Plott Nursing Home v. Sylvia Mathews Burwell , 779 F.3d 975 ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PLOTT NURSING HOME, No. 12-70174
Petitioner,
HHS No.
v. A-11-66
SYLVIA MATHEWS BURWELL,*
Secretary of the United States OPINION
Department of Health and Human
Services,
Respondent.
On Petition for Review of an Order of the
Department of Health & Human Services
Argued and Submitted
October 11, 2013—Pasadena, California
Filed March 3, 2015
Before: Andrew J. Kleinfeld and Morgan Christen, Circuit
Judges, and John W. Sedwick, District Judge.**
Opinion by Judge Kleinfeld;
Partial Concurrence and Partial Dissent by Judge Christen
*
Sylvia Mathews Burwell is substituted for her predecessor, Kathleen
Sebelius, as Secretary of the United States Department of Health and
Human Services. Fed R. App. P. 43(c)(2).
**
The Honorable John W. Sedwick, District Judge for the U.S. District
Court for the District of Alaska, sitting by designation.
2 PLOTT NURSING HOME V. BURWELL
SUMMARY***
Medicare Act
The panel reversed in part the Secretary of Health and
Human Services’ imposition of a civil monetary penalty for
violations of the Medicare Act’s standards of care for nursing
home patients, and remanded.
The panel affirmed the Secretary’s determination that the
Plott Nursing Home in California violated the quality of care
for bed sores, reversed the Secretary’s determination that the
nursing home violated the quality of care for urinary tract
infection, and held that the nursing home was entitled to
administrative review of all cited deficiencies and a remand
with directions to review or dismiss the violations that were
not reviewed by the agency.
The panel also held that regarding the public website, the
agency need not afford review before survey results were
posted, but must allow review and correction as required by
the Medicare Act. The panel remanded to the Department of
Health and Human Services Appeals Board to review or
dismiss the unreviewed and appealed deficiencies alleged,
and to reconsider the civil money penalty assessed against the
nursing home.
Judge Christen concurred with the majority’s holding
concerning the two deficiencies that formed the basis for the
$500 per day penalty (bed sores and urinary tract infection).
***
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PLOTT NURSING HOME V. BURWELL 3
Judge Christen dissented from Part C of the majority’s
analysis concerning the holding as to the unreviewed
deficiencies.
COUNSEL
Joseph L. Bianculli, Health Care Lawyers, PLC, Arlington,
Virginia; Elizabeth Plott Tyler and Terry Schneier, Tyler &
Wilson, Los Angeles, California, for Petitioner.
Helen L. Gilbert and Michael S. Raab, Attorneys, Stuart F.
Delery, Acting Assistant Attorney General, Department of
Justice, Washington, D.C.; William B. Schultz, Acting
General Counsel, Ann Hall, Chief Counsel, Region IX, and
Claire D. Chazal, Assistant Regional Counsel, Department of
Health and Human Services, San Francisco, California, for
Respondent.
4 PLOTT NURSING HOME V. BURWELL
OPINION
KLEINFELD, Senior Circuit Judge:
Plott Nursing Home (“Plott”) petitions for review of a
civil money penalty imposed by the Secretary of the United
States Department of Health and Human Services for Plott’s
violations of the Medicare Act’s standards of care for nursing
home patients.
I. The Regulatory Scheme
Skilled nursing facilities that participate in the federal
Medicare and Medicaid programs must satisfy minimum
standards of patient care in order to receive reimbursement
for patient services.1 The Centers for Medicaid and Medicare
Services (“CMS”), a division of the United States Department
of Health and Human Services, contracts with state agencies
to conduct unannounced compliance surveys of participating
skilled nursing facilities.2 The surveys must be performed at
least every 15 months.3 Most surveyors are Health Facilities
Evaluator Nurses (HFENs). To become qualified as an
HFEN in California, an individual must be a registered nurse
and have one year of nursing experience, and six months of
nursing supervisory experience.4 A Master’s Degree in a
health-related field can be substituted for the required nursing
1
42 U.S.C. § 1395i-3(a)–(d); 42 C.F.R. § 483, § 483.25.
2
See 42 U.S.C. § 1395aa.
3
42 U.S.C. § 1395i-3(g)(2)(A)(iii).
4
California Department of Public Health Website, available at
http://www.cdph.ca.gov/services/jobs/Pages/HFENJobs.aspx.
