands the agreement. We also propose to retain the 
requirements that the agreement must not contain any language that 
prohibits or discourages the 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, in accordance with Sec.  483.10(k).
    Finally, we would retain the requirement that when the facility and 
a resident resolve a dispute through arbitration, a copy of the signed 
agreement for binding arbitration and the arbitrator's final decision 
must be retained by the facility for 5 years and be available for 
inspection upon request by CMS or its designee.
    We propose to add a requirement that the facility must ensure that 
the agreement for binding arbitration is in plain language. If an 
agreement for binding arbitration is a condition of admission, it must 
be in plain writing in the admission contract. We also propose to 
require facilities to post a notice in plain language that describes 
its policy on the use of agreements for binding arbitration in an area 
that is visible to residents and visitors. We believe this revised 
approach is consistent with the elimination of unnecessary and 
excessive costs to providers while enabling residents to make informed 
choices about important aspects of his or her healthcare.
    The provisions contained in this document are authorized by the 
Secretary of the Department of Health and Human Services (Secretary) 
general rulemaking authority under sections 1102 and 1871 of the Act. 
In those provisions, the Congress granted the Secretary broad authority 
to promulgate regulations as may be necessary to administer Medicare 
and Medicaid programs.
    The agency has statutory authority to issue these rules under the 
authority granted by the Congress in the Nursing Home Reform Act, part 
of the Omnibus Budget Reconciliation Act of 1987 (OBRA 87), Public Law 
100-203, 101 Stat. 1330 (1987). That statute amended sections 1819 and 
1919 of the Act, authorizing the agency to promulgate regulations that 
are ``adequate to protect the health, safety, welfare, and rights of 
residents and to promote the effective and efficient use of public 
moneys.'' (Sections 1819(f)(1) and 1919(f)(1) of the Act). In addition, 
the Social Security Act authorizes the Secretary to impose ``such other 
requirements relating to the health and safety [and well-being] of 
residents as [he] may find necessary.'' (Sections 1819(d)(4)(B) and 
1919(d)(4)(B) of the Act). Under sections 1819(c)(1)(A)(xi) and 1919 
(c)(1)(A)(xi) of the Act, the Secretary may also establish ``other 
right[s]'' for residents, in addition to those expressly set forth in 
the statutes and regulations, to ``protect and promote the rights of 
each resident.'' This proposed rule does not purport to regulate the 
enforceability of any arbitration agreement, and does not pose any 
conflict with the language of the FAA.
    As noted, we have reconsidered whether a complete ban on pre-
dispute arbitration agreements does, in fact, promote efficiency and 
fairness. Upon reconsideration, we believe that arbitration agreements 
are, in fact, advantageous to both providers and beneficiaries because 
they allow for the expeditious resolution of claims without the costs 
and expense of litigation. This conclusion is reinforced by comments we 
received in response to the July 16, 2015 proposed rule (80 FR 42168). 
In those comments, a number of commenters pointed out the advantages of 
arbitration for residents and facilities. Specifically, commenters 
noted that the amount of time and expense associated with arbitration 
is less than that for litigation in most cases. To view public comments 
received on the Reform of Requirements for Long-Term Care Facilities 
proposed rule (80 FR 42167), visit https://www.regulations.gov. Enter 
the Docket ID: ``CMS-2015-0083'' in the search bar and follow the links 
provided. For additional assistance with viewing public comments, 
follow the search instructions on that Web site.
    A number of commenters also noted that disputes resolved through 
arbitration could be resolved more quickly than those that go through 
the litigation process. Between the trial and appeals, it could take 
years for a case to go through the court system. For an elderly 
resident, this could mean no resolution in their lifetime. In addition, 
although there are costs associated with arbitration, litigation can 
also be costly for a resident.
    We are also concerned about the effect that judicial litigation 
could have on residents who continue to reside in the same facility. 
Judicial actions are necessarily adversarial. Arbitrations may be less 
adversarial. Since arbitration is something that the parties have 
already agreed to, and since it has the potential to resolve a dispute 
faster and more efficiently than litigation, we believe it is likely to 
place less strain on the relationship between the facility and the 
residents (and their families).
    Upon reconsideration and subsequent review of the comments we 
received from facilities responding to the July 2015 proposed rule, we 
also believe that the 2016 final rule may have underestimated the 
financial burdens placed on providers who are forced to litigate claims 
in court. These commenters pointed out that arbitration is often less 
financially burdensome than a court case, and that facilities who must 
litigate claims in court must devote scarce resources to defending 
cases.
    We acknowledge comments received in response to our earlier 
rulemaking expressing concern about the use of arbitration agreements 
in LTC facilities. The commenters stated that, given their age and/or 
physical or mental condition, many residents may be signing these 
agreements without fully understanding their terms. Commenters also 
expressed concern that confidentiality clauses may prohibit the 
resident and others from discussing any incidents with individuals 
outside the facility, such as surveyors and representatives of the 
Office of the State Long-Term Care Ombudsman because these restrictions 
could create barriers for surveyors and other responsible parties to 
obtain information related to serious quality of care issues.
    We believe that this proposed rule would sufficiently address these 
concerns because it would strengthen the requirements necessary to 
ensure the transparency of arbitration agreements in LTC facilities, 
and would ensure that arbitration agreements did not contain language 
discouraging interested parties from communicating with federal, state, 
or local officials.
    Furthermore, in light of the protections for residents that we are 
proposing to include in this rulemaking, our reconsideration of the 
conclusions of the rule discussed above, and subsequent review of the 
public comments that we received on the July 16, 2015 proposed rule (80 
FR 42168) expressing support of arbitration in LTC settings, we now 
believe that an outright ban on pre-dispute arbitration agreements and 
the further restrictions on post-dispute arbitration agreements do not 
strike the best policy balance. An

