A nursing home advocacy group has filed a lawsuit challenging the legality of the Centers for Medicare and Medicaid Services' (CMS) new rule prohibiting binding pre-dispute arbitration agreements in nursing facilities. The lawsuit claims the rule violates the Federal Arbitration Act as well as exceeds CMS's authority under federal Medicaid law.
In a surprise move, in September 2016 CMS issued a final rule prohibiting pre-dispute arbitration agreements in nursing facilities that accept Medicare and Medicaid patients. After a dispute arises, the resident and the long-term care facility could still voluntarily enter into a binding arbitration agreement if both parties agree. The rule is scheduled to take affect November 28, 2016.
The American Health Care Association, a group representing non-profit and for-profit nursing facility and assisted living care providers, filed the lawsuit against the Department of Health and Human Services in federal court in Mississippi. The lawsuit argues that Congress has not given CMS the authority to regulate the use of arbitration, and the suit seeks a preliminary injunction preventing enforcement of the new rule pending the court’s final judgment in the case.
"We are taking this step to stop what is a clear overreach by CMS. Federal law plainly prohibits CMS from issuing this arbitration regulation," said Mark Parkinson, AHCA President and CEO in a statement. "The merits of allowing individuals in our centers and their families this legal remedy are clear: study after study shows that arbitration is fair and speeds judgments in a cost-effective manner that benefits those injured more than anyone else."
To read the complaint, click here.