Cedar Lake Nursing Home v. HHS

Filing

PUBLISHED OPINION FILED. [10-60112 Dismissed ] Judge: WED , Judge: JES , Judge: LHS Mandate pull date is 11/04/2010 [10-60112]

Cedar Lake Nursing Home v. HHS

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Case: 10-60112

Document: 00511231139

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Date Filed: 09/13/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
September 13, 2010 N o . 10-60112 S u m m a r y Calendar Lyle W. Cayce Clerk

C E D A R LAKE NURSING HOME P e titio n e r v. U N IT E D STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES R espon dent

P e t it io n for Review from the United States Department of Health and Human S e r v ic e s , Departmental Appeals Board

B e fo r e DAVIS, SMITH, and SOUTHWICK, Circuit Judges. W . EUGENE DAVIS, Circuit Judge: I n this petition for review from the Departmental Appeals Board of the U n ite d States Department of Health and Human Services ("DHHS"), Petitioner C e d a r Lake Nursing Home ("Cedar Lake") challenges a $5,000 per-instance civil m o n e ta r y penalty levied by the DHHS against Cedar Lake for violations of 42 C .F .R . § 483.25(h). We reject Petitioner's challenge and DISMISS the petition fo r review. I. C e d a r Lake is a nursing home that participates in the Medicare p r o g r a m . On February 20, 2008, a resident of Cedar Lake designated in the

Dockets.Justia.com

Case: 10-60112

Document: 00511231139

Page: 2

Date Filed: 09/13/2010

No. 10-60112 r e c o r d as "Resident # 10" ­ a 92 year-old woman suffering from a variety of a ilm e n t s ­ wandered away from the facility and was later discovered walking a lo n e along a highway. Witnesses alerted Cedar Lake staff, who returned her t o the facility. Cedar Lake's alarm system, designed to prevent such " e lo p e m e n t s " by residents, did not sound when Resident # 10 opened the door t o leave the facility. Cedar Lake alleges through witness testimony that the a la r m did not sound because an installation contractor responsible for in s t a llin g a new alarm system disconnected the old system without informing C e d a r Lake personnel. A fte r this incident, surveyors affiliated with the Centers for Medicare a n d Medicaid Division ("CMS") of the DHHS conducted a survey of Cedar L a k e and determined the facility to be in violation of several Medicare-related r e g u la tio n s , including 42 C.F.R. § 483.25(h), which requires a nursing home t o "ensure that ­ (1) the resident environment remains as free of accident h a z a r d s as is possible; and (2) each resident receives adequate supervision a n d assistance devices to prevent accidents." Specifically, the surveyors fo u n d that Cedar Lake violated 42 C.F.R. § 483.25(h) with respect to Resident # 10's elopement incident. In response to these findings, CMS imposed a $ 5 ,0 0 0 per-instance civil monetary penalty on Cedar Lake for violations of 42 C .F .R . § 483.25(h). Cedar Lake appealed this decision to an administrative law judge (" A L J " ) and requested a hearing. After briefing, CMS moved for summary ju d g m e n t on the grounds that the undisputed facts presented by the parties s h o w e d that Cedar Lake failed to take all reasonable steps to provide R e s id e n t # 10 with supervision adequate to prevent her elopement in v io la t io n of 42 C.F.R. § 483.25(h).1
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The first ALJ assigned to hear the case, Jose A. Anglada, denied CMS's motion for summary judgment, but this decision was vacated by the second ALJ assigned to the case,

