SunBridge Care and Rehabilitat v. Michael Leavitt

Filing 920090722

UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 08-1603

SUNBRIDGE CARE AND REHABILITATION FOR PEMBROKE, Petitioner, v. MICHAEL O. LEAVITT, Secretary of the Department of Health & Human Services; DEPARTMENT OF HEALTH & HUMAN SERVICES, Respondents. United UNITED States STATES

On Petition for Review of an Order of the Department of Health & Human Services. (A-08-7)

United

States

Argued:

March 26, 2009

Decided:

July 22, 2009

Before MOTZ and AGEE, Circuit Judges, and Thomas D. SCHROEDER, United States District Judge for the Middle District of North Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, PLC, Arlington, Virginia, for Petitioner. Erica Cori Matos, UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, Atlanta, Georgia, for Respondents. ON BRIEF: Peter D. Keisler, Assistant Attorney General, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Thomas R. Barker, Acting General Counsel, Dana J. Petti, Chief Counsel, Region IV, UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, Atlanta, Georgia, for Respondents.

Unpublished opinions are not binding precedent in this circuit.

2

PER CURIAM: SunBridge Care and Rehabilitation ­ Pembroke ("SunBridge"), a skilled nursing facility that provides care to Medicare and Medicaid beneficiaries in North Carolina, appeals the final

decision by the Secretary of the U.S. Department of Health and Human Services ("HHS") to assess civil monetary penalties for its failure to comply with certain federal health and safety regulations. Medicaid An agency of HHS, made the the Centers initial for Medicare & of

Services

("CMS"),

determination

non-compliance and assessed the civil monetary penalties.

These

determinations were upheld by both an Administrative Law Judge ("ALJ") and the Departmental Appeals Board ("DAB"). reasons set forth below, we affirm. For the

I. SunBridge is a skilled nursing facility located in

Pembroke, North Carolina. undertakes is to

Among the responsibilities SunBridge its wheelchair-bound residents to

transport

various medical appointments in a van owned and operated by the facility. The van is specially equipped, including with safety

belts, to ensure that the residents remain in their wheelchairs while being transported. On August 8, 2005, a Sunbridge van was transporting a

resident ("Resident 1") when the driver made a sudden traffic 3

stop.

Although

the

parties

disagree

as

to

what

actually

happened, Resident 1 either slipped out of his wheelchair or was thrown against the safety belt. his arm and shoulder. He suffered minor injuries to

His wife, who was following the van in

her car, claims that she saw "her husband going head first out of the wheelchair" and found him on the floor of the van with no safety belt on and with the wheelchair resting on top of him. (Admin. R. ("A.R.") 842.) On March 3, 2006, another Sunbridge van driver noticed that an 84-year-old resident she was transporting ("Resident 3") had slid out of her wheelchair onto the van floor. 1 The driver

stopped the van and attempted to return the resident to her wheelchair but, when unable to do so, called the Sunbridge nurse on duty. The on-duty nurse instructed the driver to leave

Resident 3 on the van floor, place a pillow under her head, cover her with a blanket, and return to the facility ­ which the driver did. Resident 3 was transferred to the hospital by

ambulance and, while being examined for a broken leg, died of an apparent cardiac event. In May 2006, these accidents became the subject of an

investigation when the North Carolina Department of Health and

The administrative record also includes complaints involving Resident 2, which are not relevant to this appeal.

1

4

Human

Services

("NC

HHS")

responded

to

a

complaint

about

SunBridge.

