Avon Nursing & Rehabilitation v. Becerra, No. 23-492 (2d Cir. 2024)
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A group of skilled nursing facilities in New York and Rhode Island challenged a rule promulgated by the U.S. Department of Health and Human Services (HHS). The rule allowed certain inspections of these facilities without the presence of a registered nurse, which the plaintiffs argued contradicted the Medicaid Act's requirement for a registered nurse to be part of the survey teams. The dispute arose after an incident at Avon Nursing and Rehabilitation, where a resident was injured, leading to an inspection by a team that did not include a registered nurse. The plaintiffs contended that the rule violated the statutory requirement.
The United States District Court for the Southern District of New York granted summary judgment in favor of the government. The court concluded that the Medicaid Act's registered nurse requirement applied only to surveys conducted under 42 U.S.C. § 1396r(g)(2) and not to activities under 42 U.S.C. § 1396r(g)(4), which were the subject of the challenged rule. The court also determined that even if the statute were ambiguous, the agency's interpretation was reasonable and entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.
The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the registered nurse requirement did not extend to complaint investigations and other enforcement activities under 42 U.S.C. § 1396r(g)(4). The court reasoned that the term "survey" in the statute referred specifically to annual standard surveys, extended surveys, and validation surveys, and not to the investigatory activities described in § 1396r(g)(4). Consequently, the rule allowing inspections without a registered nurse did not contradict the Medicaid Act.
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23-492 Avon Nursing & Rehabilitation v. Becerra UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2023 (Argued: March 18, 2024 Decided: October 17, 2024) Docket No. 23-492 AVON NURSING AND REHABILITATION, BRIGHTONIAN NURSING AND REHABILITATION, WOODSIDE MANOR NURSING AND REHABILITATION, THE SHORE WINDS NURSING AND REHABILITATION, THE HURLBUT NURSING AND REHABILITATION, HORNELL GARDENS NURSING AND REHABILITATION, CONESUS LAKE NURSING AND REHABILITATION, NEWARK MANOR NURSING AND REHABILITATION, PENFIELD PLACE NURSING AND REHABILITATION, HAMILTON MANOR, LATTA ROAD NURSING HOME EAST, LATTA ROAD NURSING HOME WEST, SENECA NURSING AND REHABILITATION, ELDERWOOD AT AMHERST, ELDERWOOD OF LAKESIDE AT BROCKPORT, ELDERWOOD AT CHEEKTOWAGA, ELDERWOOD AT GRAND ISLAND, ELDERWOOD AT HAMBURG, ELDERWOOD OF HORNELL, ELDERWOOD OF UIHLEIN AT LAKE PLACID, ELDERWOOD AT LANCASTER, ELDERWOOD AT LIVERPOOL, ELDERWOOD AT LOCKPORT, ELDERWOOD AT NORTH CREEK, ELDERWOOD AT WAVERLY, ELDERWOOD AT WHEATFIELD, ELDERWOOD AT WILLIAMSVILLE, ELDERWOOD AT RIVERSIDE, ELDERWOOD OF SCALLOP SHELL AT WAKEFIELD, WESTCHESTER CENTER FOR REHABILITATION AND NURSING, HIGHFIELD GARDENS CARE CENTER OF GREAT NECK, SAN SIMEON BY THE SOUND, NEW YORK CENTER FOR REHABILITATION AND NURSING, DRY HARBOR NURSING HOME AND REHABILITATION CENTER, REGO PARK HEALTH CARE, QUEENS BOULEVARD EXTENDED CARE FACILITY, ELDERWOOD AT BURLINGTON, MAPLEWOOD NURSING HOME, ALAMO HEIGHTS FOR CLINICALLY COMPLEX CARE, PREMIER CENTER FOR NURSING AND REHABILITATION, ZION HEALTHCARE CYPRESS, Plaintiffs-Appellants, v. XAVIER BECERRA, IN HIS CAPACITY AS THE SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, No. 23-492 Avon Nursing & Rehabilitation v. Becerra Defendant-Appellee, ALEX M. AZAR, II, SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. * Before: SACK, BIANCO, AND PARK, Circuit Judges. This appeal arises from the “registered nurse requirement” of the Medicaid Act, which mandates the inclusion of a registered nurse on the teams of professionals tasked with surveying skilled nursing facilities that participate in the Medicaid program. After the U.S. Department of Health and Human Services promulgated a rule that permitted certain specified inspections of these facilities without the presence of a registered nurse, a group of skilled nursing facilities challenged the rule as contradicting the statute’s registered nurse requirement. The District Court (Laura Taylor Swain, Chief Judge) concluded that the challenged rule was consistent with the Medicaid Act because, by the terms of the statute, the registered nurse requirement is limited to surveys conducted under 42 U.S.C. § 1396r(g)(2)—the provision in which the requirement appears— and does not reach activities conducted under 42 U.S.C. § 1396r(g)(4), which The Clerk of Court is respectfully