A federal lawsuit filed Thursday seeks to throw out the national nursing home staffing mandate, charging that it exceeds the authority of the Centers for Medicare & Medicaid Services and that it “creates impossible-to-meet standards that will harm thousands of nursing homes and the vulnerable Americans they serve.”
The American Health Care Association, the Texas Health Care Association and three skilled nursing facilities filed the long-awaited suit against Health and Human Services Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure in the US District Court for the Northern District of Texas’s Amarillo Division.
AHCA charges that the May 10 rule “effects a baffling and unexplained departure from the agency’s longstanding position” on nursing home staffing. The association asks the court to strike the law, arguing that CMS is a ““creature[] of statute” and “possess[es] only the authority that Congress has provided.”
“CMS does not even try to claim that the statutory provisions in which Congress explicitly addressed staffing requirements empower it to enact these sweeping new mandates,” the lawsuit states. “CMS instead claims that this power is lurking in ‘various provisions’ of the Medicare and Medicaid Acts that enable the agency to promulgate requirements promoting resident health and safety.”
“But that argument runs headlong into basic principles of administrative law, as generic rulemaking provisions do not empower agencies to ‘revise’ legislative enactments and promote their own policy du jour over the policy choices that Congress enacted into federal law,” the filing continues. “That is particularly clear here given the long history of congressional action in this area, the staggering breadth of the regulatory authority CMS now asserts, and the massive economic and political significance of that assertion.”
The rule requires federally funded nursing homes to staff a registered nurse full-time and provide 3.48 hours of daily direct care per patient by 2026, with specific hourly requirements for certified nurse aide and RN direct care kicking in in 2027. Rural facilities have additional time to comply.
Those standards are “arbitrary and capricious,” AHCA states, citing a key legal argument.
CMS officials had not yet responded to a request for comment by publication.
The agency has estimated compliance will cost the sector about $40 billion in the rule’s first decade; the latest industry estimates have put the price tag even higher at $6.5 billion to $7 billion annually,plus the cost of any associated penalties for non-compliance.
“Congress has never delegated to CMS the authority to impose such onerous and unachievable mandates on practically every nursing home in the country,” AHCA wrote, later citing formal rule-making comments it provided to CMS stating that 60% of nursing homes have negative margins following COVID and the ongoing labor crisis.
“LTC facilities are in no position to cope with this massive, unfunded mandate,” the lawsuit states. “For AHCA members that are already struggling to stay afloat, the Final Rule imposes additional costs that could force them to close their doors for good.”
Texas providers take up the mantle
For its part, the Texas Health Care Association pointed out that providers in that state would be on the hook for nearly half a billion dollars annually, per CMS estimates. That includes $84 million for the 24/7 RN requirement and another $409 million for the hourly requirements.
“THCA members are simply unable to absorb these additional costs on top of the rising costs of care, chronic underfunding of Medicaid, and ongoing inflationary factors,” the lawsuit reads.
The plaintiffs argue that CMS is imposing “massive” new burdens on thousands of LTC facilities that already provide high-quality care and comply with state level staffing rules. Many achieve above-average ratings on health inspections and quality measures, “even though they do not satisfy CMS’s arbitrary new staffing requirements,” the lawsuit notes.
The Texas providers involved in the case intentionally illustrate that point. They are Arbrook Plaza, a nursing facility located in Arlington; Booker Hospital District, which operates Twin Oaks Manor in Booker; and Harbor Lakes Nursing and Rehabilitation Center in Granbury.
Arbrook Plaza has a 5-star overall rating from CMS, and the lawsuit noted that it delivers that quality with an average of 0.18 RN HPRD, 1.17 licensed vocational nurse HPRD, and 2.25 nurse aide HPRD. That total time of 3.6 hours of care would exceed the CMS requirement of 3.48 hours but would not be considered compliant based on how the time is divided among different nursing staff.
Twin Oaks has a 5-star overall rating from CMS and a 5-star staffing rate; it is the only plaintiff that is already in compliance with the new CMS hourly requirements but it would still have to recruit and hire additional RNs to meet the 24/7 RN requirement. The lawsuit called that “an extremely daunting task for a 61-bed facility located in one of the most rural parts of the Texas panhandle.”
5-star rated Harbor Lakes, meanwhile, relies heavily on the use of LVNs to achieve its above average success on quality measures. “But the Final Rule irrationally discounts (and largely ignores) the contributions of LVNs, and will therefore force Harbor Lakes to significantly increase its RN and NA staffing,” the lawsuit states.
The plaintiffs argue that CMS “largely ignores” the availability and contributions of LVNs and LPNs and“failed to adequately account for the ongoing shortage of RNs and NAs — a shortage that will be exacerbated by the artificial demand that the agency’s mandate will produce nationwide, making compliance practically impossible in many parts of the country.”
Careful lawsuit consideration
While AHCA had foreshadowed last summer that it might use legal action to thwart a rule, the association bided its time in filing.
“We had hoped it would not come to this; we repeatedly sought to work with the Administration on more productive ways to boost the nursing home workforce,” AHCA President and CEO Mark Parkinson said in a statement early today. “Unfortunately, federal officials rushed this flawed policy through, ignoring the credible concerns of stakeholders and showing little regard for the negative impact it will have on our nursing home residents, staff, and the larger health care system. We cannot stand idly by when access to care is on the line and federal regulators are overstepping their authority.”
AHCA has hired attorney Paul Clement, a former US solicitor general, and an expert on the Constitution and regular Supreme Court litigator, to lead its legal efforts on the rule. The case’s start in the Northern District of Texas reflects that court’s conservative nature — and possibly its reputation for judge shopping.
AHCA vs. Becerra could ultimately be appealed to the Supreme Court, where justices have already shown a willingness to undercut the rule-making authority of executive agencies.
Thursday’s lawsuit, in fact, references another case posing major questions about a regulatory agency’s authority to make new rules. In 2022’s Oyez vs. the Department of Labor, the High Court ruled in favor of the National Federation of Independent Business when it challenged the right of the Occupational Safety & Health Administration to mandate employers with at least 100 employees to require workers to receive COVID–19 vaccines or wear a mask and be subject to weekly testing.
In this new test of the “major questions” doctrine, AHCA argues that Congress has taken the lead in nursing home staffing requirements for more than a century, not CMS or its predecessors.
“On the rare occasions when CMS has tried to take a more aggressive approach, Congress has stepped in to curtail its efforts,” AHCA notes. “Congress underscored its intent to govern nursing home staffing through legislation — not agency regulation — by specifically instructing HHS to study potential minimum staffing requirements for nursing homes and provide a report with recommendations for Congress to consider.Congress has not altered the statutory staffing requirements for LTC facilities since 1990, and the relevant agency regulations have mirrored those statutory standards for well over 3 decades. All of that history belies any assertion that Congress intended to delegate the issue to CMS.”
The suit specifically asks the court to declare that the 24/7 RN and hourly requirements exceed CMS’s statutory authority and are arbitrary and capricious, and to issue orders setting aside the requirements and stopping HHS from “taking any action to enforce” them.
This is a breaking news item. Please stay connected with McKnight’s for additional coverage.
