by Karl Steinberg, MD, CMD, HMDC

On November 7, 2016, a Mississippi federal district court issued a temporary injunction that will prohibit the Centers for Medicare and Medicaid Services (CMS) from enforcing the provision in the new nursing home regulations that would bar facilities from using pre-litigation arbitration agreements in any form.  The case, entitled AHCA et al. v. Burwell, was brought by the American Health Care Association and its Mississippi chapter, challenging this new regulation as essentially being an overreach by CMS, and the judge in this case agreed.  Essentially, the Court suggests that if arbitration agreements are felt to be inappropriate because it deprives people from their right to a jury trial, then a law should be passed through Congress, not via regulation.

It is unclear what the final outcome will be when the parties actually argue their cases, but for now nursing homes may continue to utilize these agreements if they want to.  There are a number of perennial issues around these agreements, and it is common when a patient or family has a claim against a nursing home for their attorney to contest the validity of the arbitration agreements on multiple grounds.  First, it is often stated that the patient lacked the ability to understand what the arbitration agreement actually meant at the time it was signed.  Second, often family members are asked to sign these forms (similar to how in some facilities POLST forms are signed by family members even when the resident is fully aware, which is inappropriate), and most often do not have any legal standing to sign a legal document or contract on the part of their loved one.  

Arbitration is generally considered a less expensive and more expedient way to resolve claims against a nursing home (or other types of legal actions), and perhaps favors the defense slightly--at least with respect to being less likely to result in emotion-based multi-million dollar awards, but still seems to work reasonably well most of the time.  Arbitration usually involves a single arbitrator, often a retired judge, or a panel of three arbitrators (one chosen by plaintiff, one chosen by defense, and one mutually agreed on), and can also be rather expensive, but is a less formal procedure than a court trial.  

CALTCM will continue to monitor this case and keep our members apprised of its status.  In the meantime, many of the other provisions of the new Final Rule ("Mega-Rule") of the Requirements of Participation (RoPs) for nursing homes will go into effect on November 28, 2016, with more to follow one year later and three years later.  For more information on the Mega-Rule, check out AMDA's webinar on November 15, 2016.  http://www.paltc.org/live-webinar-requirements-participation