directed to amend the caption of the case to conform to the caption above. * 2 No. 23-492 Avon Nursing & Rehabilitation v. Becerra were the subject of the challenged rule. For the reasons set forth below, we agree that the statute does not require the presence of a registered nurse for activities conducted under 42 U.S.C. § 1396r(g)(4). We therefore AFFIRM the judgment of the district court. Judge Park dissents in a separate opinion. BRIAN MARC FELDMAN (MICHELE DI FRANCO, on the brief), Harter, Secrest & Emery, LLP, Rochester, NY, for PlaintiffsAppellants. CHRISTOPHER CONNOLLY (BENJAMIN H. TORRANCE, on the brief), Assistant United States Attorneys, for DAMIAN WILLIAMS, United States Attorney for the Southern District of New York, New York, NY, for Defendant-Appellee. ALAN C. HOROWITZ, on the brief, Arnall Golden Gregory LLP, Atlanta, GA, for Amicus Curiae, AMDA—The Society for Post-Acute and Long-Term Care Medicine, in support of Plaintiffs-Appellants. JAMES F. SEGROVES, on the brief, Reed Smith LLP, Washington, DC, for Amici Curiae, American Health Care Association and New York State Health Facilities Association, in support of PlaintiffsAppellants. 3 No. 23-492 Avon Nursing & Rehabilitation v. Becerra SACK, Circuit Judge: This appeal arises from the “registered nurse requirement” of the Medicaid Act, which mandates the inclusion of a registered nurse on the teams of professionals tasked with surveying skilled nursing facilities that participate in the Medicaid program. After the U.S. Department of Health and Human Services promulgated a rule that permitted certain specified inspections of these facilities without the presence of a registered nurse, a group of skilled nursing facilities challenged the rule as contradicting the statute’s registered nurse requirement. The District Court (Laura Taylor Swain, Chief Judge) concluded that the challenged rule was consistent with the Medicaid Act because, by the terms of the statute, the registered nurse requirement is limited to surveys conducted under 42 U.S.C. § 1396r(g)(2)—the provision in which the requirement appears— and does not extend to activities conducted under 42 U.S.C. § 1396r(g)(4), which were the subject of the challenged rule. For the reasons set forth below, we agree that the statute does not require the presence of a registered nurse for activities conducted under 42 U.S.C. § 1396r(g)(4). We therefore AFFIRM the judgment of the district court. 4 No. 23-492 Avon Nursing & Rehabilitation v. Becerra BACKGROUND Factual Background The plaintiffs are a group of skilled nursing facilities in New York and Rhode Island that participate in the Medicaid program, which provides health insurance coverage for low-income individuals and families. Although Medicaid is a creature of federal law, it is administered primarily by the states, which receive funding from the federal government to maintain the program. Care facilities that participate in Medicaid operate subject to oversight by the Centers for Medicare & Medicaid Services (CMS), a subdivision of the U.S. Department of Health and Human Services (HHS). To receive funding through Medicaid, facilities must comply with health and safety requirements established by Congress. 42 U.S.C. § 1396r(a)(3), (b)–(d). CMS monitors compliance with these requirements through state-run inspection and certification programs, which are governed by 42 U.S.C. § 1396r(g), titled “Survey and certification process.” As relevant to this appeal, this subdivision of the statute is organized as follows: (g) Survey and certification process (1) State and Federal responsibility . . . (2) Surveys 5 No. 23-492 Avon Nursing & Rehabilitation v. Becerra (A) Annual standard survey . . . (B) Extended surveys . . . (C) Survey protocol . . . (D) Consistency of surveys . . . (E) Survey teams (i) In general Surveys under this subsection shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse). ... (3) Validation surveys . . . (4) Investigation of complaints and monitoring nursing facility compliance Each state shall maintain procedures and adequate staff to— (A) investigate complaints of violations of requirements by nursing facilities, and (B) monitor, on-site, on a regular, as needed basis, a nursing facility’s compliance with the requirements of subsections (b), (c), and (d) . . . (5) Disclosure of results of inspections and activities . . . 