Through a contract with CMS, NC HHS investigated

these two events as part of a survey of Sunbridge's compliance with federal health and safety regulations. 2 42 C.F.R. § 488.10(a)(1). 42 U.S.C. § 1395aa;

Under the applicable regulations, NC

HHS must identify any deficiencies, determine their seriousness, and recommend a remedy to address them. 3 42 C.F.R. §§

488.404(b), 488.408. Following the survey, NC HHS issued a Statement of

Deficiencies in which it determined that SunBridge was not in substantial compliance with two health and safety regulations, As part of the Medicare and Medicaid programs, SunBridge must substantially comply with the health and safety requirements set forth in the Social Security Act and implementing regulations. 42 U.S.C. § 1395i-3(a)-(d); 42 C.F.R. §§ 483.1-483.75. To ensure that a facility fulfills those requirements, HHS conducts surveys on a regular basis, as well as in response to complaints about a facility. 42 U.S.C. § 1395i-3(g); 42 C.F.R. §§ 488.308, 488.332. Although CMS administers the Medicare and Medicaid programs, MacKenzie Med. Supply, Inc. v. Leavitt, 506 F.3d 341, 343 (4th Cir. 2007), HHS may contract with state entities to conduct a survey. 42 U.S.C. § 1395aa; 42 C.F.R. § 488.10(a)(1). The degree of seriousness ranges from deficiencies that result in "[n]o actual harm with a potential for minimal harm" to those that pose "[i]mmediate jeopardy to resident health or safety." 42 C.F.R. § 488.404(b)(1). A facility is deemed to be in substantial compliance with the health and safety regulations if its deficiencies "pose no greater risk to resident health or safety than the potential for causing minimal harm." 42 C.F.R. § 488.301. Potential remedies include a civil monetary penalty, which CMS may assess on a "per day" or "per instance" basis. 42 U.S.C. § 1395i-3(h)(2)(B)(ii); 42 C.F.R. §§ 488.430, 488.438(a).
3 2

5

one governing accident hazards, 42 C.F.R. § 483.25(h)(1), and one governing administration, 42 C.F.R. § 483.75. that Sunbridge's non-compliance posed "immediate NC HHS found jeopardy to

resident health or safety" from March 6, 2006, to May 11, 2006, and less than immediate jeopardy from May 12, 2006, to June 19, 2006. Among other remedies, NC HHS recommended, and CMS

ultimately assessed, civil monetary penalties against SunBridge of $4,000 per day for the period of immediate jeopardy and $50 per day for the period of non-immediate jeopardy, totaling

approximately $270,000. SunBridge requested a hearing on CMS's determination. C.F.R. § 498.40. 42

On June 5, 2007, an ALJ heard the matter and In sum, the ALJ held

subsequently affirmed the determination.

that (1) SunBridge failed to comply substantially with 42 C.F.R. § 483.25(h)(1) because it misused the van's safety belts while transporting residents in wheelchairs; (2) SunBridge failed to comply substantially with 42 C.F.R. § 483.75 because it did not adequately investigate the accidents or ensure that staff

members followed the prescribed emergency procedures; (3) the finding of immediate jeopardy was not clearly erroneous; and (4) the amount of the civil monetary penalties was reasonable. On

October 9, 2007, SunBridge appealed the ALJ's decision to the DAB, which affirmed for essentially the same reasons.

6

SunBridge timely petitioned this court for review. purposes, decision. We the DAB's decision constitutes the final

For our agency

42 U.S.C. § 1320a-7a(e); 42 C.F.R. § 498.90(c)(1). jurisdiction pursuant to 42 U.S.C. §§ 1395i-

exercise

3(h)(2)(B)(ii) and 1320a-7a(e).

II. In the petition for review, SunBridge raises four issues: 4 (1) whether (2) HHS has the HHS authority applied the to regulate improper to motor vehicle

travel;

whether

an

burden-shifting demonstrate of its the that HHS

framework compliance evidence; SunBridge

that with (3) was

required the

facility by a

regulations substantial

preponderance

whether not in

evidence

demonstrates with the

substantial

compliance

regulations; and (4) whether the civil monetary penalties were upheld on grounds other than those identified by CMS. 5

