‘Fast-Tracked’: AHCA Lawsuit Opposing Nursing Home Staffing Mandate Has Strong Legs, With Injunction Expected Soon

Lawyers and other leaders in the nursing home sector believe the American Health Care Association’s (AHCA) lawsuit is strong, framed well and likely to succeed, with a decision possible by early 2025.

An injunction from the plaintiffs – all 5-Star facilities located in Texas along with AHCA – regarding staffing rule’s implementation should follow in the coming months. The upcoming presidential election could dramatically impact the lawsuit as well, should former President Trump win and the new administration decides to change course on the final rule, leaders said.

The legal action challenges the rule under the Administrative Procedure Act on the grounds that it exceeds CMS regulatory authority, managing partner and shareholder for law firm Hooper, Lundy & Bookman, Mark Reagan, told Skilled Nursing News in an email. If the court finds that CMS actually had the regulatory authority to establish numerical minimum staffing requirements, then a second element of the argument would kick in, namely that the rule exceeds statutory limits.

“The era of reflexive judicial deference to questionable governmental actions is nearly at its end,” Reagan said. “The arguments made by CMS as to its authority to wade into this area are, at best, highly questionable. At worst, unserious.”

Moreover, Congress already has an effective minimum staffing mandate in place for nursing homes, said Craig Conley, shareholder at law firm Baker Donelson. The fact that the lawsuit was filed in Texas says a lot about its viability, he added, with the state notoriously being a more conservative, state friendly, business friendly sort of venue and jurisdiction.

“I think that was a strategic move on AHCA’s part to file [the lawsuit] in Texas where they may get a more friendly venue for operators and for businesses,” said Conley.

Other industry experts said while there are no guarantees that the staffing mandate will be dismissed, many factors – including the complaint’s filing in Texas – support the industry’s move.

Scott Tittle, managing director and head of government relations and external affairs for VIUM Capital, said that while there is no way of predicting what might happen, AHCA feels it has a very strong case and strong representation.

“The lead counsel is Paul Clement, who is a former Solicitor General under President Bush, has significant experience in front of the Supreme Court, and is considered to be one of the leading experts in the country in Constitutional and Administrative Law,” Tittle said in an email.

In terms of filing location, Tittle added that Texas skilled nursing facilities will also be some of the hardest hit in the country in terms of the number of nurses needed to meet the 24-hour nursing requirement.

Currently Congress’ staffing rule for nursing homes that participate in Medicare or Medicaid, or both, require that a nursing home must provide 24-hour licensed nursing service that is sufficient to meet nursing needs of its residents, and that a nursing home must use the services of a registered professional nurse at least 8 consecutive hours a day, 7 days a week.

On the other hand, the final rule mandates a minimum of 3.48 hours per resident per day (HPRD) of total staffing, with specific allocations for registered nurses (RN) and nurse aides. This standard encompasses 0.55 HPRD of direct RN care and 2.45 HPRD of direct nurse aide care. CMS said that facilities can use a mix of nurse staff, including RNs, LPNs/LVNs, or nurse aides, to meet the additional 0.48 HPRD.

Next steps

From here, CMS will consider whether to file a motion to dismiss on jurisdictional grounds, but the action from AHCA has been structured to be strong on this front, Reagan said. He expects the case to be resolved by way of a motion for summary judgment and, barring unforeseen circumstances, produce a judgment no later than early 2025.

Conley expects plaintiffs to move to enjoin the implementation of the rule until everything is worked out in the court system. CMS will move to dismiss the lawsuit, a typical tactic in this type of case, he said.

“I think that the court is likely to enjoin it … that’s typical. That won’t be surprising if that happens,” said Conley.

In terms of what nursing homes should do in the meantime, operators must continue to shore up their workforce and rebuild staff – that work will continue regardless of the rule, Reagan said.

“Keep on keepin’ on as if the rules in place are going to be implemented,” added Conley. “But what I suspect is that there will be an injunction that will prevent it from being implemented until the lawsuit has panned out and reaches its conclusion.”

Operators should try to reach deadlines under the mandate or try to get a waiver, some type of intervention until plaintiffs are able to get an injunction.

Tittle suggests operators contact their U.S. Senate and House offices to let them know of their concerns over the rule, sharing how impossible it will be to hire the staff needed and the extreme cost associated with the mandate.

Some good points

Three main points were brought up in the filing, said Reagan. First, the lawsuit references conclusions reached in numerous studies, that the minimum staffing requirements and a “one size fits all” approach doesn’t support better quality.

“Discussion of the various studies was enormously informative, including the one relied upon by CMS. The analytics do not support the actions taken by CMS – that is pretty devastating,” said Reagan.

Second, the lawsuit demonstrated there isn’t a workforce available to meet the mandate, Reagan said. Third, AHCA and other plaintiffs pointed to the “absurdity” of no new funding tied to the rule, and yet nursing homes need to comply with requirements and preserve access.

“It’s going to set the entire industry up for failure, and with already decreased margins, especially with the reduced reimbursement rate, facilities are struggling as it is,” said Conley. “I think they make a good point that, if this goes into effect, a lot of operators are going to have to go out of business.”

Other than these main three points brought up in the filing, Reagan also pointed to the clear and consistent action of Congress over time in occupying this field. In other words, Congress has in the past spoken clearly on the use of registered nurses (RNs) and has asked CMS to advise it on any necessary or helpful changes or additions.

“Instead, CMS has undertaken to replace Congress with its own policy views,” said Reagan.

The filing goes into great detail regarding the history of CMS considering a blanket federal staffing ratio in the past, added Tittle. The agency consistently backed away from such a ratio, recognizing that the “one-size-fits-all” approach doesn’t work for a sector known to be highly regional.

“Lastly, the Plaintiff nursing homes are all 5-star facilities,” added Tittle. “This rule is going to significantly impact all nursing homes regardless of location or quality scores, and there simply is no rational basis for this blanket staffing mandate based on CMS’ own long-standing position against them and its most recent internal report.”

Immediate problems and operators in limbo

Running tandem with the lawsuit are various deadlines and requirements under the rule. The first hurdle right now are the facility assessments baked into the final rule, noted Conley. Coming due in August, these assessments will determine a facility’s current staffing ratios and where they stand with what they need to do to be in compliance with the mandate.

There’s no ability for nursing homes to apply for exemptions or waivers in advance – they’re only able to request them after they are assessed and deemed as failing to meet the rule, said Tittle.

Additionally, exemptions and waivers are going to be granted in limited circumstances and will be only partial relief, he said.

“The best preparation now is letting federally elected officials know of the significant concerns over the rule,” added Tittle.

With this first requirement deadline fast approaching, Conley expects the injunction and CMS’ move to dismiss the case to come fairly quickly.

“The case will probably be fast tracked. It’s in federal court, should be fast tracked pretty quick, and move along quicker than most lawsuits normally would,” said Conley.

There will be a tight schedule in place given that the first part of the rule goes into effect in August with the facility assessments. “A lot of buildings out there are in limbo, not really knowing what to do other than follow what’s been mandated. It may end up that it doesn’t become effective,” said Conley.