SCOTUS Balks At Hearing Nursing Home Arbitration Rule Case

The nation’s highest court has declined to weigh in on a case involving a federal arbitration rule that nursing home industry groups argue places “burdensome” requirements on facilities.

The U.S. Supreme Court denied the petition on Monday for a writ of certiorari in the case of Northport Health Services of Arkansas, LLC v. Department of Health and Human Services, et al.

The decision was first reported by Law360 and Bloomberg Law.

In 2019, the Centers for Medicare & Medicaid Services (CMS) finalized a rule allowing nursing homes participating in Medicare and Medicaid to enter into arbitration agreements with residents with certain restrictions in place designed to protect the rights of residents, according to court records.

Specifically, the rule allows residents or their representatives to rescind an arbitration agreement within 30 days of signing, requires that any agreement be fully explained to the resident, it cannot include language that bans residents or their families from contacting state, federal, and local authorities and the facility must keep copies of the signed agreement and any final arbitration decisions for five years.

Facilities that do not comply with such safeguards could be at risk of facing sanctions, including outright exclusion from the Medicare and Medicaid programs.

In other words, the 8th U.S. Circuit Court of Appeals’ decision in October 2021 to green light the federal regulation, and reject the arguments from the nursing homes involved, will remain intact.

The case stems from a September 2019 lawsuit that claimed the regulation was “just as unlawful” as a rule instituted by the Obama administration in 2016 that banned the practice altogether.

The lawsuit specifically alleged the regulation was in direct conflict with a host of federal arbitration laws including the Administrative Procedure Act, the Federal Arbitration Act and the Regulatory Flexibility Act.

The 8th Circuit judges wrote in their October 2021 opinion that “it is reasonable for CMS to conclude that regulating the use of arbitration agreements in LTC facilities furthers the health, safety, and well-being of residents, particularly during the critical stage when a resident is first admitted to a facility.”

The Arkansas Health Care Association filed an amicus curiae brief in June, and the Alabama Nursing Home Association and the Florida Health Care Association had their motion granted to file an amicus brief the same day the petition was denied.

In its “friend of the court brief” the Arkansas Health Care Association argued that the federal rule forces facilities to abandon arbitration which therefore harms its state’s members and other long-term care facilities because litigating claims is more costly.

“Long-term care facilities have limited options for offsetting those costs, too, because they must accept what Medicare and Medicaid are willing to pay and thus cannot raise fees charged for the care that they provide,” the state association wrote. “The anti-arbitration rule thus provides little choice for Arkansas HCA members — they lose no matter what they do under the HHS rule.”