Though SunBridge's briefing incorporated argument in its lengthy Statement of Facts, we address only those arguments contained in the argument section itself. Fed. R. App. P. 28(a)(9)(A) (requiring the argument section of the opening brief to contain the "appellant's contentions and the reasons for them"). In the final decision, the DAB also rejected SunBridge's argument that the determination of immediate jeopardy was clearly erroneous. SunBridge waives this claim on appeal because it failed to raise the claim in its opening brief. Fed. R. App. P. 28(a)(9)(A). The argument was readily available at the time of briefing, United States v. Leeson, 453 F.3d 631, 638 (Continued) 7
5

4

A. SunBridge argues that HHS lacks the authority to regulate motor vehicle travel. the Social Security mention Although SunBridge correctly notes that Act motor and 42 C.F.R. this § 483.25 has do not

specifically held that

vehicles, interpreted of

court

recently to

HHS the for

reasonably issuance violations

section to the

483.25(h)(1) skilled use of

authorize facilities vehicles.

citations arising from

nursing motor

Liberty Nursing & Rehab. Ctr. ­ Mecklenburg County v.

Leavitt, 294 F. App'x 803, 804 n.2 (4th Cir. 2008) (per curiam) (holding that this regulation should be "interpreted as broadly as is necessary to protect residents in all locations under the

n.4 (4th Cir. 2006), yet Sunbridge mentioned it only in the reply brief. United States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 356 n.8 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999)). The Government's only mention of this issue consists of a two-page summary of the DAB's conclusions. Thus, the Government would be prejudiced by the consideration of this issue because it lacked an adequate opportunity to respond. Cavallo v. Star Enter., 100 F.3d 1150, 1152 n.2 (4th Cir. 1996) (holding that consideration of an issue first argued in the reply brief "would be unfair to the appellee and would risk an improvident or ill-advised opinion on the legal issues raised" (internal quotation marks and citation omitted)). Even if we deem SunBridge to have properly raised the immediate jeopardy argument, we note that this argument lacks merit. The determination of "immediate jeopardy" was not clearly erroneous because the record contains substantial evidence that SunBridge's noncompliance with the health and safety regulations "caused, or . . . [was] likely to cause, serious injury, harm, impairment, or death to a resident" under 42 C.F.R. § 488.301.

8

facility's control, including facility vehicles" and that "[i]t would be incongruous to hold that residents travel at their own risk when the facility to which they have entrusted their care transports them off-site"). We find that reasoning and

conclusion equally applicable here. 6 SunBridge argues that this interpretation deprived it of notice and due process. We disagree. SunBridge had sufficient

notice because the statute and section 483.25(h)(1) are broad enough to encompass motor vehicle travel. Due process was

afforded because Sunbridge participated in a hearing before the ALJ and an appeal before the DAB. B. SunBridge contends that HHS applied an improper burden-

shifting framework that required the facility to demonstrate its compliance evidence. with the regulations by a preponderance of the

SunBridge argues that this framework violates the

Administrative Procedure Act ("APA"), which generally places the ultimate burden of proof on "the proponent of a rule or order." 5 U.S.C. § 556(d).

We do not accord precedential value to our unpublished opinions, see Collins v. Pond Creek Mining Co., 468 F.3d 213, 219 (4th Cir. 2006), and certainly not to those of other courts. In this case, involving an area of the law in which few courts have published opinions, we cite unreported opinions simply to demonstrate that other courts share our own views on the legal questions presented; we do not cite them as precedent.

6

9

A

burden-shifting

framework

applies

to

cases

involving

alleged noncompliance with HHS regulations, Hillman Rehab. Ctr. v. Health Care Fin. Admin., DAB No. 1611, 1997 HHSDAB LEXIS 547, at *12-13 (1997), aff'd sub nom. Hillman Rehab. Ctr. v. U.S. Dep't of Health and Human Servs., No. 98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999), as well as to the assessment of civil monetary penalties. Cross Creek Health Care Ctr. v.

