A federal judge in Oxford, Mississippi, heard oral argument today in the case of AHCA v. Burwell. The case – filed by the American Healthcare Association (AHCA) three weeks ago – has been closely followed because of its potential impact on the long term care industry. At issue is the enforceability of CMS's new regulation banning the use of pre-dispute arbitration agreements between residents and long term care facilities that participate in the Medicare/Medicaid program. At the hearing, AHCA asked the court for an injunction to stop the government from enforcing the new regulation until the court can decide if the regulation is valid. The regulation is scheduled to go into effect on November 28, 2016.

At the hearing, the parties made their arguments for and against the injunction before Judge Michael P. Mills in the United States District Court for the Northern District of Mississippi. Judge Mills asked no questions of either party at the hearing. Counsel for AHCA argued that CMS exceeded the authority provided to it by Congress by adopting a regulation which overrides the Federal Arbitration Act, which favors arbitration as a mechanism for dispute resolution. In response, the government argued generally that all nursing home residents are in favor of the government's position and that it was CMS's duty to protect the health and well-being of residents at long term care facilities. According to the government, the regulation is a reasonable action taken by CMS within its power to protect nursing home residents.

We expect a ruling on the restraining order as early as Monday, November 7, 2016. We will continue to monitor this matter closely and provide updates as new information becomes available.