CMS sued over long-term care rule

The top trade group representing long-term care facilities is suing CMS for its new rule banning mandatory arbitration agreements in cases of patient harm.

The American Health Care Association (AHCA) had hinted at legal action when the final rule was released in September. Under the regulation, facilities could no longer require patients to sign binding arbitration agreements before being admitted, which would prevent them or their families from suing facilities if they believe a patient had been mistreated.

The AHCA argued only Congress has the authority to make such a change.

“We are taking this step to stop what is a clear overreach by CMS. Federal law plainly prohibits CMS from issuing this arbitration regulation,” AHCA President and CEO Mark Parkinson said in a statement. “The merits of allowing individuals in our centers and their families this legal remedy are clear: study after study shows that arbitration is fair and speeds judgments in a cost-effective manner that benefits those injured more than anyone else.”

The AHCA’s own 2009 study found arbitration leads to smaller awards to patients, on average 35 percent lower than in courts.

The ban wouldn’t apply to existing agreements. It would into effect Nov. 28, though the lawsuit asked for quick legal action to block that portion of the rule from being enforced.

Joining AHCA as plaintiffs are the Mississippi Health Care Association, Great Oaks Rehabilitation and Healthcare Center, Heritage House Nursing Center and the Pavilion at Creekwood. The lawsuit was filed in the U.S. District Court for the Northern District of Mississippi.