ROANOKE, Va., March 15, 2017 /PRNewswire-USNewswire/ -- President Trump's nomination of Tenth Circuit Court of Appeals Judge Neil Gorsuch to the United States Supreme Court has generated heated discussion on Capitol Hill. But regardless of one's political views, long-term care facilities would likely benefit from having him on the high court bench, says Nancy Reynolds, a shareholder in national law firm LeClairRyan's Roanoke, Va. office and co-leader of the firm's Long Term Care Industry team. In particular, she points to the conservative jurist's opinions on federal agencies overstepping their mandates, a perspective that may be very helpful to the highly-regulated long-term care industry.
As one example of government overreach, "in October 2016, the long-term care industry saw the Centers for Medicare and Medicaid Services ("CMS") squeeze in a re-write of its regulations just before a change in administration," Reynolds writes in a recent blog, How a Justice Neil Gorsuch May Benefit Long Term Care Facilities. "Some of those new regulations can be considered of questionable relevance to the mission of CMS, particularly the prohibition on pre-dispute arbitration."
Released by the outgoing Obama administration and designated as effective on Nov. 28, 2016, the rule was preliminarily enjoined by a Mississippi federal trial court on November 7, 2016. However, that trial court ruling was not specifically identified as applicable nationally. The Obama rule is important because it seeks to ban pre-dispute agreements that require binding arbitration with any resident or resident's representative, or that require a prospective resident to sign an arbitration agreement at the time of admission to a long-term care facility.
According to Reynolds, those regulations trample Section 2 of the Federal Arbitration Act. The Act mandates that "arbitration agreements shall be 'valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,'" she writes.
Although the 1935 Social Security Act gives the Secretary of the Department of Health and Human Services the authority to promulgate regulations for the purpose of administering the Act, it is silent on dispute resolution, arbitration and private rights of action. "Further, the (final) regulations ignore decades of United States Supreme Court precedent on enforcement of the FAA, including Marmet Health Care Center, Inc. v. Brown, 132 S.Ct. 1201 (2012), in which the United States Supreme Court struck down statutes prohibiting pre-dispute arbitration contracts," adds Reynolds. "The similarities with the CMS regulations cannot be more apparent, requiring that they also be struck down."
So how does Judge Gorsuch figure into the mix? On August 23, 2016, he wrote a concurring opinion in Gutierrez-Brizuela v. Lynch, 834 F.3d 1142 (10th Cir. 2016) that involved apparent over-reaching by the Board of Immigration Appeals, which insisted on its interpretation of a statute over the court's interpretation. In his remarks on the roles of each branch of government, Judge Gorsuch noted that the executive agencies "were created to ensure execution of legislation. The agencies neither legislate nor adjudicate."
Judge Gorsuch further stated that the regulatory agencies have been allowed to "swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers' design. Maybe the time has come to face the behemoth."
Reynolds agrees that it is indeed time to confront the issue of agency overreach, adding, "The nomination of Judge Neil Gorsuch to the U.S. Supreme Court may be just what the long-term care industry needs."
In the meantime, she is surprised that long-term care facilities across the country are relying on a Mississippi trial court opinion when it comes to moving ahead with their arbitration clauses, since doing so means that they may risk a funding withdrawal from Medicare and Medicaid. "My advice to clients is to proceed with caution; they know where the money comes from," Reynolds counsels.
"Trial courts typically do not set precedent for the rest of the country," Reynolds adds. "For federal cases, the only real precedent is at the appellate level, and primarily the U.S. Supreme Court, which is why Judge Gorsuch can be so important for this and other regulatory overreach issues confronting the long-term care industry."
The full column is available at: https://ltccounsel.com/how-a-justice-neil-gorsuch-may-benefit-long-term-care-facilities/
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NOTE TO MEDIA: Nancy Reynolds and other members of LeClairRyan's Long Term Care industry team are available as resources for bylined articles or interviews on various issues impacting the industry.