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U.S. Supreme Court Enforces LTC Arbitration Agreement

May 25, 2017

 

The United States Supreme Court issued its opinion on the enforceability of arbitration agreements in the long term care setting in Kindred Nursing Centers v. Clark.  The majority held that mandatory arbitration agreements are enforceable even when an individual with a Power of Attorney binds someone else to a mandatory arbitration agreement.

 

Importantly, the Court stated that defenses against a contract should not be used by parties or applied by lower courts in a way that disfavors arbitration agreements.  Recently the Center for Medicare and Medicaid Services (CMS) as attempted to implement a rule effectively barring nursing homes receiving federal funding from entering into new pre-dispute arbitration agreements with residents effective November 28, 2016.  The American Health Care Association and others sought an injunction to prevent this action in the United States District Court for the Northern District of Mississippi.  District Court Judge Michael P. Mills enjoined the CMS action.  Given the U.S. Supreme Court ruling in Kindred, future attempts by CMS to preclude arbitration are less likely.

 

 

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