Chevron Doctrine and Surveys

The Supreme Court removed the broad discretion regulatory agencies possess to set rules for the entities they cover. The elimination of the “Chevron” doctrine will have significant negative implications across the nursing home industry. It may even impact the outcome of specific lawsuits challenging the CMS regulation for nursing home staffing mandates.

The majority in a 6-2 decision in Loper Bright Enterprises vs. Raimondo held:

 Perhaps most fundamentally, Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do,” and “The only way to ‘ensure that the law will not merely change erratically, but will develop in a principled and intelligible fashion,’… is for the Court to leave Chevron behind.

Prior practice requires courts to defer to federal regulators’ interpretations when a statute is unclear or could be interpreted in a couple of different ways. Experts have predicted that change could encourage more lawsuits to challenge these “ambiguous” federal statutes.

However, the Court said this new ruling does not call into question previous cases that relied on the 40-year-old Chevron framework. The justices said, “The holdings of those cases that specific agency actions are lawful — including the Clean Air Act holding of Chevron itself — are still subject to statutory [precedent], despite the Court’s change in interpretive methodology.”

Justice Kagan wrote a great dissent warning against abolishing the Chevron Doctrine. Kagan wrote that giving deference to federal agencies “has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds — to name a few, keeping air and water clean, food and drugs safe, and financial markets honest.” She declared:

 And the rule is right. This Court has long understood Chevron’s deference to reflect what Congress would want and so to be rooted in a presumption of legislative intent. Congress knows that it does not — in fact cannot — write perfectly complete regulatory statutes.

In a recent 2-1 decision, the US Court of Appeals decided that nursing home complaint investigations do not require a registered nurse to be part of the on-site inspection team. Congress defined complaint investigations as not “technically surveys,” so a registered nurse should not be included in the representative group. This decision cited the new ability of Congress to determine how its statutory language can be interpreted.

In this case, most of the panel sided with the Department of Health and Human Services and the Centers for Medicare & Medicaid Services to set different levels of requirements for various surveys conducted. The most recent ruling differentiates between standard certification surveys and site visits.

These two surveys differ from certification surveys, which are annual inspections due every 15 months, while site visits are responsive to complaints made that monitor compliance. In 2017, HHS published a rule that required RNs to be present during standard and  “extended” surveys. This was in response to an earlier federal ruling where an administrative law judge dismissed a civil monetary penalty towards a New York nursing home because a team conducted a complaint survey without any nurses.

In this case, Avon Nursing and Rehabilitation self-reported an incident that occurred in 2013 where a resident tipped a bowl of hot soup into her lap, resulting in burns. The New York State Department of Health conducted an “abbreviated standard survey” in response. The recent ruling affirmed the March 2023 District Court decision that rejected the providers’ argument that Congress required an RN to be present regarding the Medicaid Act during all kinds of inspections and surveys.

The Second Circuit panel ruled that Congress made its intentions clear to treat complaint surveys differently by labeling them as “investigations” rather than surveys and leaving complaint surveys out of a specific subsection of the law. As of right now, the 2017 HHS ruling stands strong.