42 U.S.C. § 1396r(g) (emphasis added). Section 1396r(g)(2), quoted in part above, is titled “Surveys.” It provides that “[e]ach nursing facility shall be subject to a standard survey,” which addresses, among other things, “the quality of care furnished,” “written plans of 6 No. 23-492 Avon Nursing & Rehabilitation v. Becerra care,” “an audit of the residents’ assessments,” and “a review of compliance with residents’ rights.” Id. § 1396r(g)(2)(A). Standard surveys are to be conducted “not later than 15 months after” the facility’s last standard survey. Id. § 1396r(g)(2)(A)(iii). Section 1396r(g)(2) also requires that, when a facility “is found, under a standard survey, to have provided substandard quality of care,” that facility “shall be subject to an extended survey” to “review and identify the policies and procedures which produced such substandard quality of care and . . . determine whether the facility has complied with all the requirements.” Id. § 1396r(g)(2)(B). In addition to laying out the requirements for standard and extended surveys, § 1396r(g)(2) establishes that “[s]urveys under this subsection shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse),” known in the context of this litigation as the “registered nurse requirement.” Id. § 1396r(g)(2)(E)(i). It also grants authority to the Secretary of Health and Human Services to develop a protocol for conducting standard and extended surveys. See id. § 1396r(g)(2)(C). Separately, § 1396r(g)(4) provides for “Investigation of complaints and monitoring nursing facility compliance.” Under this provision, each state is tasked with monitoring the compliance of nursing facilities within the 7 No. 23-492 Avon Nursing & Rehabilitation v. Becerra requirements of § 1396(b)–(d)—which cover provision of services, residents’ rights, and administration—and investigating complaints of facilities that have violated these requirements. This provision also notes that states “may maintain and utilize a specialized team” for “identifying, surveying, gathering and preserving evidence, and carrying out appropriate enforcement actions.” Id. § 1396r(g)(4). Penalties for noncompliance may include, among other things, civil monetary penalties, denial of payment for services, and facility closure. See 42 C.F.R. § 488.406. Facilities that are subject to penalties for noncompliance have the right to appeal, see 42 C.F.R. § 488.402(f)(1)(iv), and may request a hearing before an administrative law judge to contest the determination, see 42 C.F.R. § 498.40. In 2013, a resident at Avon Nursing and Rehabilitation (“Avon”)—a skilled nursing facility located in New York State—suffered a burn after spilling hot soup on herself. After Avon reported the incident to the New York State Department of Health, the state agency conducted an inspection using a team that included two dieticians but no registered nurse. The team determined that Avon had violated HHS regulations, and CMS imposed a civil monetary penalty on the facility. 8 No. 23-492 Avon Nursing & Rehabilitation v. Becerra Avon sought a hearing before an administrative law judge (ALJ) to challenge the noncompliance finding. Following the hearing, presiding ALJ Keith W. Sickendick concluded that the “unlawfully constituted survey team could not lawfully conduct a survey” and that the “unlawfully conducted survey may not be the basis for the imposition of any enforcement remedy.” J. App’x at 59. On appeal, the HHS Departmental Appeals Board concluded that the Department of Health’s “purported failure to comply with [the registered nurse requirement] in performing the September 2013 survey did not invalidate CMS’s noncompliance determination or enforcement remedy” and remanded the matter to the ALJ. J. App’x at 267. The parties then settled the matter. In August 2017, in response to the Avon administrative proceedings, HHS published a final rule (“the Rule”) “clarify[ing] that the requirement for an interdisciplinary team that must include a registered nurse is applicable to surveys conducted under [42 U.S.C. § 1396r(g)(2)], and not to those surveys conducted to investigate complaints or to monitor compliance on-site under [42 U.S.C. § 1396r(g)(4)].” 82 Fed. Reg. 36530, 36531 (Aug. 4, 2017). In effect, the Rule construed the registered nurse requirement as applying only to the annual 9 No. 23-492 Avon Nursing & Rehabilitation v. Becerra standard surveys and extended surveys, but not to complaint investigations like the one at issue in the Avon matter. See id. at 36624. Procedural History The Plaintiffs initiated this action in the United States District Court for the Southern District of New York seeking to vacate the Rule on the ground that the Medicaid Act requires a registered nurse to participate in complaint investigations conducted under 42 U.S.C. § 1396r(g)(4). The district court (Laura Taylor Swain, Chief Judge), dismissed the case for lack of subject matter jurisdiction, see Avon Nursing & Rehab. v. Azar, 410 F. Supp. 3d 648 (S.D.N.Y. 2019), and we reversed on appeal, see Avon Nursing & Rehab. v. Becerra, 995 F.3d 305 (2d Cir. 2021) (concluding that the Medicaid Act does not strip federal courts of subject matter jurisdiction under 28 U.S.C. § 1331). On remand, plaintiffs filed a third amended complaint, and both parties cross-moved for summary judgment. The district court granted summary judgment in favor of the government after concluding that “the language, structure, and context of the Medicaid Act all demonstrate . . . that Congress clearly intended to require the presence of a registered nurse only on those surveys arising under 42 U.S.C. § 1396r(g)(2).” 