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American Health Care Association Files Court Challenge to Arbitration Rule  
American Health Care Association Files Court Challenge to Arbitration Rule
CMS Exceeds Statutory Authority by Banning Pre-Dispute Arbitration Agreements in Updated Requirements of Participation
(202) 898-3165

Washington, D.C. — The American Health Care Association (AHCA) today filed a lawsuit against the Department of Health and Human Services challenging the legality of a provision of a recently released regulation. The Requirements of Participation final rule, issued by the Centers for Medicare and Medicaid Services (CMS) on September 29, will prohibit skilled and nursing care facilities from entering into pre-dispute arbitration agreements with residents at their centers, no matter how fair or beneficial those agreements may be to residents.
By filing the suit, the named plaintiffs are seeking to enforce rights under federal law, including the Federal Arbitration Act (FAA), to enter into arbitration agreements. The FAA mandates that arbitration agreements can only be changed by Congress. Congress has repeatedly rejected attempts to regulate or prohibit the use of arbitration agreements between nursing care centers and their residents.
“We are taking this step to stop what is a clear overreach by CMS. Federal law plainly prohibits CMS from issuing this arbitration regulation,” said Mark Parkinson, AHCA President and CEO.  “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 complaint for declaratory and injunctive relief asks that the court find the arbitration provision in the final Requirements of Participation rule unlawful. It goes on to request the courts take action to stop the enforcement of the arbitration portion of the rule after its effective date of November 28, 2016. The complaint was filed in the United States District Court for the Northern District of Mississippi. Plaintiffs include AHCA, the Mississippi Health Care Association, Great Oaks Rehabilitation and Healthcare Center, Heritage House Nursing Center and the Pavilion at Creekwood. 
“We have a strong legal case.  That's why we're asking the courts to have this rule overturned,” said Parkinson.