Federal Judge Erred in Blocking Nursing Home Arbitration Rule

Nov. 7, 2016

Federal Judge Erred in Blocking Nursing Home Arbitration Rule

Statement of Robert Weissman, President, Public Citizen

Note: The United States District Court for the Northern District of Mississippi today issued an order preliminarily blocking enforcement of the Centers for Medicare & Medicaid Services’ rule barring the use of pre-dispute arbitration agreements by nursing homes. Forced arbitration clauses are buried in the fine print and require signers – in this case, nursing home residents and their families – to give up their right to go to court to hold corporate wrongdoers accountable. Public Citizen pushed for the rule.

In his decision, Judge Michael Mills explained in detail why the Centers for Medicare & Medicaid Services (CMS) was right to ban forced arbitration provisions in contracts with nursing homes receiving federal funds. These forced arbitration provisions prevent victims of nursing home misconduct from suing in court, obtaining meaningful discovery and receiving appropriate remedial compensation. In so doing, the forced arbitration provisions make misconduct far more likely and undermine nursing homes’ incentives to maintain appropriate staffing levels and adopt appropriate supervisory controls.

Judge Mills erred in his finding that CMS likely lacks legal authority to issue its rule banning forced arbitration provisions in contracts with nursing homes receiving federal funds. His ruling should be overturned on appeal.

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