Court Enjoins CMS’s Ban on Arbitration Agreements

November 7, 2016

 

In the earlier publication CMS Final Rule Prohibits Pre-Dispute Arbitration Agreements at Long Term Care Facilities, we noted that the Centers for Medicare & Medicaid Services (CMS), an agency within the Health and Human Services Department, issued a final rule on September 28, 2016 that (among many other changes; see New LTC Regulations – Summary of Implementation Mandates) prohibited the use of binding pre-dispute arbitration agreements by long term care facilities. The arbitration agreement ban was scheduled to go into effect on November 28, 2016.

However, shortly after CMS’s final rule was published, the American Health Care Association (AHCA), the nation’s largest association of long term care providers, filed a lawsuit in federal district court seeking a judicial declaration that the arbitration rule was invalid and should be enjoined.

On November 7, 2016, the federal district court for the Northern District of Mississippi issued a preliminary injunction enjoining the federal agencies from enforcing the ban on pre-dispute arbitration agreements.