Nursing home arbitration ruling expected by Nov. 7

A Mississippi federal court is expected to rule Nov. 7 on a request by the American Health Care Association that would bar the CMS from implementing a rule that bans arbitration agreements in skilled-nursing facilities.

A federal rulemaking finalized by the Obama administration earlier this year prohibits nursing facilities from entering binding arbitration agreements before a dispute arises. The provision went much further than the restrictions proposed in the draft rule and is expected to kick in on Nov. 28.

The AHCA argued that the rulemaking exceeds the CMS’ statutory authority and is wholly unnecessary to protect the health and safety of residents.

“A preliminary injunction is both appropriate and necessary in this situation,” Mark Parkinson, AHCA President and CEO, said in a statement. “Delaying the implementation of this provision of the rule will allow the court time to examine the legality of the issue.”

The arbitration agreements prevent families who believe their loved ones received bad care at nursing homes from seeking legal recourse. Some families say they often feel pressured to sign the contracts and don’t understand what they’re agreeing to. They also don’t realize that awards through arbitration in nursing home cases are usually lower than those reached in court.

Claims settled in arbitration have benefited nursing home operators. Agreements reached out of court cost about 16% less on average than claims that do not involve arbitration, according to insurance broker Aon Global Risk Consulting.