10 No. 23-492 Avon Nursing & Rehabilitation v. Becerra Avon Nursing & Rehab. v. Becerra, 667 F. Supp. 3d 47, 60 (S.D.N.Y. 2023) (emphasis in original). Alternatively, applying the interpretive framework established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the district court determined that if the statute is ambiguous, the agency’s interpretation of the ambiguous provision was reasonable and therefore entitled to deference. Avon Nursing, 667 F. Supp. 3d at 58–59. DISCUSSION I. Standard of Review and Legal Framework This Court reviews a grant of summary judgment de novo. See Karpova v. Snow, 497 F.3d 262, 270 (2d Cir. 2007). In June 2024, 15 months after the district court issued its judgment in this case, the Supreme Court decided Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). In Loper Bright, the Court overruled Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), which required courts to defer to reasonable agency interpretations of ambiguous statutory language. Under Loper Bright, courts must “exercise their independent judgment in deciding whether an agency has acted within its statutory authority, . . . and under the 11 No. 23-492 Avon Nursing & Rehabilitation v. Becerra [Administrative Procedure Act] may not defer to an agency interpretation of the law simply because a statute is ambiguous.” 144 S. Ct. at 2273. II. Analysis The Plaintiffs contend that the Rule, which does not require a registered nurse to take part in “complaint surveys [or] surveys related to on-site monitoring,” 82 Fed. Reg. at 36624, contradicts the statutory requirement that a registered nurse be part of any survey “under this subsection,” 42 U.S.C. § 1396r(g)(2). The government argues, however, that the statute’s use of the phrase “this subsection” refers only to surveys mentioned in § 1396r(g)(2), such that the registered nurse requirement does not reach complaint investigations conducted under § 1396r(g)(4). According to the parties, therefore, the reach of the registered nurse requirement—and consequently the validity of the Rule— depends on whether “this subsection” refers only to § 1396r(g)(2) or to all of § 1396r(g). Ultimately, however, even if we assume that the phrase “this subsection” extends to all of § 1396r(g), the registered nurse requirement does not apply to complaint investigations, because these inspections are not “surveys” under § 1396r(g). 12 No. 23-492 Avon Nursing & Rehabilitation v. Becerra The text of the registered nurse requirement provides that “Surveys under this subsection shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse).” 42 U.S.C. § 1396r(g)(2)(E)(i) (emphasis added). The statute does not define the term “survey,” but does use this word to refer to three specific inspections that must be conducted under 42 U.S.C. § 1396r: annual standard surveys, see id. § 1396r(g)(2)(A); extended surveys, see id. § 1396r(g)(2)(B); and validation surveys, see id. § 1396r(g)(3). Notably, the statute does not use the term “survey” to refer to the investigatory and enforcement activities addressed in § 1396r(g)(4), instead referring to these activities as “[i]nvestigation of complaints and monitoring nursing facility compliance.” As a result, even if § 1396r(g)(2) unambiguously requires a registered nurse to be included on all surveys under the entirety of § 1396r(g), by the plain text of the statute, a registered nurse is not required to participate in activities that are not referred to as surveys, such as investigations or other enforcement activities conducted under Section 1396r(g)(4). 1 See Russello v. United States, 464 U.S. 16, 23 (1983) (“Where Congress includes particular Although the word “surveying” is used once in 42 U.S.C. § 1396r(g)(4) to describe a portion of the work involved in these investigations, this refers only to “surveying . . . evidence” as opposed to conducting a survey. 