On May 10, 2024, the Centers for Medicare and Medicaid Services (CMS) published its Final Rule to implement minimum staffing standards for long-term care (LTC) facilities in the United States. However, as discussed in our prior blog post, the Final Rule was immediately challenged under the Administrative Procedure Act (APA) in two major lawsuits. These cases have resulted in divergent rulings, injecting more uncertainty across the LTC industry about the future of the application and validity of the Final Rule.
In one case, the US District Court for the Northern District of Texas vacated the staffing requirements of the Final Rule, and there looms a possibility of appeal (Am. Health Care Ass'n, v. Kennedy, No. 2:24-CV-114-Z-BR, 2025 WL 1032692 (N.D. Tex. Apr. 7, 2025)). In the other, the US District Court for the District of Iowa denied plaintiffs’ motion for a preliminary injunction, finding that CMS had not exceeded its statutory authority in promulgating the Final Rule (Kansas v. Becerra, No. C24-110-LTS-KEM, 2025 WL 212358 (N.D. Iowa Jan. 16, 2025)). Plaintiffs have appealed that ruling and the case is currently pending before the US Court of Appeals for the Eighth Circuit (State of Kansas, et al. v. Robert F. Kennedy, Jr., et al., No. 25-1097 (8th Cir.)).
The Final Rule reflected a new era in the regulation of nursing homes in the United States and aimed to enhance the quality of care provided to nursing home residents by establishing specific staffing requirements that were scheduled to become effective in May 2026. However, it sparked immediate controversy, facing opposition from various stakeholders, including nursing home operators, industry groups, and some members of Congress.
Critics argued that the Final Rule imposed an unfunded mandate and would exacerbate existing workforce shortages in the nursing home industry, potentially leading to the closure of facilities unable to meet the new standards.
Despite these challenges, the US Department of Health and Human Services (HHS)—under the new US administration—filed a brief defending the lower court’s ruling with the Eighth Circuit, arguing, inter alia, that CMS had the authority to issue the staffing requirements. This and further developments in these cases will have significant impact on the future of CMS’s oversight of the country’s nursing homes.
The Final Rule – Overview of Key Staffing Provisions
There are two provisions of the Final Rule which faced challenges under the APA. The first required nursing homes to maintain a minimum of 3.48 hours per resident day (HPRD) of total nurse staffing, with each resident receiving at least 0.55 hours of care from a registered nurse (RN) per day and at least 2.45 hours of care from a nursing aide per day. Facilities were permitted flexibility in using a combination of staff—RNs, licensed nurse practitioners, licensed vocational nurses, or nursing aides—to provide the additional 0.48 HPRD needed to meet the Final Rule’s minimum standard.
Second, the Final Rule required an RN to be onsite at facilities 24 hours a day, seven days a week, to provide direct patient care. This requirement intended to address preventable safety events during more vulnerable times for residents such as nights and weekends.
Judicial Scrutiny
In May 2024, the American Health Care Association (AHCA) filed suit against HHS in the US District Court for the Northern District of Texas. AHCA argued that the 24/7 RN requirement and the HPRD staffing minimum exceeded CMS's statutory authority under the APA. Earlier this month, the court granted summary judgment in favor of plaintiffs and vacated the staffing requirements of the Final Rule.
The court found that the 24/7 RN requirement exceeded CMS's statutory authority under the Social Security Act, which only requires facilities to provide RN services for at least eight consecutive hours a day. The court reasoned that the Final Rule effectively amended the baseline enacted by Congress and CMS did not have the authority to take such an action through regulation.
Similarly, the court found that the HPRD staffing minimum exceeded CMS’s authority because the requirement did not consider the individualized needs of each facility's residents. Under the Social Security Act, Congress requires that nursing homes “provide … nursing services which are sufficient to meet the nursing needs of its residents.” This standard, according to the court, requires facilities to consider several factors to determine proper staffing levels. The court held that the HPRD staffing minimum did not account for such individualized considerations because it was a “set one rule for all.” As such, CMS lacked authority to circumvent the individualized assessment required by Congress.
In a separate but similar lawsuit brought by 20 state attorneys general, two nursing homes, and a non-profit trade association against HHS in October 2024, the US District Court for the Northern District of Iowa reached a different result. In this case, plaintiffs filed a motion for preliminary injunction and put forth similar arguments that the Final Rule exceeded CMS’s regulatory authority under the APA.
On January 16, 2025, the court denied the plaintiffs’ motion, concluding that the plaintiffs had not demonstrated irreparable harm and that the plaintiffs were unlikely to succeed on the merits of their claims. The court specifically found that CMS had authority to establish the staffing requirements for the health and safety of nursing home residents.
Plaintiffs appealed the ruling to the Eighth Circuit. The US administration filed a brief defending the lower court’s ruling on behalf of HHS. The defense of the Final Rule by the US administration in the case was somewhat unexpected given the vocal opposition to the Final Rule from congressional Republicans and some rural Democrats, who argued the staffing mandates are overly burdensome and could lead to facility closures and repeated public comments on the intent to reduce regulations across the government. Indeed, the brief, filed on April 3, 2025, was followed by reporting from the New York Times that officials at HHS wanted to “reverse” the Final Rule as part of deregulatory efforts.
The Texas District Court’s ruling would be a welcome reprieve for the LTC industry, particularly operators in rural areas that had expressed concerns about the feasibility and financial burden of meeting the new staffing standards. However, HHS’s decision to defend the Final Rule in the Eighth Circuit suggests it may appeal the Texas District Court’s decision to the US Court of Appeals for the Fifth Circuit. Ultimately, with these two divergent rulings, the appellate courts will need to provide clarity on the fate of the Final Rule.
Key Takeaways
The legal battle over CMS's minimum staffing requirements for LTC facilities is far from over, and stakeholders should monitor these cases closely for developments. Their respective outcomes will hold important implications for whether the staffing requirements of the Final Rule will go into effect as the May 2026 date nears. If the Final Rule does not survive these challenges, CMS will face a decision of whether and how to change its oversight of quality of care in nursing homes.