Medicare Penalty Case Highlights the Regulatory Reality of Long-Term Care: Lessons for Elder Care and Government Oversight

A recent federal court decision in New York offers a clear window into how Medicare actually operates, not as a traditional health care system that delivers services to seniors, but as a vast federal regulatory regime that happens to pay for care. The case, NCRNC, LLC v. Kennedy (N.D.N.Y. Jan. 20, 2026), involved a Medicare-participating nursing home fighting a civil monetary penalty imposed by the Centers for Medicare & Medicaid Services (CMS). The facility asked a federal district court for a jury trial under the Seventh Amendment. The court said no, and in doing so, handed elder-care providers, families, and advocates a blunt reminder of where real power lies in long-term care.The Case at a GlanceThe nursing home received a penalty for alleged noncompliance with federal participation requirements. Rather than go through the agency’s administrative process, it sued in district court seeking to block collection and arguing it was constitutionally entitled to a jury. The court dismissed the complaint for lack of subject-matter jurisdiction and rejected the Seventh Amendment claim outright.
Applying the public-rights doctrine, the judge explained that there is no common-law counterpart to a government-imposed monetary penalty tied to conditions for receiving public funds. Medicare participation is a regulated privilege, not a contractual right. Because the dispute arises from the government’s oversight of its own spending program, traditional courtroom protections, including the right to a jury, do not apply. Instead, challenges must travel the statutory administrative channel: administrative law judge, Departmental Appeals Board, and then directly to the U.S. Court of Appeals.The Real Lesson for Elder CareThis ruling is not just a procedural footnote for nursing-home operators. It reveals the fundamental architecture of Medicare’s relationship with long-term care providers, and, by extension, with the frail elders who depend on them:

• Government oversight is deliberately administrative-first and one-sided.

CMS and state survey agencies can issue penalties, threaten program termination, or suspend operations with limited immediate judicial oversight. The system is engineered for speed and control: the regulator acts, the provider defends later, and even that defense occurs inside the agency’s own framework.

• Facilities operate under a regulatory “license,” not a consumer-service contract.

Accepting Medicare (and intertwined Medicaid) dollars means stepping into a legal regime where the government sets the rules, enforces them, and largely decides disputes. Traditional due-process protections that Americans expect in ordinary lawsuits, such as full discovery, independent fact-finders, and jury trials, are stripped away in favor of administrative efficiency and taxpayer protection.

• Residents bear the downstream consequences.

When a facility faces heavy monetary pressure, the ripple effects are felt at the bedside. Staffing may be trimmed, capital improvements delayed, or non-mandated services cut. Families rarely see the survey deficiencies or penalty notices, yet they live with the impact on quality of care and the ability of loved ones to age in place safely and with dignity.

In short, NCRNC confirms what many in elder law have observed for years:  Medicare is first and foremost a legal and regulatory system that governs health care, not a health care system that confers robust rights and privileges to participants. A true consumer-oriented health care system would treat providers and beneficiaries as rights-bearing parties in a service relationship. Medicare treats them as regulated entities subject to conditions the government can enforce with broad discretion and narrow procedural safeguards.

Why This Matters for Families and Aging-in-Place AdvocatesSeniors and their families often assume that Medicare and Medicaid function like private insurance — that if care is needed, the system will deliver it fairly and that participants have meaningful recourse when things go wrong. This case shatters that assumption. It shows that the rights of both facilities and the residents they serve are limited to what Congress and the agencies choose to grant, and those rights are deliberately narrow.
For elder-law attorneys and aging-in-place advocates, the takeaway is practical:

• Proactive compliance and documentation are essential. Facilities must treat every survey as a high-stakes regulatory proceeding, not merely a clinical review. Thorough records, immediate corrective-action plans, and early legal involvement can make a difference in the administrative process.
• Families should monitor quality indicators closely. When penalties or deficiencies surface, they often signal potential changes in staffing or services. Working with long-term care ombudsmen, reviewing public quality data, and having contingency placement plans can help protect aging loved ones.
• Expect limited judicial relief. Direct lawsuits in district court are almost always dismissed in favor of the administrative channel. Constitutional arguments, while sometimes useful for leverage or legislative advocacy, rarely succeed at the trial level in this context.

The Bottom LineNCRNC, LLC v. Kennedy is a textbook illustration of how Medicare’s enforcement machinery prioritizes regulatory control over traditional legal protections. For those invested in high-quality elder care, the decision underscores a hard truth: the best safeguards for aging in place often lie outside the courtroom — in careful facility selection, advance planning, vigilant family oversight, and advocacy within the system as it actually exists.
We will continue tracking these regulatory developments because they directly shape the daily reality of long-term care. In the meantime, if you or a loved one relies on Medicare- or Medicaid-funded nursing-home care, the clearest protection remains early, informed planning with an elder-law attorney who understands both the clinical needs and the regulatory minefield. The system may be legal first and health-care second — but knowing that reality is the first step toward navigating it successfully.