1 13 No. 23-492 Avon Nursing & Rehabilitation v. Becerra language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” (alteration adopted and internal quotation marks and citation omitted)). Uncertainty about whether investigations under § 1396r(g)(4) should be considered surveys may have arisen from the terminology used in HHS’s implementing regulations. Rather than referring to these investigatory and enforcement activities using the terms employed by the statute, the regulations refer to this type of inspection as a “complaint survey.” See 42 C.F.R. § 488.30 (defining “complaint surveys”); see also 42 C.F.R. § 488.301 (defining “abbreviated standard survey” to include, among other things, information gathering “premised on complaints received”). Especially in light of Loper Bright, however, our interpretation of the statute should not rest on the taxonomy developed by the agency. The registered nurse requirement only extends to surveys as that term is used in the statute, regardless of the terminology used by the agency. The regulation’s use of the term “survey” to refer to this type of inspection does not affect the meaning of the word “survey” within the universe of the statute itself. Allowing the agency’s terminology to control our 14 No. 23-492 Avon Nursing & Rehabilitation v. Becerra interpretation of the statute would be an abdication of our duty to interpret the statute independently. See Loper Bright, 144 S. Ct. at 2261 (“Under the [Administrative Procedure Act], it thus remains the responsibility of the court to decide whether the law means what the agency says.” (internal quotation marks and citation omitted)). 2 We conclude that complaint investigations and other enforcement activities conducted under 42 U.S.C. § 1396r(g)(4) are not “surveys” within the meaning of the registered nurse requirement, even when those activities are referred to as “surveys” under the implementing regulations. Because 42 U.S.C. § 1396r(g) therefore does not require a registered nurse to participate in complaint investigations, the Rule does not contradict the terms of the Medicaid Act. We therefore affirm the judgment of the district court. 3 While we do not defer to the agency’s terminology when deciding the scope of the term “survey” in the registered nurse requirement, our holding is in no way intended to limit the statutory authority of the agency or the states to develop procedures for the inspections required under 42 U.S.C. § 1396r. 3 “We may affirm on any ground with support in the record, including grounds upon which the district court did not rely.” Jusino v. Fed’n of Cath. Tchrs., Inc., 54 F.4th 95, 100 (2d Cir. 2022) (internal quotation marks and citations omitted), cert. denied, 143 S. Ct. 1056 (2023). Before the district court, the filings of both parties addressed the question of whether the investigatory activities at issue here fall within the scope of “surveys” covered by the registered nurse requirement. See Reply Memorandum of Law in Support of the Government’s Cross-Motion for Summary Judgment, Dist. Ct. Dkt. 56, at 1–2, 5; Memorandum of Law in Support of Defendant’s Cross-Motion for Summary Judgment and in Opposition to Plaintiffs’ Motion for Summary Judgment, Dist. Ct. Dkt. 96, at 15; Consolidated Memorandum of Law in Further Support of 2 15 No. 23-492 Avon Nursing & Rehabilitation v. Becerra CONCLUSION We have considered the parties' remaining arguments on appeal and conclude that they are without merit. For the reasons explained above, we AFFIRM the judgment of the district court. Plaintiffs’ Motion for Summary Judgment and in Opposition to the Secretary’s Motion for Summary Judgment, Dist. Ct. Dkt. 101, at 8. 16 23-492 Avon Nursing & Rehab. v. Becerra PARK, Circuit Judge, dissenting: This is a straightforward statutory interpretation case. 42 U.S.C. § 1396r(g)(2)(E)(i) states that “Surveys under this subsection” require a registered nurse. The question presented is whether “this subsection” includes § 1396r(g)(4). Although lawyers (and judges) might sometimes use “subsection” to encompass some or all levels of statutory subdivisions smaller than a “section,” Congress references subdivisions in accordance with technical drafting rules. Here, “this subsection” refers to subsection (g), and (g)(4) is a part of subsection (g), so nurses are required for any survey under (g)(4). But the majority avoids this straightforward result. Instead, it asks and then answers a different question: whether surveys conducted under (g)(4) are really “surveys” at all. See ante, at 14 (concluding that they are not). And in so doing, the majority rewrites the text of a final rule saying that registered nurses are not required. See 82 Fed. Reg. 36,530, 36,531, 36,624-25 (Aug. 4, 2017) (“Final Rule”). Rather than engage in these interpretive gymnastics, I