On June 2, 2017, CMS filed a motion to dismiss its appeal to the U.S. Circuit Court for the Fifth Circuit of a U.S. District Court decision blocking the agency’s ban on mandatory nursing home arbitration. CMS’s motion did not provide an explanation. However, since the request for appeal was filed under the Obama Administration, it appears that the motion for dismissal reflects a difference in policy positions between the Administrations. CMS’s proposed policy going forward is likely set forth in its draft proposed rule addressing mandatory nursing home arbitration agreements, which has been under review at the Office of Management and Budget since April this year.
As reported previously, CMS proposed to address mandatory nursing home arbitration agreements in response to concerns that patients’ consent to arbitration is not fully informed or voluntary. The proposal was included in a broader July 2015 rule to reform the requirements for long term care facilities that participate in Medicare or Medicaid. In October 2016, CMS published a final rule, prohibiting long term care facilities that participate in Medicare or Medicaid from entering into a pre-dispute agreement for binding arbitration with any resident or resident’s representative or require that a resident sign an arbitration agreement as a condition of admission to the facility.
The applicable regulations were set to take effect on November 28, 2016, but the American Health Care Association (AHCA) – an industry group that represents most nursing homes in the U.S. – filed a lawsuit requesting that CMS’s rule be blocked. AHCA argued that CMS exceeded its authority in promulgating the rule and that the rule was preempted by the Federal Arbitration Act. The U.S. District Court for the Northern District of Mississippi agreed and issued a preliminary injunction, barring CMS from implementing the prohibition on mandatory arbitration agreements.
On January 5, 2017, CMS filed a Notice of Appeal with the Fifth Circuit. However, it was not clear whether the incoming Administration would continue to pursue the appeal. Following the transition in Administrations, CMS requested additional time to file an opening brief. Ultimately, the brief filing deadline, CMS filed a motion to dismiss the appeal, and the Fifth Circuit granted the motion. The case remains active at the District Court, which halted the case in January, pending a decision on the interlocutory appeal.
