Avon Nursing & Rehabilitation v. Becerra, No. 19-3953 (2d Cir. 2021)Annotate this Case
Plaintiffs, a group of nursing homes that participate in both the Medicare and Medicaid programs, challenge the legality of DHS's Final Rule permitting survey teams conducting certain inspections of nursing homes not to include a registered nurse. The district court dismissed plaintiffs' claims, brought under the Medicare and Medicaid Acts, for lack of subject-matter jurisdiction based on claim-channeling and jurisdiction-stripping provisions governing claims arising under the Medicare Act.
The Second Circuit reversed, concluding that the district court has jurisdiction under 28 U.S.C. 1331 over plaintiffs' claim arising under the Medicaid Act, which does not incorporate the same claim-channeling and jurisdiction-stripping provisions as the Medicare Act. The court explained that the Medicare Act's review provisions do not preclude plaintiffs from challenging the Final Rule in federal court because their challenge is independently rooted in the Medicaid Act. Furthermore, plaintiffs' Medicaid Act claim is not inextricably intertwined with a Medicare Act claim for benefits or compliance determination, and the government's policy rationale does not support claim channeling and jurisdiction stripping in this case. Accordingly, the court remanded for further proceedings.