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U.S. District Court Grants Injunction Staying CMS Ban on Pre-Dispute Binding Arbitration Agreements

On November 7, 2016, the U.S. District Court for the Northern District of Mississippi granted the motion for preliminary injunction filed by the American Health Care Association (AHCA) and other plaintiffs, staying the November 28, 2016 effective date of the ban on pre-dispute binding arbitration agreements imposed by the Centers for Medicare & Medicaid Services (CMS). CMS has the right to appeal the District Court's decision to the Fifth Circuit Court of Appeals. At this point in time, we have not had confirmation as to whether CMS will invoke its right to an appellate court review of the District Court's ruling.

As of now, CMS is enjoined from enforcing its pre-dispute binding arbitration ban. As such, nursing facilities that have a pre-dispute binding arbitration clause within their admission agreement may continue to use their admission agreement as it is currently written. Similarly, facilities that utilize a separate stand-alone binding arbitration agreement may continue its use on November 28, 2016.

If CMS files an appeal, we will provide an updated blog post regarding such a development. If you have any questions related to this matter, please contact Kimber L. Latsha, Esq. or Dayna E. Mancuso, Esq. at (717) 620-2424.

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