This case involves a group of skilled nursing facilities in New York and Rhode Island that participate in the Medicaid program. These facilities challenged a 2017 federal rule issued by the Department of Health and Human Services (HHS). The rule clarified that the requirement for a registered nurse on inspection teams applies only to standard and extended surveys, but not to inspections conducted to investigate complaints or monitor compliance. The dispute originated after a resident at Avon Nursing and Rehabilitation suffered a burn injury, leading to an inspection by a team that included dieticians but no registered nurse. The state agency imposed a civil monetary penalty on the facility. While an administrative law judge initially ruled the inspection unlawful due to the lack of a registered nurse, the HHS Departmental Appeals Board reversed that decision, prompting the nursing facilities to sue in federal court to vacate the HHS rule.
The Second Circuit, writing for the panel, focused on the statutory text of the Medicaid Act, specifically 42 U.S.C. § 1396r(g). The court analyzed the distinction between two subsections: § 1396r(g)(2), which governs 'Surveys,' and § 1396r(g)(4), which governs 'Investigation of complaints and monitoring nursing facility compliance.' The court noted that the registered nurse requirement is explicitly located in § 1396r(g)(2)(E)(i), which states that 'Surveys under this subsection shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse).' The court reasoned that the statute uses the term 'survey' to refer specifically to annual standard surveys, extended surveys, and validation surveys. In contrast, § 1396r(g)(4) refers to these activities as 'investigation' and 'monitoring,' not 'surveys.' The court emphasized that where Congress includes particular language in one section but omits it in another, it is presumed to act intentionally. Therefore, the court concluded that complaint investigations and monitoring activities under § 1396r(g)(4) do not fall within the definition of 'surveys' requiring a registered nurse. The court also clarified that this interpretation does not rely on the agency's terminology, noting that under the Supreme Court's recent decision in Loper Bright Enterprises v. Raimondo, courts must exercise independent judgment in statutory interpretation rather than deferring to agency definitions.
The decision upholds the validity of the HHS rule, allowing states and federal agencies to conduct complaint investigations and compliance monitoring at skilled nursing facilities without the mandatory presence of a registered nurse. This limits the scope of the registered nurse requirement to formal annual and extended surveys. The judgment is affirmed, and the nursing facilities' challenge to the Department of Health and Human Services' authority is rejected. No remand instructions were issued as the district court's judgment was affirmed.
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