The American Health Care Association filed a lawsuit Monday challenging the legality of the Centers for Medicare & Medicaid Services’ recently issued ban on pre-dispute arbitration agreements in nursing homes. Meanwhile, AHCA’s sister organization, the National Center for Assisted Living, expressed concern that states might follow the lead of the federal government and prohibit the agreements in assisted living.
The ban for nursing homes was part of a final rule issued by CMS on Sept. 29. It is set to go into effect Nov. 28, although AHCA’s complaint seeks to halt enforcement.
The lawsuit maintains that, under the Federal Arbitration Act, arbitration agreements only can be changed by Congress.
“Federal law plainly prohibits CMS from issuing this arbitration regulation,” said Mark Parkinson, AHCA president and CEO. “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.”
In 2015, as the rule was being finalized, AHCA had encouraged NCAL members to submit comments about the rule to CMS, saying that the rule could have indirect, negative implications for assisted living communities if finalized as proposed. Insurers base their rates on whether an assisted living provider uses arbitration agreements, AHCA said at the time, so changes in the use of the agreements in nursing homes would affect rates and accessibility to assisted living providers.
The ban at the federal level also might lead to state-level prohibitions in assisted living, NCAL said.
“Sometimes, states will copy what the federal government does, and that would most certainly be the wrong thing to do here,” Rachel Reeves, NCAL director of communications, told McKnight’s Senior Living on Monday. “It’s an indirect impact CMS’ action could have, but it’s why we and many assisted living providers commented on the rule.”
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