Aloha Nursing and Rehab Centre, ALJ Ruling 2026-8 (HHS CRD February 11, 2026)

RULING DENYING PETITIONER'S MOTION FOR REMAND

This matter has recently been reassigned to me.

Petitioner, Aloha Nursing and Rehab Centre, is a long-term-care facility, located in Kaneohe, Hawaii, that participates in the Medicare program.  Based on surveys conducted between August 12, 2021, and January 25, 2022, the Centers for Medicare & Medicaid Services (CMS) determined that, from August 12, 2021 through January 16, 2022, the facility was not in substantial compliance with Medicare program requirements and that three of its deficiencies posed immediate jeopardy to resident health and safety.

The facility appealed one of the multiple deficiencies cited during these surveys – an infection control deficiency cited at the immediate jeopardy level during a September 22, 2021 federal monitoring survey.  Based on that (and other) deficiency findings, CMS imposed remedies:  a directed plan of correction, the denial of payment for new admissions (DPNA), and civil money penalties (CMPs).  CMS Exs. 2, 42, 43.

Petitioner has filed a motion for remand.  Citing the Supreme Court's decision in SEC v. Jarkesy, 603 U.S. 109 (2024), Petitioner argues that this appeal "was void ab initio" and

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that I should remand the matter to CMS "for appropriate disposition."  Petitioner also asks that I order CMS to refund the CMP it purportedly collected.1  Because I have no authority to grant Petitioner the relief it seeks, I deny Petitioner's motion.

1. I am bound by the statute and regulations and have no authority to review Petitioner's constitutional challenges.2

Petitioner asserts that, based on Jarkesy, the Seventh Amendment to the Constitution mandates that Petitioner is entitled to a trial by jury.  An administrative law judge therefore has no authority to hear Petitioner's appeal.  CMS responds that an administrative law judge is bound by the statute and regulations and has no authority to invalidate those provisions based on constitutional challenges.

CMS is correct, and this effectively ends my inquiry.  Administrative law judges may not declare a statute or regulation unconstitutional nor refuse to apply or follow the statute or regulation.  45 C.F.R. § 150.403(c); see Fady Fayad, M.D., DAB No. 2266 at 14 (2009), aff'd sub nom. Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011); Sligo Creek Ctr., DAB No. 3191 at 41-42 (2025).

Moreover, even if I could consider the issue, I doubt that Jarkesy precludes administrative review here.  As the Departmental Appeals Board has pointed out, Jarkesy involved "an enforcement action" by the Securities and Exchange Commission (SEC).  Sligo Creek, DAB No. 3191 at 41-42.  The SEC brought the action seeking CMPs from an investment advisor company and its individual manager for alleged securities fraud, Jarkesy, 603 U.S. 109, 115.  The Supreme Court decided that the Seventh Amendment to the Constitution does not permit the SEC to compel respondents to defend themselves before the agency but requires a jury trial in federal court.  Id. at 115, 120-21.  The Court characterized the SEC's efforts to impose CMPs as "a common law suit in all but name" that must be adjudicated in Article III courts.  Id. at 136.

However, the Supreme Court did not hold that every agency's attempt to impose and enforce CMPs equals a common-law suit.  This matter, like Sligo Creek, involves an "entirely separate statutory and regulatory regime," administered by a different agency.  Further, as the Board observed:

[T]he [Jarkesy] Court acknowledged the long-established "public rights exception" under which "Congress may assign [a] matter for decision to any agency without a jury, consistent with the Seventh Amendment," and

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extensively discussed the Court's precedents applying that exception.  [Jarkesy, 603 U.S.] at 127-132.  The Supreme Court did not decide the potential applicability of that exception to the [Social Security] Act and its implementing regulations concerning imposition and enforcement of CMPs for noncompliance with Medicare participation requirements.

Sligo Creek, DAB No. 3191 at 41.

The Board acknowledged that it could not anticipate how federal courts would apply the Jarkesy reasoning in other situations, such as the "long-standing and complex statutory and regulatory regime governing" CMPs imposed on nursing facilities that did not comply with Medicare participation requirements.  Id. at 41-42.

But that is an issue for a different tribunal.

Conclusion

I am bound by the statute and regulations and may not declare them invalid on constitutional grounds.  I therefore deny Petitioner's motion for remand.