West Texas LTC Partners, Inc. v. HHS , 843 F.3d 1043 ( 2016 )

Case: 15-60763 Document: 00513799483 Page: 1 Date Filed: 12/15/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-60763 FILED
December 15, 2016
Lyle W. Cayce
Clerk
WEST TEXAS LTC PARTNERS, INCORPORATED,
Doing Business as Cedar Manor,
Petitioner,
versus
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES,
Respondent.
Petition for Review of a Decision of the
United States Department of Health and Human Services,
Departmental Appeals Board
Before STEWART, Chief Judge, SMITH and DENNIS, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
West Texas LTC Partners, Incorporated, doing business as Cedar Manor
Nursing & Rehabilitation Center (“Cedar Manor”), petitions for review of a
final decision of the Departmental Appeals Board (“DAB”) of the U.S. Depart-
ment of Health and Human Services (“HHS”). Because the decision is neither
arbitrary and capricious nor unsupported by substantial evidence, we deny the
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No. 15-60763
petition for review.
I.
Cedar Manor is a long-term-care facility in San Angelo, Texas. As a
skilled-nursing facility, it is subject to periodic surveys to ensure that it re-
mains in substantial compliance with Medicare regulations. 1 The surveys are
conducted by a designated state agency on behalf of the Centers for Medicare
& Medicaid Services (“CMS”) of HHS. The findings are reviewed by CMS, and
civil money penalties (“CMPs”) or other remedies may be imposed by the Sec-
retary of HHS if the facility is found noncompliant.
In December 2013, Cedar Manor was surveyed by the Texas Department
of Aging and Disability Services (“DADS”). The surveyor found Cedar Manor
out of compliance with three regulations 2 after observing the care provided to
two wheelchair-bound residents, Resident #1 and Resident #4. The surveyor
found that the facility had allowed the straps of a Hoyer sling 3 and catheter
tubing to hang near the wheels of Resident #1’s wheelchair, causing him to fall
from the chair, breaking both of his femurs. Also, Hoyer sling straps were
hanging in a dangerous position on the wheelchair of Resident #4.
In January 2014, DADS found independent violations of three regula-
tions regarding pressure-sore prevention. 4 Resident #7 is a ninety-one-year-
old woman who has a high risk of developing pressure sores. The surveyor
1 We cite the regulations as they were numbered at the time of the proceedings at
issue. To avoid confusion, however, we note that there was a major revision of the pertinent
regulations effective November 28, 2016. Title 42 C.F.R. § 483.13(c) is now § 483.12(b)(1);
§ 483.25(h) is now § 483.25(d); § 483.75 is now § 483.70; § 483.25(c) is now § 483.25(b)(1) and
has slightly different wording; § 483.65 is now § 483.80; and § 483.75(f) is now § 483.35(c).
2 42 C.F.R. §§ 483.13(c), 483.25(h)(1)–(2), and 483.75.
3 A Hoyer sling is a lifting device used to assist patients in and out of their wheelchairs.
4 42 C.F.R. §§ 483.25(c), 483.65, and 483.75(f).
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observed a Cedar Manor employee giving her improper perineal care and fail-
ing to recognize two pressure sores.
For the two sets of violations, CMS recommended two CMPs: $6,050 per
day for three days because of the “immediate hazard” created by the dangling
Hoyer sling straps and $350 per day for forty-two days, to run consecutively
from the end of the “immediate hazard” penalty. Cedar Manor appealed the
findings and CMPs and requested a hearing before an administrative law
judge (“ALJ”). CMS moved for summary judgment on all of the violations after
the briefing and evidence were submitted. The ALJ granted summary judg-
ment and upheld the CMPs. On de novo review, the Departmental Appeals
Board (“DAB”) affirmed.
II.
We have jurisdiction under 42 U.S.C. § 1320a-7a(e) to review findings of
noncompliance and the imposition of CMPs. Such decisions are reviewed
under the “deferential standards of the Administrative Procedures Act
(“APA”), which permits the setting aside of agency actions, findings, and con-
clusions that are ‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with the law’ or ‘unsupported by substantial evidence.’” Cedar
Lake Nursing Home v. HHS, 619 F.3d 453, 456 (5th Cir. 2010) (quoting 5 U.S.C.
§§ 706(2)(A)–(E)).
Cedar Manor contends that because the DAB’s decision affirmed a sum-
mary judgment, it should be reviewed de novo, just as a district court’s sum-
mary-judgment ruling would. We rejected that theory in Cedar Lake, where
the facts were similar. There is no coherent way to distinguish the circum-
stances of this petition for review from those in Cedar Lake, in which we also
observed that “we review this petition consistent with the deferential stan-
dards of the APA, 5 U.S.C. §§ 706(2)(A)–(E).” Cedar Lake, 619 F.3d at 457.
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A.
