ALBANY, NY – A federal judge has dismissed a lawsuit brought by a Hudson Valley rehabilitation center seeking to overturn federal monetary penalties imposed for noncompliance with Medicare requirements, rejecting claims that the government violated the facility’s constitutional right to a jury trial.
U.S. District Judge Mae A. D’Agostino issued the ruling in NCRNC, LLC v. Kennedy et al., finding that the court lacked jurisdiction over the claims filed by the Northeast Center for Rehabilitation and Brain Injury. The nursing home, based in Lake Katrine, New York, sued Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz in their official capacities.
The center challenged civil penalties assessed by CMS, arguing that, following the Supreme Court’s 2024 decision in SEC v. Jarkesy, the agency could not impose monetary sanctions without a jury trial in an Article III court. The facility also claimed that CMS’s simultaneous suspension of its Nurse Aide Training and Competency Evaluation Program (NATCEP) was unconstitutional.
Judge D’Agostino rejected those arguments, ruling that the court lacked subject matter jurisdiction because Congress had established specific administrative channels for appealing CMS enforcement actions. The decision emphasized that providers must exhaust all available administrative remedies before seeking judicial review.
The court also denied the nursing home’s cross-motion to amend its complaint, finding that the proposed amendments would not cure the jurisdictional defects. Earlier in the case, Judge D’Agostino had granted a temporary restraining order halting collection of the penalties, but she later dissolved that order and denied the center’s request for a preliminary injunction.
The ruling leaves intact CMS’s authority to enforce civil monetary penalties and training suspensions under the Medicare Act, even in light of the Supreme Court’s evolving jurisprudence on agency enforcement powers.
Key Points: Federal judge rejects nursing home’s constitutional challenge to Medicare penalty – Albany
- Judge Mae A. D’Agostino dismissed a nursing home’s lawsuit challenging a CMS monetary penalty as unconstitutional.
- The facility claimed the penalty violated its Seventh Amendment rights under SEC v. Jarkesy (2024).
- The court ruled it lacked jurisdiction because the center failed to exhaust administrative remedies before suing.
