The Off-Again, On-Again Limits on Arbitration Clauses in Nursing HomeAdmission Agreements

The Off-Again, On-Again Limits on Arbitration Clauses in Nursing Home
Admission Agreements

      There is in Kentucky a famous case dealing with the enforceability (or not) of an agreement to arbitrate disputes arising out of residency in a nursing facility. The name of that case, Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012), brings to mind the back-and-forth nature of a ping-pong match. This is a worthy analogy for certain recent developments in arbitration law.

      Earlier this year, the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services issued a rule that barred nursing homes from requiring patients to agree to arbitrate claims. As such, any patient claims would be resolved by lawsuits filed in court. While arbitration clauses pre-existing the regulation’s effective date (Nov. 28, 2016) would remain in effect and be enforceable, from the effective date of the rule, they could not be put in place.

        The rule is not long-lived. On November 7 a federal district court in Mississippi issued an injunction barring the enforcement of the new rule. But for this injunction, it would have gone in effect on November 28. Therefore, at least for the time being, nursing homes that receive either Medicare or Medicaid reimbursement (and there are very few that do not), may continue to include arbitration clauses in their admission documents.