Rule Barring Pre-Arbitration Clauses in Nursing Home Contracts Put on Hold

We previously reported on the new rule that the Centers for Medicare & Medicaid Services (CMS) was poised to implement regarding a common clause in nursing home contracts that makes lawsuits against nursing homes more difficult. The federal mandate prohibited nursing homes that entered into contracts with residents that contain a binding arbitration clause from receiving any federal funds. CMS enacted this rule to provide further protections for nursing home residents in terms of their ability to go to court for relief if injured as a result of the negligent or otherwise harmful actions of a nursing home or its staff. In other words, CMS sought to ease the process of abused or neglected nursing home residents getting justice from nursing homes.

In response to the new CMS rule, several nursing home groups, including the American Health Care Association, filed suit in the U.S. District Court for the Northern District of Mississippi, arguing that not only was the rule unnecessary, but that CMS exceeded its statutory authority in enacting the rule. According to the nursing home groups, all nursing homes do not require an arbitration clause of their residents; rather, they allow the resident to opt out of the provision if they so choose. Although Judge Michael P. Mills acknowledged the sound public policy underlying the CMS rule, he nonetheless issued an order blocking the rule from going into effect, agreeing with the nursing home groups that CMS had no statutory authority to issue the rule. Mills also indicated that, as a result, Congress should consider enacting a federal law banning pre-dispute arbitration clauses in nursing home contracts. It is estimated that as many as 50% of nursing homes require contracts with pre-dispute arbitration clauses.

The nursing home abuse lawyers of Boller & Vaughan pride themselves on advocating on behalf of clients who have been injured in some way, no matter what type of incident may have led to their injuries. We can seek compensation for you through the legal claim process, while you and your family can concentrate on healing, recovering from any trauma that you might have experienced, and moving on with your life. Don’t hesitate to call our office today and learn how we can help.


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