PLOTT NURSING HOME V. BURWELL 5
experience and a Bachelor’s of Science degree in Nursing can
be substituted for the required supervisory experience.5 All
successful applicants must score at least 70% on the HFEN
Training and Experience Examination.6 Among other
subjects, the examination tests knowledge of health facilities
and services regulations, standards of patient care, medical
terminology, techniques of health facility management, and
investigative methods.7 Survey teams may also include
surveyors with specialized knowledge, such as dieticians and
pharmacists. CMS guidance requires the number of
surveyors be assigned based on the size of the facility, the
history of non-compliance, the existence of special care units
and the need for inexperienced surveyors to accompany
experienced surveyors as part of their training.8 All surveyors
assigned to a facility should have received the required
training, and at least one member of the team should be a
registered nurse.9
Surveyors record violations, otherwise known as
“deficiencies” and rate them as to scope and severity. The
deficiencies are then referred to CMS for various enforcement
5
Id.
6
Job Description for California Department of Public Health (CDPH)
Health Facilities Evaluation Nurse, available at https://jobs.ca.gov/
JOBSGEN/6PB64.PDF.
7
Id.
8
CMS Publication 100-07, State Operations Manual, Chapter 7,
§7201.1 [hereinafter SOM] available at http://www.cms.gov/Regulations-
and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-
Items/CMS1201984.html?DLPage=1&DLSort=0&DLSortDir=ascending.
9
Id. at Chapter 7, §7201.2.
6 PLOTT NURSING HOME V. BURWELL
actions, including program disqualification, temporary
management, denial of reimbursement payments, state
monitoring, transfer of residents, closure of the facility,
directed plans of correction and training, and civil money
penalties.10 Before imposing a remedy, CMS must consider
the scope and severity of a deficiency, the relationship of the
deficiencies to each other, and the facility’s prior history of
noncompliance.11 If a facility is cited for deficiencies
reflecting a substandard quality of care during three
consecutive surveys, CMS must deny reimbursement
payments and monitor the facility.12
In this case, the state surveyors cited Plott for deficiencies
and CMS imposed a civil money penalty. CMS may impose
“per day” or “per instance” civil money penalties based on a
deficiency’s scope and severity.13 The penalties start at $50
per day, and are imposed in $50 increments.14 For
deficiencies of lesser severity, CMS may impose penalties
ranging from $50 to $3,000 per day.15 For deficiencies with
the highest severity rating of “immediate jeopardy” the
facility may be fined $3,050 to $10,000 per day.16 If penalties
10
42 C.F.R. § 488.408.
11
Id. § 488.404.
12
42 U.S.C. § 1395i-3(h)(2)(E).
13
Id. §§ 1395i-3(h)(2)(A)(ii), (h)(2)(B)(ii); 42 C.F.R. 488.438(a)(1)(ii).
14
42 C.F.R. § 488.438.
15
Id. § 488.438(a)(1)(ii).
16
See id. §§ 488.301, 488.408(e)(2)(ii), 488.438(a)(1)(i).
PLOTT NURSING HOME V. BURWELL 7
are imposed per instance, instead of per day, the permissible
range is $1,000 to $10,000.17
The penalty must be “reasonable.”18 In setting the civil
money penalty amount, CMS must take into account several
factors, including the scope and severity of the deficiency, the
facility’s history of noncompliance, repeated deficiencies, the
facility’s financial condition, and the facility’s degree of
culpability.19 The statute directs CMS to “provide for the
imposition of incrementally more severe fines for repeated or
uncorrected deficiencies.”20
Nursing facilities are entitled to a hearing before an
administrative law judge (“ALJ”) to challenge civil money
penalties.21 CMS has the initial burden of proving a prima
facie case of noncompliance. Then the burden switches to the
facility to prove, by a preponderance of the evidence, that
they were in “substantial compliance.”22 “Substantial
compliance” means a level of noncompliance such that “any
17
Id. § 488.438(a)(2).
18
Emerald Oaks, D.A.B. No. 1800, at 7 (2001).
19
42 C.F.R. §§ 488.404(b), 488.438(f).
20
42 U.S.C. § 1395i-3(h)(2)(B)(iii).
21
Id. § 1395i-3(h)(2)(B)(ii) (incorporating 42 U.S.C. 1320a-7a(c)(2)).
22
Batavia Nursing & Convalescent Ctr., D.A.B. No. 1904, at 5–6
(2004).