[[Page 26652]]

outright prohibition of arbitration agreements would significantly 
increase the cost of care, and would require facilities to divert 
scarce resources from the care of their residents to the defense of 
expensive litigation.
    In short, upon reconsideration, we believe that a ban on pre-
dispute arbitration agreements is not the appropriate policy for all 
residents. Residents or their representatives should be able to make 
the decision to sign a pre-dispute arbitration agreement as long as 
there is transparency in the arbitration process. Furthermore, we 
believe this proposed rule is consistent with the FAA. Therefore, we 
are proposing to modify the 2016 final rule.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.

Omnibus Budget Reconciliation Act of 1987 Waiver

    Ordinarily, we are required to estimate the public reporting burden 
for information collection requirements for this regulation in 
accordance with chapter 35 of title 44, United States Code. However, 
sections 4204(b) and 4214(d) of the Omnibus Budget Reconciliation Act 
of 1987, Public Law 100-204 (OBRA '87) provide for a waiver of 
Paperwork Reduction Act (PRA) requirements for this regulation. Thus, 
we have not provided an estimate for any paperwork burden related to 
these proposed revisions and additions.
    If you comment on this information collection, that is, reporting, 
recordkeeping or third-party disclosure requirements, please submit 
your comments electronically as specified in the ADDRESSES section of 
this proposed rule.
    Comments must be received on/by August 7, 2017.

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

V. Regulatory Impact Statement

A. Statement of Need

    The district court's decision in granting the preliminary 
injunction against enforcement of the prohibition on pre-dispute 
arbitration agreements indicated that CMS would at a minimum face some 
substantial legal hurdles from pursuing the arbitration policy set 
forth in the 2016 final rule. We have reviewed the provisions and 
determined that the arbitration requirements should be revised. We 
believe that the protections for residents that we are proposing in 
this rulemaking strike a better balance of competing policy concerns. 
The revisions to these requirements in this proposed rule will increase 
transparency in LTC facilities that chose to use arbitration.

B. Overall Impact

Posting a Notice Regarding the Facility's Use of Arbitration Agreements
    We are proposing that LTC facilities post a notice regarding the 
use of arbitration agreements in an area that is visible to residents 
and visitors. This would require the facility to develop a notice and 
post it in a conspicuous area. We believe that notices concerning 
facility practices are periodically developed, reviewed, and updated as 
a standard business practice. We also believe that facilities that are 
already using arbitration agreements post some type of notice. Thus, 
there is no burden associated with the posting of this notice.

C. Summary of Impacts

    As discussed above, we believe that developing and posting a notice 
regarding a facility's practices is standard business practice. Thus, 
we have not estimated a cost for those activities.

D. Cost to the Federal Government

    In the 2016 final rule (81 FR 68688 and 68844), we anticipated that 
the initial federal start-up costs for the entire rule would be between 
$10 and $15 million. Once the rule was implemented, improved surveys to 
review the new requirements would require an estimated $15 to $20 
million annually in federal costs. Any costs to federal government 
regarding arbitration requirements were accounted for in the estimates 
set forth in the 2016 final rule. We do not believe that these 
revisions would impose any additional costs.

