CMS Final Rule Prohibiting Nursing Home Use of Arbitration Agreements Put On Hold

Contributed by Danielle L. Dietrich

This morning, U.S. District Court Judge Michael P. Mills granted a preliminary injunction in the U.S. District Court for the Northern District of Mississippi, putting on hold the looming November 28, 2016 deadline that would prevent nursing homes from entering into pre-incident arbitration agreements with residents.  The lawsuit was filed by the American Health Care Association, a national nursing home trade group.

The rule, which I covered in my previous blog post (http://www.tuckerlaw.com/2016/10/04/cms-prohibits-long-term-care-facilities-using-arbitration-agreements-intake-prior-disputes/)  essentially provided that a nursing home that accepts Medicare or Medicaid could not put arbitration clauses or agreements in new resident agreements, or enter into arbitration agreements with residents at any time prior to an incident.

The court issued a 40-page opinion (a copy of the opinion can be found here: https://consumermediallc.files.wordpress.com/2016/11/nursingarbinj.pdf ) supporting the granting of the preliminary injunction.

Within its detailed analysis, the court notes the “powerful persuasive authority” cited by the American Health Care Association regarding the application of the Federal Arbitration Act to the CMS Final Rule.  It also recognized the virtual certainty that nursing homes throughout the country will suffer irreparable harm if the Rule were to go into effect on November 28, 2016.

Please feel free to contact our firm to discuss how this new development may affect your facility.

Danielle Dietrich is a long term care and litigation attorney in Tucker Arensberg’s Long Term Care Practice Group. She is licensed to practice law in Pennsylvania, Ohio and West Virginia.  Danielle can be reached via email: ddietrich@tuckerlaw.com, telephone: 412-594-5605 or on Twitter at @DLDietrich.