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 House Bill to Curb Pre-Dispute Arbitration Draws Criticism from LT/PAC Providers

A bill approved recently in the House to amend the Federal Arbitration Act so that “no pre-dispute arbitration agreement” will be valid for consumer, employment, or civil rights conflicts has drawn criticism from the long term and post-acute care profession, which says such agreements have been a staple for many health care providers over the years.

First, the House on Sept. 20 approved H.R. 1423, the “Forced Arbitration Injustice Repeal Act” (FAIR Act) by a 225-186 vote. The Democratic-led chamber moved the bill while a companion Senate bill (S. 610) has languished in the Senate Judiciary Committee since its introduction in February 2019.

In reaction to the House vote, Clifton Porter, II, senior vice president of government relations for the American Health Care Association, says the association does not support any legislation that aims to ban the use of pre-dispute arbitration agreements. 

“Banning arbitration agreements would eliminate a fair and efficient legal remedy that provides benefits to patients and providers,” he says. “Skilled nursing facilities are just one of many health care providers that use pre-dispute arbitration. Residents with legitimate claims are awarded reasonable damages, oftentimes equal to the amount that would be awarded under litigation.”

AHCA, Porter added, “strongly opposes efforts to ban this long-used, effective procedure for residents and families to pursue legal recourse.”

Just recently, AHCA noted that new arbitration regulations (CMS 3342-F) released earlier in the summer by the Centers for Medicare & Medicaid Services (CMS) went into effect on Sept. 16 despite legal actions concerning the final CMS rule.

When CMS released the final arbitration rule on July 16, AHCA applauded the agency for allowing skilled nursing centers to use pre-dispute arbitration agreements, which were banned by the Obama administration in 2016.

But, when the rule came out AHCA President and Chief Executive Officer Mark Parkinson said the skilled nursing profession is “concerned about CMS adding any conditions or administrative requirements when Congress has spoken on the subject.”

Pre-dispute binding arbitration agreements are arrangements in which two parties agree to settle future disputes through an arbitration process rather than through litigation. The agreements also require that both parties accept the arbitration process’ outcome.

Ahead of the House vote on Sept. 20, the White House issued a policy statement in opposition to H.R. 1423 and threatened a veto if the bill ever reached the president’s desk. In part, the statement said the legislation “disregards the benefits of resolving disputes through arbitration, including lower costs, faster resolution, and reduced burden on the judiciary” and that “[b]y limiting contractual options, the bill would hurt businesses and the very consumers and employees it seeks to protect.”  
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