Ohio Department of Aging Warns of Scam Calls Targeting Golden Buckeye Participants

The Ohio Department of Aging (AGE) is alerting Ohioans to reports of a phone scam in which individuals falsely claim to represent the Golden Buckeye program.

Residents have reported receiving unsolicited calls from scammers seeking personal information, including protected data such as Social Security numbers. These calls are not from the Ohio Department of Aging.

“This is a phishing attempt. Do not share your personal information with anyone who contacts you claiming to be from the Golden Buckeye program,” said AGE Director Ursel J. McElroy. “The Golden Buckeye program will never call, text, or email you to request personal or financial information.”

Ohioans can report scam attempts to the Federal Trade Commission or to the Ohio Attorney General's Office.  Anyone who believes they may have been a victim of this scam should contact their local law enforcement agency.

If you or a loved one is preparing for long-term care and considering Medicaid to help cover nursing home or in-home care costs, a recent federal appeals court decision could significantly affect your options. In Lancaster v. Cartmell (10th Cir., Dec. 23, 2025), the court ruled that the Medicaid Act does not give individuals a private right to sue state agencies in federal court when their benefits are wrongly denied.

The Facts of the Case
Max and Peggy Lancaster, an elderly Oklahoma couple, transferred $3.8 million in assets to a limited liability company (LLC) owned by their three adult children. In exchange, the LLC gave them a promissory note, mortgages, and personal guarantees. When the Lancasters later applied for Medicaid, the state denied their applications because the promissory note was counted as an available asset that pushed them over the eligibility limit.
The couple sued the state Medicaid agencies under 42 U.S.C. § 1983, claiming the denial violated the Medicaid Act’s requirement that eligible individuals receive benefits with “reasonable promptness.” They argued they had a private right to enforce that provision in federal court.The Court’s Decision
The Tenth Circuit Court of Appeals disagreed. Relying on the U.S. Supreme Court’s 2025 decision in Medina v. Planned Parenthood South Atlantic, the court held that the Medicaid Act’s “reasonable promptness” provision (42 U.S.C. § 1396a(a)(8)) does not create an individually enforceable right that beneficiaries can sue to protect.
If your Medicaid application is denied or delayed, you generally cannot file a federal lawsuit against the state agency. You must instead go through the state’s internal administrative appeal process.
The court emphasized that Medicaid is a spending-power statute between the federal government and the states. The usual remedy for violations is for the federal government to withhold funding from the state, not for individual beneficiaries to sue.Aging-in-Place Planning and Elder Law Planning Implications
This ruling tightens the rules for Medicaid eligibility challenges nationwide (at least in the Tenth Circuit, and likely influencing other courts). For families planning ahead:

• Asset transfers and promissory notes are under even greater scrutiny. Strategies that rely on loans or notes to “spend down” assets may be counted as resources, leading to denials.
• Fewer legal protections if the state makes a mistake. Without the ability to go straight to federal court, families may face longer delays and more limited remedies.
• Stronger need for proactive planning. Once you apply for Medicaid, your options to fight a denial in court are now narrower. The best defense is careful planning before you need benefits.
• Aging-in-Place Planning Shines:  Planning to age in place and avoid institutional care completely, with its attendant risks and costs, shines as a superior plan.  

Practical Takeaways for Families

• Plan early: Ideally 5 years before you anticipate needing care. Work with an elder law attorney to structure asset transfers, trusts, or other strategies that comply with current Medicaid rules.

• Understand the appeals process: If you’re denied, request a fair hearing promptly. Time limits are strict, and you’ll need strong documentation.

• Document everything: Keep clear records of all transfers, notes, and communications with the state agency.

• Consider alternatives:  Long-term care insurance, veterans’ benefits, hybrid life insurance policies, Medicare Advantage Plans, Private Caregiver Agreements, and Hybrid Annuities can reduce reliance on Medicaid and give you more control over your aging-in-place options.

Bottom LineThe Lancaster decision reinforces that Medicaid is a complex, state-run program with limited federal-court protections for applicants. For seniors who want to stay in their homes as long as possible or protect assets for a spouse, this makes professional elder law planning more important than ever.
If you’re concerned about Medicaid eligibility, nursing home costs, or protecting your home and savings while aging in place, don’t wait until a crisis hits. Schedule a consultation with a qualified elder law attorney. A small investment in planning today can save your family tens or hundreds of thousands of dollars and give you peace of mind tomorrow.