The American Health Care Association on Monday filed a lawsuit challenging part of a Centers for Medicare and Medicaid Services regulation that would ban nursing homes from entering arbitration agreements.
The organization, along with four long-term care providers, filed the lawsuit against Health and Human Services Secretary Sylvia Burwell and Acting Administrator of the Centers for Medicare and Medicaid Services Andy Slavitt. The plaintiffs say the regulation, which CMS finalized last month, goes too far in prohibiting skilled and nursing care facilities from entering into pre-dispute arbitration agreements with residents. The regulation also oversteps the Federal Arbitration Act, which mandates that arbitration agreements can only be changed by Congress, they say.
“The merits of allowing individuals in our centers and their families this legal remedy are clear: study after study shows that arbitration is fair and speeds judgments in a cost-effective manner that benefits those injured more than anyone else,” AHCA President and CEO Mark Parkinson said in a statement.
CMS last month finalized a rule barring nursing homes that receive federal funding from requiring residents to settle lawsuits through arbitration.
The plaintiffs filed the case in the U.S. District Court for the Northern District of Mississippi. They are requesting the Court stop the enforcement of the arbitration clause ahead of Nov. 28, when it would take effect.