Health Care Fin. Admin., DAB No. 1665, 1998 HHSDAB LEXIS 65, at *25-26 (1998). CMS initially bears the burden of making out a

prima facie case that it has a legally sufficient basis for its action. Hillman, 1997 HHSDAB LEXIS 547, at *12. If CMS makes

out a prima facie case, the burden shifts to the provider to "com[e] forward with evidence sufficient to establish the

elements of any affirmative argument or defense." The facility "bears the ultimate burden of

Id. at *13. persuasion[,]"

proving "by a preponderance of the evidence on the record as a whole that it is in substantial compliance with the relevant statutory and regulatory provisions." Id.

Nevertheless, this burden-shifting framework operates only when the evidence stands in equipoise. Century Care of the

Crystal Coast v. Leavitt, 281 F. App'x 180, 184 n.1 (4th Cir. 2008) (per curiam) (citing Fairfax Nursing Home, Inc. v. U.S. Dep't of Health & Human Servs., 300 F.3d 835, 840 n.4 (7th Cir. 2002)). In this case, as discussed below, the evidence is not 10

in equipoise because the record contains substantial evidence of SunBridge's noncompliance with the regulations. Consequently,

the burden-shifting framework does not apply to these facts, and we need not address whether it violates the APA. C. SunBridge next challenges the findings of fact underlying HHS's conclusion that Sunbridge was not in substantial We accept as

compliance with the health and safety regulations.

conclusive HHS's findings of fact "if supported by substantial evidence on the record considered as a whole." 1320a-7a(e). a reasonable 42 U.S.C. §

Substantial evidence is "such relevant evidence as mind might accept as adequate to support a

conclusion."

Richardson v. Perales, 402 U.S. 389, 401 (1971) "It consists of

(internal quotations and citation omitted).

more than a mere scintilla of evidence but may be somewhat less than a preponderance." (4th Cir. 1966). 1. SunBridge contends that HHS failed to identify substantial evidence demonstrating a violation of 42 C.F.R. § 483.25(h)(1), which requires a facility to "ensure that . . . [t]he resident environment remains as free of accident hazards as is possible." We conclude that there is ample evidence that SunBridge was not in substantial compliance with 11 this regulation because staff Laws v. Celebrezze, 368 F.2d 640, 642

members improperly fastened the safety belts of residents in wheelchairs. First, properly the record buckled shows to the that the safety belts worked

when

floor

behind

the

wheelchair.

Several technical bulletins, photographs, and figures, including some submitted by SunBridge itself, indicate that the safety belts, which were attached to the van sidewall, should be

strapped across the resident's lap and then buckled onto the floor behind the wheelchair. In this fashion, the belt secures A member of the NC HHS both the Statement of

both the wheelchair and the resident. survey team also indicated, in

Deficiencies and her testimony before the ALJ, that she watched a SunBridge staff member demonstrate how a resident could not slide out of a wheelchair if the safety belt was buckled behind the wheelchair. By contrast, the demonstration also showed that

if the safety belt was buckled in front of the wheelchair, a resident could not be secured across the waist and therefore could slide out of the wheelchair. Furthermore, SunBridge

produced no evidence that the safety belts worked properly when buckled in front of the wheelchair. Second, substantial evidence shows that SunBridge staff

members routinely buckled the safety harnesses in front of the wheelchair. The NC HHS surveyor indicated that she watched

SunBridge perform a safety demonstration during which a driver 12

buckled surveyor

the also

safety noted

belt that

in a

front driver

of had

the

wheelchair. that

The safety

admitted

harnesses could not be buckled behind the wheelchairs whenever at least four wheelchairs were in the van, which occurred at least three times evidence per week. staff SunBridge members also proffered safety no

documentary

that

buckled

belts

behind wheelchairs or were trained specifically on the use of safety belts for wheelchair-bound residents. Finally, Sunbridge argues that there is not substantial Me.

evidence that the harm to the residents was foreseeable. Veterans' Servs., Home ­ Scarborough 1975, 2005 v. Ctrs. for Medicare 54, at

Medicaid (2005)

DAB

No.

