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Federal Rule Resolves Dispute in Virginia Regarding Arbitration Clauses in Nursing Home Contracts

August 5, 2020

On September 28, 2016, The Centers for Medicare and Medicaid Services, part of the federal Health and Human Services Department, issued a rule prohibiting the use of pre-dispute binding arbitration agreements for long-term care facilities that accept federal money.  Since virtually every nursing home facility participates in Medicare and Medicaid, the new rule has essentially resolved the long-standing split in Virginia courts regarding the clauses.  Prior to this new development, the closest Virginia has come to a resolution was when the Supreme Court of Virginia agreed to hear an appeal on the issue in 2010; however, that case settled before the Court made a ruling.

The long-term care/nursing home industry is considering challenging the ruling as overreaching; however, for now, the rule stands.