Thirty-one nursing homes that want a registered nurse to be on all survey teams had their case against the government dismissed recently, with a federal judge ruling they must exhaust administrative appeals under the Medicare Act first.

The New York and Rhode Island facilities challenged the removal of a previous requirement that survey teams include healthcare professionals from different disciplines and an RN. They argued the rule was “capricious” in court documents that sought a pre-enforcement review under the Administrative Procedure Act. U.S. District Judge Laura Taylor Swain, however, ruled the court didn’t have jurisdiction over the matter because the facilities failed to challenge the rule through the Health and Human Services’ administrative review process.

The case, Avon Nursing & Rehab. v. Azar, started over a bowl of hot soup. In 2013, Avon Nursing and Rehabilitation self-reported that a resident burned herself by spilling a bowl of soup on her lap. A survey team without an RN later found Avon was out of compliance. 

But three years later, Avon appealed a related fine with an administrative law judge, who backed the home’s argument that the survey team should have had an RN. An HHS Departmental Appeals Board then overturned the administrative law judge’s ruling. CMS codified its new survey composition rule in 2018. In this challenge, the judge noted that the survey process is meant to remedy substantiated violations, regardless of protocol.

“Allowing facilities to seek invalidation of otherwise well-documented deficiencies on the basis of a defect in the survey process would, in CMS’s view, be surrendering all substance to form and would clearly thwart Congressional will,” she wrote. 

The American Health Care Association and four state provider associations filed briefs in support of the facilities.