A temporary reprieve?

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A new federal rule that would have disallowed arbitration agreements during resident admissions has been put on hold, at least for now.

At press time, a federal court granted the American Health Care Association's motion to stop the ban from beginning in late November. Attorneys for the 13,000-member provider organization argued the reprieve was “appropriate and necessary” to protect senior living operators while the court hashed out related legal issues.

Judge Michael P. Mills of the U.S. District Court for the Northern District of Mississippi said the case puts the court in an “undesirable position,” since it believes the ban is “based upon sound public policy.” But ultimately, Mills said, the case provokes in-depth legal questions about the Centers for Medicare & Medicaid Services' authority. This needs to be addressed before the rule can take effect, he wrote.

“As sympathetic as this court may be to the public policy considerations which motivated the rule, it is unwilling to play a role in countenancing the incremental ‘creep' of federal agency authority beyond that envisioned by the U.S. Constitution,” Mills wrote.

AHCA/NCAL President and CEO Mark Parkinson said the association is “pleased with the outcome” of its motion, as actual implementation could have caused “real harm to providers as well as to our residents.”

But the victory may be short-lived. The court's decision notes that CMS could show that it had the authority to ban the agreements, something it has failed to do so far. It is not known how much the agency might benefit from the court's decision, which expressed sympathy with the public policy considerations, such as the potentially stressful nature of nursing home admissions, which partially motivated the ban.

“The court has actually said that they agree wholeheartedly with the principle behind [a ban on pre-dispute arbitration],” Mario C. Giannettino, a partner at law firm Kaufman Borgeest & Ryan LLP, told McKnight's. Giannettino specializes in the defense of long-term care providers.

Pro-consumer groups lashed out against the decision. Sen. Al Franken (D-MN) said that he was “disappointed” by the judge's ruling but that he remains “hopeful that we can get this rule implemented.”

Franken was one of 34 Democrats who called for an outright ban on arbitration agreements

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