elderly


Protecting Our Elders? Or Protecting Big Medicine? Federal Court Blocks Agency Rule Banning Pre-Dispute Arbitration Agreements in Nursing Homes

By: Pamela A. Lee, Esquire
       plee@dioriosereni.com

In September, the Centers for Medicare & Medicaid Services (“CMS”)-a federal agency that controls Medicare and Medicaid funding-announced comprehensive revisions to the federal nursing home regulations, including a ban on pre-dispute arbitration agreements.

The new rule banning pre-dispute arbitration agreements-along with most of the new rules-was scheduled to take effect earlier this week. The rule banning pre-dispute arbitration agreements meant that any nursing home that receives federal funding would be banned from requiring its residents in advance to resolve their future unknown disputes in arbitration instead of court. Disputes include nursing home abuse and neglect.

On November 7, 2016, a federal district court in Mississippi issued an injunction stopping CMS from enforcing its new rule banning pre-dispute arbitration agreements.   American Health Care Association-a group representing nursing homes-filed the lawsuit against CMS seeking the injunction.

The court asserted that CMS-a federal agency-is “seeking to engage in a rather unprecedented exercise of agency power…which raises serious concerns under both the [Federal Arbitrations Act] and under general separation of powers principles.” The court also asserted that the rule likely violates the Regulatory Flexibility Act, which requires agency rules to contain a description of the steps an agency took to minimize the significant economic impact on small entities. CMS disputed these assertions.

Arbitration is a form of alternative dispute resolution in which the parties agree to resolve their dispute in a private proceeding before an arbitrator without litigating in court before a jury of your peers. So if a dispute later arises, a nursing home arbitration agreement tries to prohibit you from suing the nursing home in court before a jury and instead force you to go through the arbitration process. Unfortunately, the arbitrator’s decision will most likely be your final recourse, which means you will not be allowed to appeal to a court if you believe the decision was wrong or unfair.

If you’re presented with a proposed nursing home arbitration agreement, you should always first seek the advice of an attorney before signing it. And if you’ve already signed one and now have a legal dispute with the nursing home but are being told that it must go to arbitration, you should still seek the advice of an attorney – because an attorney’s review may reveal that it’s not legally enforceable and that you therefore have other legal recourses, such as a right to trial by jury.

The attorneys at the Law Firm of DiOrio & Sereni, LLP are experienced and available to help you. Please contact Pamela A. Lee, Esquire at the Law Firm of DiOrio & Sereni, LLP at 610-565-5700 or email her at plee@dioriosereni.com.
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