Last month’s overturn of Chevron deference is widely expected to bolster the skilled nursing facility industry’s challenge to the newly imposed minimum staffing mandate. On May 10, the American Health Care Association (“AHCA”) along with the Texas Health Care Association (“THCA”) and several Texas long-term care facilities, filed a lawsuit in the Northern District of Texas against the U.S. Department of Health and Human Services (“HHS”). The lawsuit challenges the newly finalized minimum staffing requirements for long-term care facilities. The rule has widely been criticized for implementing a one-size-fits-all approach to staffing. The AHCA argues, forcefully, in its filing that the rule departs significantly from prior statutory standards in implementing a quantitative approach that ignores context for facilities. The AHCA and the THCA argue that the rule exceeds CMS’s statutory authority and imposes unachievable requirements.¹

The AHCA estimates that the new staffing mandate will require an additional 100,000 nurses and nurses aides to be hired, and will cost the industry an estimated $6.8 billion per year.² Some facilities are anticipated to close as a result of the new staffing requirement. This all comes at a time when the industry is in flux with facilities, especially in rural communities, facing threats of closure as more and more elders prefer to age in place in lieu of seeking an institutional care setting.³

With the issuance of its decision in Loper Bright vs. Raimondo, on June 28, 2024, the Supreme Court gave a welcome boost to the AHCA’s chances of success in their suit by overturning the Chevron deference. As explained by my colleague Chapin Sheumann, in her article, The (Potential) Bright Side of Loper Bright Long-Term Care Industry, before its overturn, courts were expected to follow the Chevron deference, which is a legal doctrine that required courts to defer to an agency’s reasonable interpretation of a statute if the statute was unclear on a particular issue. The Supreme Court has been chipping away at Chevron since 2016. Now, with the Loper Bright decision, the courts no longer need to defer to the agency’s interpretation in cases of statutory ambiguity. The U.S. District Court hearing the AHCA lawsuit will be able to review CMS’s actions and curtail them based solely on its own interpretation of the statutory authority granted by Congress. The increased discretion accruing to the court will not automatically result in the overturn of the new staffing mandate, however. CMS will be able to succeed in upholding the mandate if they can sufficiently demonstrate to the court that the mandate would result in improvements to care, and in fact that harm would result if the mandate is not implemented.

Overall, the outcome of Loper Bright is widely considered to be a boon to industry efforts to fight back against perceived CMS overreach. Stotler Hayes will continue to monitor the AHCA case in Texas along with other industry cases to track how the fallout of Loper Bright will impact our clients.

1 https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/AHCA-Files-Lawsuit-Against-Federal-Staffing-Mandate.aspx

2 https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/New-Analysis-Finds-Federal-Staffing-Mandate-Would-Require-100,000-Additional-Nurses-and-Nurses%E2%80%99-Aides,-Cost-$6-8-Billion-Pe.aspx

3 https://www.npr.org/sections/health-shots/2023/09/14/1199317652/rural-nursing-home-workforce-closures-staffing-minimum