would stop at the plain meaning of the words “this subsection” and reverse the judgment of the district court. I. At issue here is one subsection of the Medicaid Act, codified at 42 U.S.C. § 1396r(g). Subsection (g) lays out a scheme for ensuring nursing facilities’ compliance with the Medicaid Act. Among other things, it requires states to conduct “surveys”—site visits in which 1 23-492 Avon Nursing & Rehab. v. Becerra multidisciplinary teams of professionals evaluate nursing facilities’ compliance with statutory and regulatory requirements. See, e.g., id. § 1396r(g)(2) (providing for “annual standard surveys,” “abbreviated standard surveys,” and “extended surveys,” among others). Different types of surveys are to be conducted at certain times following specified protocols. See id. Particularly important here, § 1396r(g)(2)(E)(i) states that “Surveys under this subsection shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse).” The government argues that “this subsection” refers only to § 1396r(g)(2) and thus does not include surveys conducted in response to specific complaints, which are authorized under § 1396r(g)(4). Plaintiffs say that it refers to all of § 1396r(g), including (g)(4). Plaintiffs are correct. Congress drafts statutes following a standard hierarchical structure: statutes are split into sections, which are further subdivided into subsections, paragraphs, subparagraphs, clauses, and so on. See, e.g., NLRB v. SW Gen., Inc., 580 U.S. 288, 300 (2017) (“Congress often drafts statutes with hierarchical schemes— section, subsection, paragraph, and on down the line.”). This hierarchy is set out in drafting manuals prepared by both House and Senate legislative counsel. See, e.g., Office of the Legislative Counsel, U.S. House of Representatives, Style Manual; Drafting Suggestions for the Trained Drafter 21, 47 (1989) (“1989 House Drafting Manual”); Office of the Legislative Counsel, U.S. House of Representatives, House Legislative Counsel’s Manual On Drafting Style 15-16, 39 (2022) (“2022 2 23-492 Avon Nursing & Rehab. v. Becerra House Drafting Manual”); Office of the Legislative Counsel, U.S. Senate, Legislative Drafting Manual 10 (1997) (“1997 Senate Drafting Manual”). So when Congress refers to a “subsection,” it means a top-level subdivision of a section, enumerated with a lowercase letter. See, e.g., 1989 House Drafting Manual 21; 2022 House Drafting Manual 15-16. Paragraphs are enumerated with Arabic numerals, subparagraphs with capital letters, clauses with lowercase roman numerals, and so on. So § 1396r(g)(2)(E)(i) describes clause (i) of subparagraph (E) of paragraph (2) of subsection (g) of section 1396r. And when § 1396r(g)(2)(E)(i) refers to “this subsection,” it means all of subsection (g), not just paragraph (2). The district court rejected this reasoning based on its assumption that “Congress chose not to follow this traditional hierarchical scheme when drafting the Medicaid Act.” Avon Nursing & Rehab. v. Becerra, 667 F. Supp. 3d 47, 55 (S.D.N.Y. 2023). The district court stated that Congress used “subsection” in a “loose and imprecise manner, . . . as a shorthand/catchall term for many different internal cross-references, even when the statutory subdivision in question would technically be denominated a paragraph, subparagraph, clause, etc., under the standard hierarchy.” Id. As an example, the district court pointed to cross-references within § 1396r to “subsection (g)(2),” see, e.g., 42 U.S.C. § 1396r(h)(1), and reasoned that, if Congress meant to employ the standard hierarchy, then it would have written “paragraph (g)(2)” instead of “subsection (g)(2).” 3 23-492 Avon Nursing & Rehab. v. Becerra But this misunderstands how Congress cross-references statutory subdivisions. Standard practice in statutory drafting is to refer to crossreferences by the senior-most listed unit—e.g., “subsection (g)(2)” instead of “paragraph (g)(2)” and “paragraph (1)(B)(i)” instead of “clause (1)(B)(i).” See, e.g., 2022 House Drafting Manual 39 (“[R]efer to section 5(a)(1) and not paragraph 5(a)(1).”); 1997 Senate Drafting Manual 43 (“Refer to ‘section 123(a)(1)(A) of the ABC Act (YY U.S.C. ZZZ(a)(1)(A))’ [not ‘subparagraph (A) of paragraph (1) of subsection (a) of section 123 of the ABC Act (YY U.S.C. ZZZ(a)(1)(A))’].” (brackets in original)). This approach to cross-references is longstanding and prescribed by legislative drafting manuals dating back to at least 1980. See Donald Hirsch, Drafting Federal Law 10 (1st ed., U.S. Dep’t of Health & Hum. Servs. 