The December survey resulted in findings of noncompliance with
42 C.F.R. §§ 483.13(c), 483.25(h), and 483.75. DADS affirmed the summary
judgment for each of the four deficiencies under those regulations. We decline
to review any of them, because they are neither arbitrary and capricious nor
unsupported by substantial evidence. See Cedar Lake, 619 F.3d at 456.
1.
Two of the findings of noncompliance arose from the requirement that
the facility “develop and implement written policies and procedures that pro-
hibit mistreatment, neglect, and abuse of residents and misappropriation of
resident property.” 42 C.F.R. § 483.13(c). “[F]ailure to either develop or imple-
ment the required procedures is sufficient to preclude substantial compliance.”
Miss. Care Ctr. v. HHS, 517 F. App’x 209, 213 (5th Cir. 2013).
Cedar Manor does not dispute the facts that support the findings of non-
compliance. Cedar Manor failed to secure the Hoyer straps on Resident #1’s
wheelchair despite repeated warnings from his family. Cedar Manor took no
other preventive action, such as providing Resident #1 with better supervision.
Resident #1 then suffered a fall and two broken femurs after those straps
became tangled in the wheels of his chair. Furthermore, even after such an
accident, Cedar Manor did not secure the straps on Resident #4’s wheelchair,
the second deficiency finding.
Cedar Manor’s counter-arguments are not about the facts themselves,
but are legal questions about the coverage of the regulation. Cedar Manor
submits that neither isolated incidents nor a generalized finding of neglect can
be the basis for a finding of noncompliance with Section 483.13(c). Cedar
Manor identifies the decision of one ALJ who refused to infer, from an isolated
incident, a failure to implement policy. See Heron Pointe Health & Rehab.,
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No. CR1401, 2006 WL 321181, at *8–9 (2006). But prior ALJ decisions are not
binding on the DAB or other ALJs, and Heron Pointe’s reasoning on this issue
has been rejected. 5 Thus, the DAB’s findings of noncompliance with this regu-
lation were neither arbitrary and capricious nor unsupported by substantial
evidence.
2.
The December survey found that Cedar Manor had failed to ensure that
“[t]he resident environment remain[ed] as free of accident hazards as is possi-
ble; and (2) Each resident receive[d] adequate supervision and assistance
devices to prevent accidents.” 42 C.F.R. § 483.25(h). Again, the facts regarding
the Hoyer straps on Resident #1 and Resident #4’s wheelchairs are undisputed.
Cedar Manor contends that Resident #4 never fell out of the wheelchair, but
that is irrelevant to whether the facility was in substantial compliance with a
regulation regarding accident-prevention. See Clermont Nursing & Convales-
cent Ctr., DAB No. 1923, 2004 WL 1764714, at *12 (2004). The DAB’s finding
of noncompliance with Section 483.25(h) was neither arbitrary and capricious
nor unsupported by substantial evidence.
3.
The December survey found that Cedar Manor was out of substantial
compliance with the requirement that the “facility . . . be administered in a
manner that enables it to use its resources effectively and efficiently to attain
or maintain the highest practicable physical, mental, and psychosocial well-
being of each resident.” 42 C.F.R. § 483.75. Noncompliance with
5 Britthaven of Chapel Hill, DAB No. 2284, 2009 WL 4519868, at *4 (2009) (holding
that an ALJ decision is not binding on the DAB or other ALJs); see, e.g., Oceanside Nursing
& Rehab Ctr., DAB No. 2382, 2011 WL 3251314, at *6 (2011) (rejecting the reasoning of Heron
Pointe).
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Section 483.75 “is a derivative finding, based on the presence of other defici-
encies.” Asbury Ctr. v. HHS, 77 F. App’x 853, 857 (6th Cir. 2003). Such find-
ings were appropriate as discussed above. Furthermore, Resident #4’s nurse
aide told the surveyor that she had not been trained in the operation of the
Hoyer sling. Therefore the finding of noncompliance with Section 483.75 was
neither arbitrary and capricious nor unsupported by substantial evidence.
B.
The January survey resulted in findings that Cedar Manor was non-
compliant with 42 C.F.R. §§ 483.25(c), 483.65, and 483.75(f). The DAB af-
firmed the summary judgment on each finding of noncompliance, and there is
sufficient evidence to support each of them. See Cedar Lake, 619 F.3d at 456.
1.
The January survey found that Cedar Manor failed to “ensure that—
(1) A resident who enters the facility without pressure sores does not develop
pressure sores unless the individual’s clinical condition demonstrates that they
were unavoidable; and (2) A resident having pressure sores receives necessary
treatment and services to promote healing, prevent infection and prevent new
sores from developing.” 42 C.F.R. § 483.25(c). A failure to provide care in ac-
cordance with the patient’s care plan can constitute a violation of this regu-
lation. See Windsor Place v. HHS, 649 F.3d 293, 299 (5th Cir. 2011). In the
case of Resident #7, the care plan called for nurses to “[c]leanse [Resident #7’s]
perineal area with soap and water following each urination,” and to change
gloves prior to applying barrier cream that help[s] prevent pressure sores. The
affidavit of the Director of Nursing, regarding the incident, does not dispute
the material facts and reveals she was not present when the care was provided.
