A judge in the U.S. District Court for the Northern District of Mississippi has granted a request by the American Health Care Association to bar the CMS from implementing a rule that bans arbitration agreements in skilled-nursing facilities.
A federal rule finalized by the Obama administration earlier this year prohibits nursing facilities from entering binding arbitration agreements before a dispute arises. The provision went much further than the restrictions proposed in the draft rule and is expected to kick in on Nov. 28.
The AHCA argued that the rule exceeds the CMS' statutory authority and is wholly unnecessary to protect the health and safety of residents.
In a 40 page-decision released Monday, Judge Michael Mills said he agreed.
“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.
Throughout the opinion, Mills reiterated that while there may truly be a problem with executing arbitration contracts during the nursing home admissions, only Congress, not the CMS, can do something about it.
“While there is undoubtedly a great deal of congressional gridlock, Congress' failure to enact positive legislation should not serve as an excuse for the executive branch to assume powers which are properly reserved for the legislative branch,” Mills said.
Arbitration agreements prevent families who believe their loved ones received bad care at nursing homes from seeking legal recourse. Some families say they often feel pressured to sign the contracts and don't understand what they're agreeing to. They also don't know that awards through arbitration in nursing home cases are usually lower than those reached in court.
AHCA President and CEO Mark Parkinson said in a comment that the decision was beneficial to the industry and patients.
A CMS spokesperson did not immediately return a request for comment.