Federal Court Strikes Down CMS Nursing Home Staffing Mandate

At a Glance

• A federal district court has vacated the Centers for Medicare & Medicaid Services’ (CMS) nursing home staffing mandate, finding the agency exceeded its statutory authority by imposing requirements more burdensome than those Congress has expressly authorized.
• The ruling halts the 24/7 Registered Nurse (RN) requirement and the national staffing formula, but leaves other provisions in the 2024 rule, such as Medicaid transparency rules, intact.
• CMS has not announced whether it will appeal or attempt a revised rule, and some states may pursue their own staffing mandates in the absence of federal standards.
• The decision offers near-term relief but increases long-term uncertainty for providers, investors and lenders.

Background

On April 7, 2025, the U.S. District Court for the Northern District of Texas vacated key provisions of CMS’s final rule establishing minimum staffing requirements for long-term care facilities. The rule would have required the presence of a registered nurse 24 hours a day and set other minimum staffing levels based on the number of residents. At the heart of the decision is a narrow but consequential principle: when Congress has spoken clearly — such as by requiring only eight hours per day of registered nurse coverage — an agency cannot replace that standard with a broader mandate under general regulatory authority.

The court also found that CMS failed to meet statutory requirements to tailor staffing requirements to the needs of each facility’s resident population. The 3.48 hours per resident per day (HPRD) formula, the court held, unlawfully substituted a one-size-fits-all benchmark in place of individualized assessment, contrary to the governing statute.

While the ruling applies specifically to the staffing provisions, it may carry broader implications. In light of recent judicial decisions narrowing deference to agency interpretations, it remains to be seen whether other aspects of CMS’s regulatory framework impacting the senior living and care industry will face similar scrutiny.

Next Steps: Is the Staffing Mandate Gone for Good?

CMS has yet to signal how it will respond to the vacatur. The agency may appeal the ruling or attempt to issue a revised rule that narrows the staffing provisions while better anchoring them in statutory text. CMS Administrator Mehmet Oz expressed during his Senate confirmation hearing that he was open to relaxing the staffing mandate altogether. 

At the same time, states may seek to fill the vacuum. Several — including California, New York and Illinois — already impose independent staffing mandates. Others may view the court’s ruling as a prompt to assert state-level control over workforce standards. For multistate operators, this creates a heightened risk of regulatory fragmentation that could complicate compliance and budgeting efforts. 

Compliance Implications for Providers

The court’s ruling may invite providers to consider dismantling compliance planning or rolling back staffing enhancements made in anticipation of the rule. Yet, even in the absence of a fixed federal staffing floor, the concept of “sufficient staffing” remains alive — embedded in CMS survey protocols, quality assurance and performance improvement (QAPI) expectations, and False Claims Act enforcement theories. Providers that can demonstrate deliberate, acuity-based staffing strategies are more likely to withstand scrutiny from regulators, auditors and plaintiff’s counsel alike. Particularly in the wake of a high-profile regulatory shift, public and regulatory scrutiny may increase, not recede.

Rather than reflexively rolling back staffing changes, providers may consider ensuring the defensibility of their workforce practices. That means retaining acuity-driven assessments, documenting key workforce decisions, and continuing smart workforce investments — particularly where care quality or state surveyors demand it. 

Investor and Lender Considerations

The court’s decision removes a significant regulatory cost driver from near-term projections, particularly for facilities already struggling with workforce shortages or constrained operating margins. But the legal and policy landscape remains unsettled. Whether through appeal, new federal rulemaking or state-driven efforts, staffing mandates are likely to resurface in some form — and potentially with greater fragmentation across jurisdictions.

For investors and lenders, assessing staffing adequacy may need to be more nuanced than it would have been under the bright-line test under the proposed rule. Lenders seeking to finance long-term care facilities should focus on whether an operator has scalable staffing models, documented acuity-based staffing plans, and internal controls that can withstand evolving standards. Lenders should also track whether key states are planning to backfill the vacated federal mandate. Well-positioned senior living and care platforms will treat this moment as an opportunity to harden their compliance posture, not to relax it.

Conclusion

The CMS staffing rule was ambitious in scope, and its invalidation will be seen by some as a victory for operational autonomy and by others as a missed opportunity for workforce reform. But whatever the policy perspective, the legal implications are clear: in a post-Chevron world, agencies cannot rewrite statutes under the banner of guidance. 

The implications for providers and investors are less settled. Amidst the regulatory uncertainty, stakeholders should resist making sweeping operational and strategic changes, remaining ready and flexible if CMS or state regulators move forward with alternative polices. In the meantime, providers should continue investing in defensible staffing practices and documenting care adequacy tied to resident needs.