AHCA Files Lawsuit Challenging Ban on Predispute Arbitration Agreements

October 21, 2016 | Aging Services Risk, Quality, & Safety Guidance

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​The American Health Care Association (AHCA), along with other plaintiffs, has filed a lawsuit against the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services (CMS), challenging the agencies' statutory authority to ban predispute arbitration agreements in nursing homes, according to an October 17, 2016, AHCA press release. Under a recently issued final rule, facilities that receive federal funding may not enter into agreements for binding arbitration with residents or their representatives before a dispute arises between the parties (see the October 7, 2016, Issues in Continuing Care Risk Management). Filed in the U.S. District Court for the Northern District of Mississippi, the complaint argues that the provision prohibiting arbitration violates the Federal Arbitration Act or, alternatively, is "arbitrary and capricious—and thus unlawful."

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