HHSDAB

LEXIS

*11

(holding that the regulation regarding accidents applies only to those risks of harm that are forseeable). To determine whether

a facility has complied with section 483.25(h)(1), a court may "evaluat[e] whether the facility has addressed foreseeable risks by identifying and removing hazards, where possible, or, where the hazard is unavoidable because of other resident needs,

managing the hazard by reducing the risk of accident to the extent possible." Substantial Id. at *17-18. evidence indicates that SunBridge failed to

address the foreseeable risk that the misuse of the safety belts posed to residents in wheelchairs. SunBridge should have known

to conduct an investigation into the use of the safety belts 13

because the wife of Resident 1 reported to SunBridge, via a social worker, that she had witnessed "her husband going head first out of the wheelchair" and had seen "the wheelchair on top of her husband, who didn't have a seat belt on." SunBridge also should the have known to engage (A.R. 842.) in such 3, an who

investigation Sunbridge

after

accident in

involving

Resident

admits

slid

down

her

wheelchair.

SunBridge's

claims that the DAB imposed "per se regulatory liability" or "strict liability" for the accidents are meritless. Substantial

evidence shows that the risk was foreseeable because SunBridge could have identified it either through a routine demonstration of the safety belts or through adequate investigations into the accidents involving Residents 1 and 3. 2. SunBridge argues that CMS offered no evidence to support a violation of 42 C.F.R. § 483.75, which requires a facility to "use its resources the effectively and efficiently physical, to attain or and

maintain

highest

practicable

mental,

psychosocial well-being of each resident."

"[A]n administrative

deficiency is a derivative finding, based on the presence of other deficiencies." Century Care, 281 F. App'x at 186; accord

Asbury Ctr. v. U.S. Dep't of Health & Human Servs., 77 F. App'x 853, 857 (6th Cir. 2003). In this case, as discussed above,

14

there is substantial evidence that SunBridge violated section 483.25(h)(1), governing accidents. The record also contains substantial evidence that

SunBridge was not in substantial compliance with section 483.75. In particular, SunBridge failed to adequately investigate the accidents involving Residents 1 and 3. manual directs supervisors to Sunbridge's corporate investigate the

"immediately

accident to determine the . . . cause" and to take steps "to eliminate that the cause." (A.R. it 449.) merely Although SunBridge a few

investigated

accidents,

interviewed

witnesses and examined whether the safety belts were in working order. These investigations were inadequate because they did

not inquire whether staff members used the safety belts properly for wheelchair-bound residents and did not identify the cause of the accidents. There is also substantial evidence that SunBridge failed to follow prescribed emergency procedures. manual requires drivers to be trained SunBridge's corporate "on how to report an

accident and what to do at the scene."

(A.R. 449.)

This manual

also prohibits drivers from moving injured persons "if likely to cause further injury." (A.R. 449.) Despite the manual's

training requirements, the record indicates that some employees were ignorant of such emergency procedures. Furthermore, there

is evidence that the driver and the on-duty nurse disregarded 15

those emergency procedures after the accident involving Resident 3. Contrary to the prohibition against moving injured persons,

the driver attempted to return Resident 3 to her wheelchair. When this attempt proved unsuccessful, the driver called the onduty nurse. The on-duty nurse, without having examined Resident

3 personally to determine the extent of her injuries, instructed the driver to leave the resident on the floor of the van, place a pillow under her head, cover her with a blanket, and return to the facility. Thus, we find there was substantial evidence to

support a violation of 42 C.F.R. § 483.75. D. Finally, SunBridge contends that HHS violated the APA and ignored relevant case law by upholding the assessment of the civil monetary penalties 7 on theories other than those identified in the Statement of Deficiencies or presented by CMS. this contention to be without merit. SunBridge claims that it lacked timely notice of the We find

alleged deficiencies, as mandated by the APA.

