Judge Preserves Long-Term Care Arbitration Agreements—For Now

Medicare-certified long-term care providers can continue to use arbitration agreements for the moment, thanks to a federal court ruling.

Residents who sign arbitration agreements when they are admitted to skilled nursing facilities (SNFs) waive their right to use the court system in the event a dispute arises, and instead go through private arbitration. Consumer advocacy groups have blasted this practice as robbing seniors and their families of their legal rights. But providers say they are a way of more speedily resolving conflicts and that mounting legal costs would beset them if arbitration agreements are banned. This would be the case under a final rule issued in September by the Centers for Medicare & Medicaid Services (CMS).

The American Health Care Association (AHCA), the nation’s largest association of skilled nursing providers, challenged CMS in court. The agency overstepped its authority by banning arbitration agreements, the suit argues. AHCA asked the court for an injunction to prevent the ban from taking effect as planned on November 28.

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On Monday, a federal district court in Mississippi granted that injunction. The move by CMS may be an example of the “incremental ‘creep’ of federal agency authority,” the ruling stated. However, it also stated that “nursing home arbitration litigation suffers from fundamental defects.”

The ban now will not take effect until the lawsuit is settled.

“We are pleased with the outcome of this ruling,” stated AHCA President and CEO Mark Parkinson. “The court agreed with our argument that imposing a November 28 implementation would have resulted in real harm to providers as well as to our residents.”

The American Association for Justice, an organization on the other side of this issue, also weighed in.

“We remain confident that CMS has clearly acted within its existing legal authority, and look forward to the full implementation of this rule, which ensures that nursing home residents retain access to the courts and that resident abuse is not left unchecked,” stated American Association for Justice President Julie Braman Kane.

Written by Tim Mullaney

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