'Irreparable harm' to the nursing home is not enough to stay a Medicare and Medicaid termination during an appeal, judge rules

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A nursing home appealing a Medicare and Medicaid termination must meet numerous criteria to qualify for a stay of the termination, even if the facility will likely close before the appeal is decided, a federal judge has ruled. 

The case involves Blossom South Nursing and Rehabilitation Center, a 160-bed skilled nursing facility in Rochester, NY. Due to its record of deficiencies, Blossom South had its Medicare and Medicaid provider agreement terminated in August 2013, according to court documents.

The facility then sued the Centers for Medicare & Medicaid Services and the New York State Department of Health for alleged due process violations. An administrative law judge subsequently upheld CMS' decision to terminate Blossom South's provider agreement, and a U.S. District Court dismissed the due process case.

Blossom then appealed the district court's dismissal, and asked the court to issue a stay that would keep the provider agreement in place during the appeals process.

SNFs must meet four criteria to qualify for such a stay, District Judge David G. Larimer noted in his Jan. 17 ruling. Blossom South does meet one of those, which is showing that it will suffer “irreparable injury” if the stay is not put in place.

The appeals court likely will not issue a ruling until well after March 16, when Blossom will stop receiving Medicare and Medicaid reimbursements, Larimer wrote. In the meantime, “many residents are likely to leave Blossom South,” so that “harm to the appellant is unquestionably relevant,” he stated.

However, Blossom South does not meet the other criteria for a stay, Larimer ruled. One of these is demonstrating that it has a “likelihood of success” in its appeal, based on the merits of its case.

“There are close cases, in which a district court has little authority to guide it, where the authority that exists is divided, or where the court has to choose between two positions of nearly equal merit,” Larimer wrote. “But here, the case law is almost uniformly against plaintiff, in holding that a nursing home has no due process right to a pre-termination hearing.”

That is, previous cases have shown that nursing homes have no right to a hearing before CMS terminates its provider agreements. Even if such a right existed, Blossom South would have a weak case, because it did in fact have a pre-termination hearing with the administrative law judge, Larimer argued.

The other criteria involve potential harm to the party opposing a stay, and the public interest. Due to the “appalling number of deficiencies” at Blossom South, postponing the termination of its certification would harm CMS — which is tasked with safeguarding residents' wellbeing — and the public interest, Larimer determined.

He ordered that Blossom South's Medicare and Medicaid termination should proceed as scheduled while the facility pursues its appeal in the Court of Appeals for the Second Circuit.

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