A Maryland Nursing Home Is Asking the Supreme Court to Strip CMS of Its $1.5 Million Fine — and Its Power to Impose Fines Without a Jury

Silver Spring, Maryland — A nursing home that has spent nearly a decade fighting a $1.5 million federal fine is now taking its case to the Supreme Court — and the outcome could reshape how Washington punishes nursing homes.

Sligo Creek Center, a Medicare-participating facility in Montgomery County, filed a petition this week asking the nation’s highest court to take up its challenge to the government’s penalty system. At the center of the fight is a simple question: when a federal agency imposes a seven-figure fine, does the facility get a jury?

The facility’s lawyers say no — and that’s the problem.

A Decade-Long Fight Over One Fine

The dispute traces back to a tuberculosis outbreak roughly ten years ago. The Centers for Medicare & Medicaid Services accused the home of failing to properly monitor the outbreak and violating federal infection-control requirements, then imposed a fine of nearly $1.5 million through its own administrative process.

To pursue further review, the facility paid the fine into escrow — a requirement just to keep its appeal alive. An administrative law judge employed by the agency ruled against the home, and the Department of Health and Human Services’ in-house appeals board affirmed the decision. No judge or jury outside the agency ever weighed the facts.

When the case finally reached a federal court, the Fourth Circuit Court of Appeals upheld the arrangement, holding that the claims involved “public rights” because they flowed from Medicare participation. In practical terms, the ruling meant the facility had no constitutional right to a jury.

The Constitutional Question

The petition leans heavily on the Supreme Court’s 2024 decision in SEC v. Jarkesy, which narrowed the “public rights” exception and reaffirmed that civil penalties generally belong before a jury in an independent court. The legal team argues that receiving Medicare payments through residents is no different from a grocery store accepting food stamps — it doesn’t surrender constitutional rights.

“Federal agencies cannot punish Americans while bypassing the Constitution’s promise of a jury trial,” said Oliver J. Dunford of the Pacific Legal Foundation, which represents the facility free of charge. “Nor may Congress condition access to a federal program on the surrender of constitutional rights.”

What’s at Stake for Operators

A ruling for the facility would force agencies to bring penalty cases before independent juries rather than in-house tribunals where the same agency investigates, prosecutes, and decides the outcome. Given the volume of enforcement actions hitting the industry — including a $1 million settlement over Medicare therapy billing reached just weeks ago — the financial stakes for operators are substantial.

The Supreme Court has not yet said whether it will hear the case.