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Case: 10-60112

Document: 00511231139

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Date Filed: 09/13/2010

No. 10-60112 I n ruling on the motion for summary judgment, the ALJ considered C e d a r Lake's main factual presentation: affidavits by two Cedar Lake e m p lo y e e s testifying that the alarm's failure to sound upon Resident # 10's d e p a r t u r e was unforeseeable because the installation contractor had failed to in fo r m Cedar Lake that the alarm had been disconnected. Accepting this t e s t im o n y as true, the ALJ concluded that the remainder of the undisputed fa c t s showed that Resident #10's elopement was foreseeable and that Cedar L a k e did not reasonably provide Resident #10 with enough supervision to p r e v e n t her wandering from the facility. See Cedar Lake Nursing Home, D .A .B . No. CR1967, at 7-8 (June 24, 2009). T h e ALJ's findings of undisputed fact included the following: that R e s id e n t #10 "had a history of wandering, was at high risk for elopement, and r e p e a t e d ly attempted to leave the facility"; that Cedar Lake's care plan for R e s id e n t #10 required staff to place the resident in an area "where constant o b s e r v a t io n is possible"; and that the facility's care plan amendments for R e s id e n t # 10 included frequent observation in addition to the use of a door a la r m .2 Id. at 5-6. On the basis of these undisputed factual findings, the ALJ d e t e r m in e d that Cedar Lake failed to take all reasonable steps to prevent R e s id e n t # 10's elopement in violation of 42 C.F.R. § 483.25(h). The ALJ, t h u s , granted CMS's motion for summary judgment and upheld the $5,000 p e r -in s t a n c e civil monetary fine.

Carolyn Cozad Hughes, after the ALJ Anglada left the agency. All references to "the ALJ" are to ALJ Hughes. The ALJ considered Cedar Lake's argument--which it repeats on this petition for review--that facts derived from Cedar Lake's internal, privileged documents cannot form the basis for a summary judgment motion. But the ALJ concluded that enough of these undisputed facts existed "wholly independent" of Cedar Lake's purportedly privileged documents to support summary judgment. Id. at 9-10.
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Case: 10-60112

Document: 00511231139

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Date Filed: 09/13/2010

No. 10-60112 C e d a r Lake appealed the ALJ's grant of summary judgment to the D e p a r t m e n t a l Appeals Board, which affirmed the ALJ's decision. Cedar Lake n o w seeks review in this Court. II. W e have jurisdiction to review imposition of the civil monetary penalty a g a in s t Cedar Lake pursuant to 42 U.S.C. § 1320a-7a(e). See also 42 C.F.R. § 4 9 8 .5 (c ); § 498.90(a)(1) (2010). Ordinarily, review of such an administrative d e c is io n is conducted according to the deferential standards of the A d m in is tr a t iv e Procedures Act ("APA"), which permits the setting aside of a g e n c y actions, findings, and conclusions that are "arbitrary, capricious, an a b u s e of discretion, or otherwise not in accordance with the law" or " u n s u p p o r t e d by substantial evidence." 5 U.S.C. §§ 706(2)(A)-(E) (2010); see a ls o Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994); Harris C o u n ty Hosp. Dist. v. Shalala, 64 F.3d 220, 221 (5th Cir. 1995).3 P e t itio n e r , however, asserts that we should review this case de novo in a c c o r d with Federal Rule of Civil Procedure 56 because the agency decided t h e case on a motion for summary judgment without having an evidentiary h e a r in g . Petitioner cites a opinion from the Sixth Circuit in which the court c o n d u c t e d de novo review of a summary judgment appealed through the same D H H S process. See Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 7 5 0 (6th Cir. 2004). In that case, the Sixth Circuit applied de novo review w it h o u t expressly considering whether deferential review under the APA was t h e more appropriate standard. Id. at 750. P e t itio n e r 's assertion that we should apply de novo review is ultimately u n a v a ilin g for the reasons discussed by Judge Posner in his recent opinion in

Similarly, 42 U.S.C. § 1320a-7a(e) states that "findings of the Secretary [of the DHHS] with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive."

