On November 7, 2016, a federal court granted preliminary injunction against the Center for Medicare and Medicaid Services (“CMS”) enforcing its new regulation that effectively bars “nursing homes receiving federal funds from entering into new pre-dispute arbitration agreements with their residents, effective November 28, 2016.” The nursing facility case is American Health Care Ass’n v. Burwell, No. 3:16-CV-00233 (N.D. Miss. Nov. 7, 2016).

Nonetheless, the conclusion in the 40-page Order of United State District Court Judge Michael P. Mills of the Oxford Division expressed sympathy for prohibiting pre-dispute arbitration agreements that foreclose medical malpractice lawsuits in nursing home cases:

This case places this court in the undesirable position of preliminary enjoining a Rule which is believes to be based upon sound public policy. As discussed in section I of this order, this court believes that nursing home arbitration litigation suffers from fundamental defects originating in the mental competency issues, rendering it an inefficient and wasteful form of litigation. This court believes that Congress might reasonably consider this inefficiency, as well as the extreme stress many nursing home residents and their families are under during the admissions process, as sufficient reason to decide that arbitration and the nursing home admissions process do not belong together.

Id. at 39. Presumably, the Defendants (the Secretary of Health and Human Services and the Administrator of the Centers for Medicare and Medicaid Services) will appeal American Health Care Ass’n to the United States Court of Appeals for the Fifth Circuit – or will the new Trump Administration weigh into the contrary?!