Around the Country: Arbitration Agreement Ban Appeal Withdrawn

As you may be aware, the CMS rule against arbitration was halted by an injunction last year. CMS appealed the district court’s ruling and it seemed it would be a hard-fought battle regarding the arbitration rule. However, CMS recently withdrew the appeal. 

On June 5, 2017, CMS proposed a revised rule, which removes the prohibition on pre-dispute arbitration agreements. This proposed rule is likely in response to the United States Supreme Court’s ruling in Kindred Nursing Centers v. Clark, which struck down a rule by the Kentucky Supreme Court. The Kentucky court's ruling singled out arbitration agreements for disfavored treatment in violation of the Federal Arbitration Act. The proposed rule permits voluntary pre-dispute arbitration agreements if the agreements comply with certain requirements, such as that the agreement be written in plain language and that it must be explained to the resident or representative, along with other requirements, which are already required by most state courts. Therefore, nursing homes should be able to continue the use of arbitration agreements signed at the time of admission.

Rebecca Adelman