from the HCFA. The Defendants urge the Court to give substantial deference to the interpretation by their agencies of HCFA regulations which allow a resident to be transferred if "a transfer is necessary for his/her welfare and the facility cannot meet the resident's needs." 42 C.F.R. 483.12(a).
This Court gives considerable deference to reasonable interpretations by local agencies of their statutory mandate when determining whether those agencies are acting pursuant to their authority. See Arkansas v. Oklahoma, U.S. , 112 S. Ct. 1046; also see Natural Resources Defense Council v. Environmental Protection Agency, 256 U.S. App. D.C. 165, 804 F.2d 710 (D.C. Cir. 1986). The key question when a statute does not specifically address an issue is whether the agency's interpretation "is based on a permissible construction of the statute." Chevron v. National Resources Defense, 467 U.S. 837, at 843, 104 S. Ct. 2778, 2782, 81 L. Ed. 2d 694 (1984). In determining whether a particular agency interpretation is permissible, "a court must look to the structure and language of the statute as a whole." National Railroad Passenger v. Interstate Commerce Commission, U.S. , 112 S. Ct. 1394, 1401 (1992). However, unreasonable agency interpretations need not be accepted by a reviewing court. Id., at 1402.
The Defendants ask the Court to give deference to a local agency's interpretation of a federal agency's interpretation of a federal statute. It is apparent that the Defendants have focused on the clause "and the facility cannot meet the resident's need" within the HCFA's regulation to infer that level of care distinctions in the local licensing of facilities are acceptable. The Defendants contend that this advice from the HCFA has been reasonably interpreted by their agencies to allow for transfers and discharges based on level of care distinctions.
The Court cannot conclude that the Defendants' agencies have reasonably interpreted the HCFA's interpretation of the statute. As the statutory scheme indicates, Congress' concern in amending these statutes was for the welfare of each nursing home resident eligible for Medicaid benefits, and not for the protection of a local scheme of licensing and regulating facilities which provide different levels of care. In light of clear congressional intent, the HCFA's regulation must be read with the emphasis on the resident's "welfare" rather than the adequacy of the facility. Therefore, in the Court's view, the proper interpretation of this regulation mandates that, when a facility fails to meet the unified federal nursing home standards under Medicare and Medicaid, a resident may be transferred to a facility which meets those standards in order to protect that resident's welfare.
Furthermore, evidence that the HCFA's regulation has not been reasonably interpreted by the Defendants' agencies exists in sections of the HCFA's letter advising local agencies how to regulate transfers of nursing home residents. In the penultimate paragraph of the HCFA's advisory letter, the agency specifically indicates that the requirements for a facility to be reimbursed under either Medicare or Medicaid "are essentially the same for both programs." Defendant's Opposition to Plaintiff's Motion for Preliminary Injunction, Attachment 1, at 2.
In addition, the HCFA includes a hypothetical transfer situation in the letter to illustrate how 42 C.F.R. 483.12(a) operates. The letter's hypothetical specifically addresses a situation in which a facility is "concerned about not being able to transfer residents out of Medicare-certified distinct-part beds once they no longer require skilled care." Defendant's Opposition to Plaintiff's Motion for Preliminary Injunction, Attachment 1, at 1. In such a situation under federal law, the letter advises that such facility could either "certify the entire facility for Medicare and Medicaid participation," or "the facility could have certified a Medicare-only distinct part and a Medicaid-only distinct part to provide health related care above the level of room and board." Id., at 2.
Under the first alternative, a nursing facility could freely conduct intra-facility transfers, as long as the notification requirements were met, because the entire facility would be dually-certified and no inter-facility transfer, which challenges compliance with federal law would have occurred. Under the second alternative, an inter-facility transfer would take place but it would be in compliance with federal law, again with the proper notification, because the Medicaid-only distinct part to which the resident would be transferred would provide the same level of "skilled care" as the Medicare-only distinct part.
Contrary to any interpretation by the defendants' agencies, in either alternative, a transfer would not be made based on a level of care distinction and would, therefore, comply with federal law.
5. BECAUSE IT IS CLEAR FROM THE RECORD THAT ADMINISTRATIVE LAW JUDGES WITHIN THE DEFENDANTS' AGENCIES HAVE PREVIOUSLY REACHED THE SAME INESCAPABLE CONCLUSION THAT THE COURT REACHES TODAY, THE COURT WILL NOT DEFER TO THE JUDGEMENT OF THEIR AGENCIES THAT ITS REGULATIONS ARE IN COMPLIANCE WITH FEDERAL LAW.