The Chief is in an uproar about it -- clearly he has not watched the last couple of seasons of the show. George trails after him, apparently still his intern. In fact I'll just jump in right now and point out that this episode seems to take place not long after the season 4 finale, but because TV is magical they do reference the fact that it's now fall in Seattle. George wants to know what it means that they've also been downgraded from a Level 1 to a Level 2 trauma center. The Chief silences him with a glare.
George runs off to the locker room and tells Lexie that with all that is going on he can't ask the Chief when he'll be re-taking his intern exam and that this could mean it gets sprung on him with only an hour's notice. Lexie assures him he'll be ready while quizzing him with The Cards. She doesn't notice his answer because she's busy breathing in a whiff of him with her eyes closed dreamily. I could be wrong, but I figure that after working all day in a hospital everyone is going to just smell of Eau de Antiseptic. He wonders what's up and she covers badly by noting the falling snow outside and calling it a fairy tale. George corrects her that snow in the fall is just a sign of global warming, or maybe the apocalypse, which could also mean that he's going to fail his test. After he leaves, Lexie tells the door, "I adore you, by the way." You know, just in case we hadn't picked up on that yet.
She runs up to join the other interns following behind Cristina and Mere, and Cristina cuts off Lexie's apology by telling her there's no talking unless it's medical. Mere of course then tells Cristina she keeps having the death dream about Derek, and after dismissing her interns with a flick of her wrist, Cristina announces that only losers do their residencies at the number 12 teaching hospital, and she's not a loser. Mere starts babbling about how clearly this means she's afraid, but Cristina cuts her off to remind everyone she has a PhD in biochem, which makes her a double doctor, and double doctors shouldn't be doing their residencies at #12 hospitals. Mere says this means she has to face her fear and announces that she's going to have Derek move in with her; Cristina rolls her eyes at the babble and then muses about leaving for a program at the Cleveland Clinic. Mere says they are still top 12, which is "pretty good" but Cristina wants "great." Mere uses that as an invite to go back to her favorite topic, herself, and says that is why she's going to ask Derek to move in with her. I don't follow the logic. Mere keeps babbling about how much she's messed things up and of course somehow needs to mention sleeping with George, which horrifies Lexie who has been walking behind them. Cristina still won't allow any non-medical talk so Lexie can't get the details. Mere asks Cristina if she thinks asking Derek to move in is the right thing, but Cristina is saved by their pagers simultaneously beeping. Lexie tries to ask Cristina about the sex in a medical manner but of course only gets a Look for her efforts.