Provider groups put pressure on Supreme Court over arbitration ruling

U.S. Supreme Court.
U.S. Supreme Court.

Stiff rules on arbitration in Kentucky are hurting the state's nursing homes and are not in compliance with the Federal Arbitration Act, according to a brief filed with the U.S. Supreme Court.

In their brief, the American Health Care Association and the Kentucky Association of Health Care Facilities called for a review of a Kentucky Supreme Court decision that says arbitration is not binding unless consent comes directly from the principal.

The state court's decision from 2015 subjects arbitration agreements to a number of requirements and changes that do not apply to other similar contracts,  Katherine Benesch, of Benesch & Associates LLC in Princeton, N.J., told Bloomberg BNA. She added that imposing the additional constraints is prohibited by Supreme Court.

The Kentucky provider group and AHCA are hoping for the Supreme Court to rule, as it had before, that the Federal Arbitration Act preempts state laws that discriminate against arbitration agreements. Section 2 of the act states that the arrangements are “valid, irrevocable, and enforceable as a matter of federal law.”

The groups who filed the brief against the Kentucky courts' say if the ruling is upheld nursing home operators and plaintiffs could be left to face hefty litigation fees associated with arbitration.

In 2012, the Kentucky Supreme Court ruled that survivors' wrongful death claims were not subject to arbitration. The ruling was not overturned and has been adopted by several other states.