Cedar Manor disputes the number of pressure sores found on Resident #7, but
that was not the basis for the finding of noncompliance and is thus not
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material. The DAB’s holding is neither arbitrary and capricious nor unsup-
ported by substantial evidence.
2.
Title 42 C.F.R. § 483.65 requires that “[t]he facility must establish and
maintain an infection control program designed to provide a safe, sanitary, and
comfortable environment and to help prevent the development and transmis-
sion of disease and infection.” The undisputedly deficient perineal care that
Resident #7 received counter to the care plan is also sufficient to support the
DAB’s holding as to this regulation. That Cedar Manor maintains infection
control policies and in-service training does not create a material dispute over
the failure to implement those policies when providing care.
3.
The third January noncompliance finding arose from a failure to “ensure
that nurse aides are able to demonstrate competency in skills and techniques
necessary to care for residents’ needs, as identified through resident assess-
ments, and described in the plan of care.” 42 C.F.R. § 483.75(f). “Demonstrat-
ing competency in a skill set requires correctly carrying skills out.” Heritage
House of Marshall Health & Rehab. Ctr., DAB No. 2566, 2014 WL 2921190, at
*13 (2014). Cedar Manor offered evidence of its nurse’s training and experi-
ence but nothing to contest that the nurse had provided improper perineal care.
Cedar Manor relies on a previous ALJ decision that found that a trained
nurse’s actions that did not cause actual harm was still substantially com-
pliant. See Mabee Health, DAB No. CR2525, 2012 WL 1670506, at *9. But
prior ALJ decisions are not binding on the DAB, and Heritage House distin-
guished the “more than minimal harm” of improper perineal care from the fail-
ure to use proper lifting procedures in Mabee. Heritage House, 2014 WL
2921190, at *13. The DAB’s decision was neither arbitrary and capricious nor
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unsupported by substantial evidence.
III.
Cedar Manor contests the imposition of the $350-per-day CMPs for the
period after a DADS survey found that the December violations had cleared on
January 16, 2014, but before the subsequent survey found the violations re-
lated to Resident #7 on January 27, 2014. The imposition of CMPs is also
reviewed using the same deferential APA standard. Cedar Lake, 619 F.3d
at 456. The penalties for this alleged gap period will be upheld if there is sub-
stantial evidence to support that conclusion and it is not arbitrary and capri-
cious. Id.CMS has the authority to impose CMPs on facilities that are out of sub-
stantial compliance with the Medicare regulations. 42 C.F.R. § 488.400. The
penalties continue until “[t]he facility has achieved substantial compliance, as
determined by CMS or the State based upon a revisit or after an examination
of credible written evidence . . . .” 42 C.F.R. § 488.454(a)(1). CMS’s determin-
ation that a facility has not achieved substantial compliance takes precedence
over a decision by a state agency that a facility is in substantial compliance.
42 C.F.R. § 488.452(a)(2). Furthermore, a state agency’s finding that past
deficiencies have cleared is not equivalent to a finding that the facility is in
substantial compliance. Meadowbrook Manor—Naperville, DAB No. 2173,
2008 WL 2625664, at *9 (2008).
Despite the fact that DADS determined that the December violations
had cleared on January 16, 2014, it did not issue a finding that Cedar Manor
had achieved substantial compliance. On February 18, 2014, CMS certified
that it had achieved substantial compliance as of February 1, 2014. That find-
ing of substantial compliance controls over the DADS finding that prior
violations had cleared. See 42 C.F.R. § 488.452(a)(2). Cedar Manor maintains
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that CMS’s findings of substantial compliance focus on the January survey
violations and include no other evidence that Cedar Manor was out of sub-
stantial compliance during this gap period. But, the burden to prove that a
facility has returned to substantial compliance is on the facility, not CMS. 6
Cedar Manor has not provided evidence to meet that burden beyond the DADS
finding, and it was not arbitrary or capricious for the DAB to impose the penal-
ties for the gap period.
The summary-judgment findings and the imposition of CMPs by the
DAB are neither arbitrary nor capricious and are supported by substantial evi-
dence. The petition for review is DENIED.
6 See, e.g., Chi. Ridge Nursing Ctr., DAB No. 2151, 2008 WL 546360, at *17 (2008)
(“We have consistently rejected the contention, as being contrary to the structure and pur-
poses of the nursing home enforcement scheme, that CMS must affirmatively prove that
noncompliance exists on each day that a remedy is in effect after the first day of non-
compliance.”).
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