NURSING HOMES: Must Have HHS Hearing First for Grievances
Before nursing homes can contest Medicare regulations in court, they must go through a government hearing, the Supreme Court ruled yesterday. The Wall Street Journal reports that the 5-4 decision ends a case in which the Illinois Council on Long Term Care Inc. sued Donna Shalala, charging that "certain Medicare-related health and safety regulations put in effect ... were among other things, unconstitutionally vague and left too much discretion to HHS inspection teams." An Illinois district court dismissed the case, saying it lacked jurisdiction, but the U.S. Court of Appeals for the 7th Circuit in Chicago ruled that "under Medicare regulations, nursing homes must take disputes over reimbursement to an administrative hearing, but that the same rules don't apply to challenges to the Medicare rules themselves." The Supreme Court, however, reversed that decision (Greenberger, 3/1). Writing the majority opinion, Justice Stephen Breyer said, "Congress may well have concluded that a universal obligation to present a legal claim first to (the Department of Health and Human Services), though postponing review in some cases, would produce speedier, as well as better, review overall. Proceeding through the agency in this way provides the agency the opportunity to reconsider its policies, interpretations and regulations in light of those challenges. At a minimum ... the matter must be presented to the agency prior to review in a federal court."
Justice Clarence Thomas wrote the dissenting view, arguing, "Delayed review ... may mean no review at all. For when the costs of presenting a claim via the delayed review route exceed the costs of simply complying with the regulation, the regulated entity will buckle under and comply, even when the regulation is plainly invalid" (Asseo, AP/Newport News Daily Press, 2/29). Elliot Pollack, an attorney who represents nursing home companies, said that dealing individually with HHS can prove lengthy and costly, while filing a lawsuit "would entitle associations to ask for immediate relief." He added, "The leverage has shifted very, very significantly to the secretary. Rather than fight this out on an industry basis, she now can deal with each facility" (Wall Street Journal, 3/1).