The United States District Court for the Northern District of Texas granted a plaintiffs’ motion for summary judgment and vacated the minimum staffing standards for nursing homes participating in Medicare or Medicaid in a final rule that had been issued by the Centers for Medicare and Medicaid (CMS), holding that CMS exceeded its statutory authority and the mandates were inconsistent with federal legislation governing nursing homes. American Health Care Ass’n v. Kennedy, 2:24-CV-114-Z-BR (N.D. Tex. April 7, 2025).
In May 2024, CMS released a final rule requiring nursing facilities to have a registered nurse onsite 24 hours a day, seven days a week, to provide direct resident care (the 24/7 requirement). In addition, the final rule required all nursing facilities to comply with several hours-per-resident-day (HPRD) ratios, setting baseline staffing requirements.
The plaintiffs filed a motion for summary judgment against CMS, asserting that the 24/7 requirement impermissibly altered the statutory baseline, which required nursing facilities to use the services of a registered nurse for eight consecutive hours a day, seven days a week. In addition, the plaintiffs argued that the HPRD requirements set forth in the final rule replaced the flexible standard established by Congress (i.e., that nursing facilities were required to provide nursing services sufficient to meet the needs of their patients) with inflexible standards applicable to all facilities that did not accommodate the wide variation in resident needs in different locations and facilities.
The court granted the plaintiffs’ motion for summary judgment, ruling that in establishing the 24/7 requirement, CMS effectively amended the statute by replacing the minimum hours set by Congress with its own preferred minimum. Relying on section 706 of the Administrative Procedure Act (APA) and the US Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), the court held that CMS had not merely explained the details of the statute in the final rule, but instead had replaced the statutory baseline established by Congress with its own. The court noted that the affected nursing facilities could fully comply with the statute as written and yet still violate the regulation. As a result, the court determined that the 24/7 requirement could not stand.
Similarly, the court held that the HPRD requirements, by establishing one set of rules applicable to all nursing facilities, effectively eliminated the statutory requirement that the nursing needs of a facility’s residents be considered in setting minimum staffing standards. Thus, CMS had impermissibly stripped away statutory text in establishing the HPRD requirements.
As a result, the court granted the plaintiffs’ motion for summary judgment. The court determined that vacatur was the appropriate remedy for unlawful agency action, but limited the vacatur to the 24/7 requirement and the HPRD requirements of the final rule.
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