Effective November 28, 2016, the Centers for Medicare & Medicaid Services (CMS) has issued a regulation prohibiting nursing homes from using pre-dispute binding arbitration agreements. The Regulation also prohibit nursing homes from entering into an agreement for binding arbitration with a resident or the resident’s representative until a dispute arises between the parties.
Under the provision, a facility may not require a resident or a resident’s representative to sign an arbitration agreement as a condition of admission to the facility. If, after a dispute arises, a facility chooses to ask a resident or his or her representative to enter into a binding arbitration agreement, the facility must comply with all of the requirements in the regulations. These requirements include, inter alia, that:
- the agreement must be explained to the resident,
- the agreement must be entered into voluntarily, and
- the agreement must provide for the selection of a neutral arbitrator agreed upon by both parties.
- the resident’s continuing right to remain in the facility must not be contingent upon the resident or the resident’s representative signing the binding arbitration agreement.
CMS, an agency of the Department of Health and Human Services, issued the regulation on October 4, 2016. Click here to read the entire regulation.
On Wednesday, September 28, 2016, the Pennsylvania Supreme Court ruled that the Federal Arbitration Act (FAA), 9 U.S.C. §2, preempts Pa.R.Civ.P. 2013(e), which requires consolidation of survival and wrongful death actions for trial. Consequently, the Court held that plaintiffs’ wrongful death and survival actions must be bifurcated, and that the survival action must proceed to arbitration under the FAA.
The decision in Taylor v. Extendicare
addresses the interaction between the FAA and arbitration agreements, but declines to apply the FAA’s “savings clause,” which permits courts to refuse to enforce agreements to arbitrate under state laws that “arose to govern issues concerning the validity, revocability, and enforceability of contracts generally.” In reversing the Superior Court and the trial court, the majority, in an Opinion by Justice Wecht, noted that the U.S. “Supreme Court has limited the role of state courts to regulating contracts to arbitrate under general contract law principles in accord with the savings clause, under which it has held that only ‘generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements without contravening [the FAA].’” Justices Saylor, Baer and Dougherty joined in the opinion, with Chief Justice Saylor filing a concurring opinion in which Justice Baer joined.
Justice Donohue filed a dissenting opinion in which Justice Todd joined. Justice Donohue noted that it was “incorrect to focus the analysis on the dispensability of Pennsylvania Rule of Civil Procedure 213(e) under the pressure of the herculean FAA. Instead, the pinpoint question [was] whether the FAA can divest wrongful death heirs of their statutorily created right to bring a wrongful death action in this Commonwealth. Because 42 Pa.C.S.A. § 8301 (the “Wrongful Death Act”) preconditions the maintenance of heirs’ claims on their joinder with any claim pursuant to 42 Pa.C.S.A. § 8302 (the “Survival Act”), severance defeats the heirs’ right to recover under the statutorily created cause of action. Although the Majority may be correct in its apocalyptic recitation of existing United States Supreme Court precedent, the FAA does not and cannot deprive a citizen of this Commonwealth of the right to pursue a cause of action.”
The September 28, 2016 issue of the Legal Intelligencer, the daily newspaper of the Philadelphia legal community, features comments by Havertown Attorney Dan Siegel. The article, “Rule Change Allows New Retirement Route for Solos,” discusses the amendments to Pennsylvania Rule of Professional Conduct 1.17, which regulates the manner in which attorneys may sell all or a portion of their law practices.
Previously, Rule 1.17 drastically limited the ways solo attorneys could sell their practices. Siegel, who is the author of Changing Law Firms: Ethical Guidance for Pennsylvania Law Firms and Attorneys, Second Edition, regularly represents attorneys who are impacted by this Rule. The article notes that Siegel “has been advocating for a change in the rules ‘for some time.'” The article also quotes Siegel, who explained that “The old rule created significant obstacles that basically only existed for solo attorneys who were trying to wind down practice or change practice areas.”
The new Rule becomes effective on October 24, 2017.