Just a day after we highlighted the potential downsides of overregulation of assisted living from the federal level, a case of regulatory overreach involving a nursing home just headed to the U.S. Court of Appeals for the Fourth District in hopes of overturning a $1.8 million civil monetary penalty. Without getting into the minutiae too much, the story originated in 2016, when a spilled cup of coffee that resulted in a “dime-sized” burn on a SNF resident in Virginia led to a surveyor alleging a violation at the “immediate jeopardy” level based on the allegation that, “The facility staff failed to ensure safe coffee temperatures.” Mind you, the survey occurred seven months after the incident, and the resident denied experiencing any pain in almost 300 separate checks in the three months following the spill. In addition, CMS imposed a penalty of $6,550 per day for 272 days as a consequence, even though there was no evidence of any other hot coffee incidents with any other residents.

At the root of this case, the petitioner argues, there is no explicit standard for a safe coffee temperature for nursing homes, unlike with foods like chicken or beef or with bath water. Rather, the surveyor relied on CMS’ “Interpretive Guidelines” to make that new temperature standard and IJ determination, and ultimately the financial penalty that came with it. Not only that, but it appears that the surveyor may have mistook a much larger surgical scar as the burn wound. Yikes. Previous appeal processes upheld the penalty, but the June 2024 Loper Supreme Court decision, which limits an agency’s reasonable interpretation of an ambiguity in a law, may help the petitioner in this latest effort.

We’re glad this case is being made and not settled with CMS, because if regulations like the appropriate temperature for hot beverages can be set by the whims of the surveyor present, that seems like a slippery slope. It has already been a 10-year ordeal for Commonwealth Care, the facility’s owner, but the effort may help many SNFs from further arbitrary regulatory overreach. And it provides a cautionary tale to assisted living stakeholders that may wish for more federal reimbursement and, as a result, national regulatory standards and enforcement of such standards.