1980); see also Reed Dickerson, The Fundamentals of Legal Drafting 201 (2d ed., Little, Brown & Co. 1986) (“Don’t say Paragraph (4) of subsection (c) of section 25[;] Say Section 25(c)(4).”); 1989 House Drafting Manual 47 (“[R]efer to section 5(a)(1) and not subsection 5(a)(1).”). And so under ordinary drafting rules, when § 1396r(g)(2)(E)(i) refers to “this subsection,” it means subsection (g). There is no reason to think that Congress disregarded the standard hierarchy when it drafted § 1396r. In short, “this subsection” refers to all of § 1396r(g), so the registered-nurse requirement in § 1396r(g)(2)(E)(i) applies to surveys conducted in response to specific complaints under § 1396r(g)(4). 4 23-492 Avon Nursing & Rehab. v. Becerra II. The majority decides this case on different grounds. It concludes that activities under § 1396r(g)(4) never entail a “survey,” making the registered-nurse requirement inapplicable to those activities. See ante, at 14. This is incorrect. Among other things, § 1396r(g)(4) requires states to “investigate complaints of violations of requirements by nursing facilities.” One might imagine satisfying this requirement without ever conducting a survey, but the Final Rule does not contemplate such a possibility. In several contexts, the Final Rule requires states to conduct “surveys” in response to complaints. For example, a state “must . . . conduct a standard or an abbreviated survey to investigate complaints of violations . . . if its review of the allegation concludes that—(i) A deficiency in one or more of the [Medicaid Act’s] requirements may have occurred; and (ii) Only a survey can determine whether a deficiency or deficiencies exist.” 82 Fed. Reg. at 36,635-36 (codified at 42 C.F.R. § 488.308(f)(1)) (emphasis added). So the Final Rule requires that states use “surveys” to conduct activities that (g)(4) requires. 1 Not all activities under § 1396r(g)(4) require a “survey.” As HHS has explained, it would not “be reasonable or economically feasible to require States . . . to survey all facilities for which complaints are received.” 59 Fed. Reg. at 56,159. By not using the word “survey” in (g)(4), Congress preserved flexibility for HHS to require surveys sometimes—but not always. 1 5 23-492 Avon Nursing & Rehab. v. Becerra The majority concludes that these surveys are not “surveys” under § 1396r(g)(2)(E)(i) for two reasons. First, the majority says that “survey” refers only “to three specific inspections that must be conducted under 42 U.S.C. § 1396r”–standard surveys, extended surveys, and validation surveys. See ante, at 11-12. But the Final Rule requires that these same inspections be used to satisfy the requirements of § 1396r(g)(4). And if a state survey agency must conduct an “abbreviated standard survey” to fulfill its obligations under § 1396r(g)(4)—the same “abbreviated standard survey” it conducts under § 1396r(g)(2) when a nursing facility changes ownership, for example—that “abbreviated standard survey” is no less a “survey” because it is conducted under § 1396r(g)(4). Second, the majority states that calling activities under § 1396r(g)(4) “surveys” would let “the agency’s terminology . . . control our interpretation of the statute.” Ante, at 13. Not so. The agency is not defining the meaning of a “survey” for us, but merely exercising its authority to “fill up the details of a statutory scheme,” Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2263 (2024) (cleaned up), by requiring that states use “surveys” to satisfy certain obligations. It remains our task to “decide whether the law means what the agency says.” Id. at 2261 (cleaned up). And it makes little sense to conclude that the same investigation is a “survey” when required by § 1396r(g)(2) or (g)(3), but “not a survey” when required by the Final Rule. 6 23-492 Avon Nursing & Rehab. v. Becerra The majority concludes that surveys under § 1396r(g)(4) need not include registered nurses on survey teams. That result may or may not be wise policy. But it is not the province of the courts to rule on the wisdom of policy decisions. See Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558 (1978). Nor should we reformulate the issues in a case in order to do so. The majority’s theory that activities under § 1396r(g)(4) never entail “surveys” is one of its own creation, an argument raised neither by the parties nor the district court. Cf. United States v. Sineneng-Smith, 590 U.S. 371, 375-76 (2020). Our job in this case is to determine whether a challenged agency action is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). The Medicaid Act states that all surveys must include a registered nurse on survey teams. The Final Rule says the opposite and is thus invalid. I respectfully dissent. 7
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