Dive Brief:
- CMS has been blocked from implementing its recently announced rule, set to go into effect Nov. 28, that would have disallowed nursing homes from requiring residents to agree to settle disputes by arbitration rather than a lawsuit.
- Federal judge Michael Mills agreed with the legal challenge from the American Health Care Association (AHCA), which argued the CMS was overstepping its authority and the rule would violate the Federal Arbitration Act.
- Mills' opinion suggested nursing home arbitration contracts may indeed be an issue that need addressing, but that the appropriate avenue is through legislative action by Congress.
Dive Insight:
The ban, announced in September, came as part of a larger policy overhaul aimed at improving care, safety and consumer protections for residents of long-term care facilities, first proposed in 2015 as part of the White House Conference on Aging.
The CMS received nearly 10,000 comments on the issue as well as a letter from 27 members of Congress asking the agency to prohibit forced arbitration clauses in nursing home agreements.
The clauses have been controversial because opponents say they take away transparency around issues of abuse and neglect, impacting residents' rights and ability to hold facilities accountable, while also hiding such issues from the public and prospective future residents.
The AHCA filed its challenge shortly after the final rule was announced, and stated Monday that it was pleased with the outcome.
With the implementation delayed, the future of the ban now remains in question.
"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," said AHCA President and CEO Mark Parkinson in a prepared statement. "We believe federal law plainly prohibits CMS from issuing this arbitration regulation, and this injunction will halt implementation of the final rule until the court can consider the merits of the case.”