E. Regulatory Review Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that seventy-five percent (75%) of 
the affected entities will proactively review this proposed rule. We 
acknowledge that this assumption may understate or overstate the costs 
of reviewing this rule. It is possible that not all of those affected 
entities will read this proposed rule, or that there may be more than 
one individual reviewing the rule for some of the affected entities. 
For these reasons we thought that 75 percent of affected entities would 
be a fair estimate of the number of reviewers of this rule. We welcome 
any comments on the approach in estimating the number of entities which 
will review this proposed rule. We also recognize that different types 
of entities are in many cases affected by mutually exclusive sections 
of some proposed rules, or that some entities may not find it necessary 
to fully read each rule, and therefore for the purposes of our estimate 
we assume that each reviewer reads approximately 50 percent of the 
rule. We seek comments on this assumption.
    Using the wage information from the Bureau of Labor Statistics 
(BLS) for medical and health service managers (Code 11-9111), we 
estimate that the cost of reviewing this rule is $90.16 per hour, 
including overhead and fringe benefits https://www.bls.gov/oes/2015/may/naics4_621100.htm. Assuming an average reading speed, we estimate 
that it would take 0.14 hours for the staff to review half of this 
proposed rule. We previously estimated that there were 15,653 LTC 
facilities (81 FR 68832). For each facility that reviews the rule, the 
estimated cost is $12.62 (0.14 hours x $90.16). Therefore, we estimate 
that the total cost of reviewing this regulation is $148,155 ($12.62 x 
15,653*0.75).

[[Page 26653]]

F. Benefits of the Rule

    The proposed revisions in this rule will maintain the requirements 
in the 2016 final rule that provide for transparency in the arbitration 
process for LTC residents. Specifically, we are proposing to maintain 
that the agreement must be explained to the resident or his or her 
representative in a form and manner they understand and that the 
resident acknowledges that he or she understands the agreement. We are 
also proposing to retain the requirement that the agreement must not 
contain any language that prohibits or discourages the resident or 
anyone else from communicating with federal, state, or local officials. 
This proposed rule will also increase transparency by adding a 
requirement that a facility must post a notice regarding its use of 
agreements for binding arbitration in an area that is visible to 
residents and visitors. With this increased transparency, we believe 
that many stakeholder concerns regarding the fairness of arbitration in 
LTC facilities will be addressed. We believe this proposal is 
consistent with our approach to eliminating unnecessary burden on 
providers, and supports the resident's right to make informed choices 
about important aspects of his or her healthcare.

G. Alternatives Considered

    As discussed above, the district court granted a preliminary 
injunction against enforcement of the prohibition against pre-dispute 
agreement for arbitration. The district court's opinion clearly 
indicated that the court questioned CMS' authority to regulate 
arbitration. We considered proposing to remove all of the arbitration 
requirements and return to the position in the previous requirements, 
that is, the requirements would be silent on arbitration. However, we 
believe that transparency between LTC facilities and their residents in 
the arbitration process is essential, and that CMS may properly 
exercise its statutory authority to promote the health and safety of 
LTC residents by requiring appropriate measures to ensure that LTC 
residents receive adequate disclosures of their facility's arbitration 
policies. Removing all of the provisions related to arbitration would 
reduce transparency. Therefore, we have proposed retaining those 
requirements that provide for transparency and adding that the facility 
must post a notice regarding its use of arbitration in an area that is 
visible to residents and visitors. We believe the requirements we are 
proposing to retain, as well as the proposed revisions, will provide 
sufficient transparency to protect residents and alleviate many of the 
residents and advocates concerns about the arbitration process.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget. This 
proposed rule is not expected to lead to an action subject to Executive 
Order 13771 (82 FR 9339, February 3, 2017) because our estimates 
indicate that its finalization would impose no more than de minimis 
costs.

List of Subject in 42 CFR Part 483

    Grant programs-health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

0
1. The authority citation for part 483 continues to read as follows:

    Authority:  Secs. 1102, 1128I, 1819, 1871 and 1919 of the Social 
Security Act (42 U.S.C. 1302, 1320a-7, 1395i, 1395hh and 1396r).

0
2. Section 483.70 is amended by revising paragraph (n) to read as 
follows:


Sec.  483.70  Administration.

* * * * *
    (n) Binding arbitration agreements. If a facility chooses to ask a 
resident or his or her representative to enter into an agreement for 
binding arbitration, the facility must comply with all of the 
requirements in this section.
    (1) The facility must ensure that:
    (i) The agreement for binding arbitration is in plain language. If 
an agreement for binding arbitration is a condition of admission, it 
must be included in plain language in the admission contract;
    (ii) The agreement is explained to the resident and his or her 
representative in a form and manner that he or she understands, 
including in a language the resident and his or her representative 
understands; and
    (iii) The resident acknowledges that he or she understands the 
agreement.
    (2) The agreement must not contain any language that prohibits or 
discourages the 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, in accordance with Sec.  483.10(k).
    (3) When the facility and a resident resolve a dispute through 
arbitration, a copy of the signed agreement for binding arbitration and 
the arbitrator's final decision must be retained by the facility for 5 
years and be available for inspection upon request by CMS or its 
designee.
    (4) A notice regarding the use of agreements for binding 
arbitration must be posted in an area that is visible to residents and 
visitors.
* * * * *

    Dated: May 2, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: May 4, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-11883 Filed 6-5-17; 4:15 pm]
 BILLING CODE 4120-01-P