The APA "requires Rapp v.

procedural fairness in the administrative process."

U.S. Dep't of Treasury, 52 F.3d 1510, 1519 (10th Cir. 1995). Section 554(b)(3) provides that "[p]ersons entitled to notice of

SunBridge does not challenge monetary penalties in this appeal.

7

the

amount

of

the

civil

16

an agency hearing shall be timely informed of . . . the matters of fact and law asserted." 5 U.S.C. § 554(b)(3); see Clearwater An a

Finishing Co. v. NLRB, 670 F.2d 464, 468 (4th Cir. 1982). agency contravenes different this from notice any provision is if it sustains on

violation

that

clearly

listed

the

charging document.

See, e.g., Bendix Corp. v. FTC, 450 F.2d

534, 542 (6th Cir. 1971) ("an administrative agency must give a clear statement of the theory on which a case will be tried"). Notice is sufficient as long as the party "is reasonably St.

apprised of the issues in controversy[] and is not misled."

Anthony Hosp. v. U.S. Dep't of Health and Human Servs., 309 F.3d 680, 708 (10th Cir. 2002) (internal quotation marks and

citations omitted); accord Harman Mining Co. v. Layne, No. 971385, 1998 U.S. App. LEXIS 21109, at *23 (4th Cir. Aug. 27, 1998). To establish a violation of this provision, a party must

demonstrate that it did not fully and fairly litigate the issue at the hearing and suffered prejudice from the allegedly

insufficient notice.

St. Anthony Hosp., 309 F.3d at 708; Yellow

Freight Sys., Inc. v. Martin, 954 F.2d 353, 358 (6th Cir. 1992). SunBridge claims that the ALJ overstepped his authority by introducing his own novel theory for the deficiencies in his decision, depriving it of the timely notice required by section

17

554(b)(3). 8

SunBridge asserts that CMS based the deficiency

finding on a failure to provide supplemental lap belts yet the ALJ upheld the civil monetary penalties based on the alleged misuse of the existing safety belts in the van. As proof that

CMS relied on the absence of supplemental lap belts for the deficiency compliance finding, plan SunBridge claims that CMS accepted and use a of

requiring

the

installation

supplemental lap belts. We disagree with Sunbridge's characterization and find that the Statement of Deficiencies satisfies the notice provision of the APA. SunBridge residents" The Statement of Deficiencies clearly indicates that "failed and to provide remain safe out transportation of compliance for with 2 of 2

would

section

483.25(h)(1) until it implemented a method that would "safely secure residents for transportation." (J.A. 6.) Furthermore,

In the Statement of Facts, SunBridge also claims that counsel for CMS introduced a novel theory for the administration deficiency at the hearing by alleging a deficiency based on the inadequacy of Sunbridge's emergency procedures. SunBridge complains that this deficiency was not raised in either the Statement of Deficiencies or the prehearing pleadings and only arose in CMS's opening statement at the hearing. Although SunBridge neglected to raise this particular claim in the argument section of the opening brief, we consider it because it relates to the notice issue. Nevertheless, we reject this argument because the Statement of Deficiencies manifestly provides adequate notice inasmuch as it states that SunBridge's staff members were not properly trained "on procedures to follow at the time of an emergency." (J.A. 25.)

8

18

the Statement of Deficiencies describes two specific incidents that involved wheelchair-bound residents who were not securely buckled into the SunBridge van and notes that staff members were uncertain of the proper method for buckling wheelchairs into the van. Contrary to SunBridge's claim, the Statement of

Deficiencies never identifies the absence of supplemental lap belts as the basis of the deficiency. Deficiencies provided SunBridge with Thus, the Statement of adequate notice that

improper use of the safety belts was the basis of the accident hazard deficiency.

III. For affirmed. AFFIRMED the foregoing reasons, the decision of the DAB is

19