Reversing the Ban on Nursing Home Arbitration Agreements
Recent events make implementation of the rule even less likely. A few weeks ago, CMS submitted a proposal to revise the rule banning arbitration clauses in nursing home contracts. Recently, the White House Office of Management and Budget (OMB) met with long-term care groups and CMS to discuss the proposed rule revision. No word yet on what the revision will encompass, but during the meeting CMS seemed to be in favor of arbitration—an extreme reversal in course from the finalized rule that completely barred arbitration agreements. The OMB has 90 days to respond to the proposed rule revision submitted by CMS.
The United States Supreme Court issued yet another stunning blow to the plaintiffs’ bar on May 15, 2017, when it ruled that a nursing home can enforce arbitration agreements signed by persons with appropriate power of attorney over nursing home residents in the consolidated cases of Kindred Nursing Centers v. Clark et al., discussed at length here. Needless to say, the battle over the nursing home arbitration agreement is far from over and the plaintiffs’ bar is not likely to retreat from the recent regulatory and judicial setbacks. Expect to see more claims seeking to strike arbitration agreements based on the language of the power of attorney, the competency of nursing home residents at the time the power of attorney was executed, and novel arguments aimed at defeating Federal Arbitration Act preemption.
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