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Case: 10-60112

Document: 00511231139

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Date Filed: 09/13/2010

No. 10-60112 F a l-M e r id ia n , Inc. v. U.S. Dept. of Health and Human Services, 604 F.3d 445 (7 t h Cir. 2010). Fal-Meridian was an appeal, very similar to present one, in w h ic h the DHHS Departmental Appeals Board approved summary judgment im p o s in g a $7,100 civil monetary penalty on a nursing home for violations of 4 2 C.F.R. § 483.25(h), the same regulation at issue here. Carefully a d d r e s s in g the proper standard of review, Judge Posner wrote that "[t]he a b s e n c e of an evidentiary hearing does not alter the standard of judicial r e v ie w of administrative decisions, set forth in the Administrative Procedures A c t ...." Id. at 449-50. Judge Posner noted that giving heightened deference t o administrative decisions is appropriate, even on appeal from summary ju d g m e n t , because agencies have particular subject-matter experience and e x p e r t is e and "are given more decisional latitude by legislatures than trial c o u r ts are . . . ." Id. This holding is consistent with opinions of other circuit c o u r ts concerning judicial review of decisions made without evidentiary h e a r in g s by agencies other than the DHHS. Id. at 449 (citing Gibson v. SEC, 5 6 1 F.3d 548, 552-53 (6th Cir. 2009); Martex Farms, S.E. v. E.P.A., 559 F.3d 2 9 , 32 (1st Cir. 2009); Hasan v. U.S. Dep't of Labor, 545 F.3d 248, 250-51 (3d C ir . 2008); Cogeneration Ass'n v. FERC, 525 F.3d 1279, 1282-83 (D.C. Cir. 2 0 0 8 )). W e find Judge Posner's reasoning in Fal-Meridian persuasive. Thus, w e review this petition consistent with the deferential standards of the APA, 5 U.S.C. §§ 706(2)(A)-(E). III. R e v ie w in g the findings and conclusions at issue here under the d e fe r e n t ia l standards of the APA, we do not consider them to be arbitrary, c a p r ic io u s , not in accordance with the law, or unsupported by substantial e v id e n c e .

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Case: 10-60112

Document: 00511231139

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Date Filed: 09/13/2010

No. 10-60112 T h e ALJ determined that Cedar Lake's actions with respect to Resident # 10 were in violation of 42 C.F.R. § 483.25(h)(1)-(2), which require a nursing fa c ilit y to ensure that the resident environment remains as free of accident h a z a r d s "as is possible" and that each resident receives "adequate supervision a n d assistance devices to prevent accidents." The standard of care imposed b y these "as is possible" and "adequate supervision" regulations has been c o n s is t e n t ly interpreted by the DHHS and federal courts as a " r e a s o n a b le n e s s " standard. See Fal-Meridian, 604 F.3d at 449; Crestview, 3 7 3 F.3d at 754; Woodstock Care Center v. Thompson, 363 F.3d 589-90 (6th C ir . 2003); see also Kenton Healthcare, LLC, D.A.B. No. CR1666, at 5 (Sept. 2 8 , 2007). B a s e d on specific, undisputed findings of fact, the ALJ determined and t h e Departmental Appeals Board affirmed that Cedar Lake's actions with r e s p e c t to Resident # 10 were not reasonable under the standard of 42 C.F.R. § 483.25(h), in that Cedar Lake did not take all reasonable steps to prevent h e r from wandering out of the facility. The ALJ's undisputed findings of fact in support of this determination include not only the February 20, 2008 in c id e n t in which Resident # 10 wandered away from the facility, but also R e s id e n t # 10's history of wandering, Cedar Lake's prior knowledge of R e s id e n t # 10's propensity to wander, and Cedar Lake's previous development o f a care plan that involved frequent observation and other measures d e s ig n e d to prevent Resident # 10 from wandering. See Cedar Lake Nursing H o m e , D.A.B. No. CR1967, at 7-8 (June 24, 2009). M o r e o v e r , the primary facts presented by Cedar Lake, even when taken a s true by the ALJ, failed to alter these core factual findings. Indeed, the ALJ a c c e p t e d as true Cedar Lake's main factual presentation--affidavits by e m p lo y e e s testifying to the effect that the installation contractor did not in fo r m Cedar Lake that the alarm was to be turned off--but held that such 6

Case: 10-60112

Document: 00511231139

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Date Filed: 09/13/2010

No. 10-60112 fa c t s did not show that Resident #10's elopement was unforeseeable nor d e m o n s t r a t e that Cedar Lake's actions were reasonable under 42 C.F.R. § 4 8 3 .2 5 (h ). Id. at 7-8. T h e s e findings and conclusions of the ALJ and the Departmental A p p e a ls Board with regard to the unreasonableness of Cedar Lake's safety a n d supervision measures under 42 C.F.R. § 483.25(h) are not arbitrary, c a p r ic io u s , not in accordance to the law, or unsupported by substantial e v id e n c e . Therefore, this petition for review is DISMISSED.

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