8 PLOTT NURSING HOME V. BURWELL
identified deficiencies pose no greater risk to resident health
or safety than the potential for causing minimal harm.”23
A facility may appeal the ALJ’s decision to the
Department of Health and Human Services Appeals Board
(“Board”), which reviews the ALJ’s findings for substantial
evidence on the record as a whole. The Secretary has
delegated to the Board her “authority to make final decisions
on review of . . . decisions of Administrative Law Judges
involving enforcement actions, including . . . civil money
penalties.”24 “Any person adversely affected by a
determination of the Secretary” may appeal the Board’s
decision to a United States Court of Appeals.25
II. Plott’s 2008 Surveys
Plott Nursing Home is a Medicare and Medicaid
participating skilled nursing facility in California. On
September 24, 2008, the California Department of Public
Health conducted an unannounced survey of Plott. Ten
surveyors completed the survey. Eight of Plott’s surveyors
were HFENs, one was a registered dietician, and one was a
Health Facilities Evaluator Supervisor (HFES).26
23
42 C.F.R. § 488.301.
24
58 Fed. Reg. 58,171.
25
42 U.S.C. 1395i-3(h)(2)(B)(ii); 42 U.S.C. 1320a-7a(e).
26
A HFES is a supervisor that has the same qualifications as an HFEN,
but also has work experience as an HFEN. Job Description for California
Department of Public Health (CDPH) Health Facilities Evaluation Nurse
available at http://www.cdph.ca.gov/services/jobs/Documents/
HFEIISup8H1AT.pdf
PLOTT NURSING HOME V. BURWELL 9
During compliance surveys, state surveyors identify
categories of deficiencies with a “Tag” designation.27 The
“Tag” identifies the regulatory provision allegedly violated.28
Each Tag also has an accompanying alphabetical scope and
severity code ranging from A to L.29
Scope and severity levels A through C indicate that the
cited deficiency poses no actual harm and has a potential for
minimal harm. Levels D through F indicate the deficiency
poses no actual harm, but has the potential for more than
minimal harm. Levels G through I indicate that the
deficiency poses actual harm that does not rise to immediate
jeopardy. Levels J through L indicate that the deficiency
poses immediate jeopardy to resident health or safety. In
each of the four alphabetical levels, the lowest letter indicates
the deficiency is “isolated,” the middle letter indicates that
there is a “pattern” of the deficiency, and the highest letter
indicates that the problem is “widespread.” Facilities whose
deficiencies do not rise beyond a C in scope and severity are
considered in substantial compliance. No penalty is imposed
for facilities who are found to be in substantial compliance.30
In September 2008, the surveyors cited Plott for 33
different Tag numbered deficiencies above a D in scope and
severity. Four of the 33 were a G, H, or I, (actual harm, but
not immediate jeopardy) the rest were a D, E or F (no actual
27
See SOM, supra note 8, at Appendix PP – Guidance to Surveyors for
Long Term Care Facilities.
28
Id.
29
Id. at Chapter 7, § 7400.5.1.
30
42 C.F.R. § 488.402(d)(2).
10 PLOTT NURSING HOME V. BURWELL
harm, but potential for minimal harm.) A follow-up survey
in December 2008 found one additional D level deficiency.
The state agency referred all 3431 deficiencies to CMS. Based
on the 33 September deficiencies, CMS fined Plott $500 per
day from September 24 through December 3, 2008, and $100
per day from December 4 through December 15, 2008 for the
one December deficiency.
Plott requested an ALJ hearing to dispute the results of
both surveys. The ALJ consolidated the two proceedings and
noted at the beginning of the hearing that many of the
surveyors only had two years of surveying experience, and
that there was a large number of “low level” deficiencies. He
said “my initial impression is a lot of these deficiencies are
very finely honed. They are very pointed deficiencies . . .
usually I see gross problems.” After a four-day evidentiary
hearing, the ALJ upheld the entire penalty imposed by CMS
on the basis of three deficiencies for three different patients,
two during the September 2008 survey and one during the
December 2008 survey. During the September survey, Plott’s
care of Resident Six violated the standard of care for bed
sores,32 and Plott’s care of Resident Five violated the standard
31
Plott states in their brief that they were cited for 96 deficiencies. This
is because some of the 34 Tag coded deficiencies cited in the two surveys
applied to more than one patient. Plott counts every occurrence of the
alleged deficiency where the surveyors counted the code once and the
scope and severity code takes into account instances where the deficiency
applied to more than one patient.
32
42 C.F.R. § 483.25(c) “Pressure Sores. Based on the comprehensive
assessment of a resident, the facility must 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
PLOTT NURSING HOME V. BURWELL 11
of care for urinary tract infections (“UTIs”).33 During the
December survey, Plott violated the standard of care for UTIs
for another patient.
During informal dispute resolution prior to the ALJ
hearing, CMS deleted the deficiency alleging that residents
have access to the outdoor garbage containers. CMS failed
to make a prima facie case on five other deficiencies,34 such
as a staff member storing a lunchbox in a resident’s room,
slow response to call lights, and foods served at the wrong
temperature, when CMS presented no evidence to support
these deficiencies at the hearing. The ALJ did not review the
25 remaining deficiencies from the September survey, even
though CMS initially imposed the $500 per day civil money
penalty based on all 33 deficiencies. The ALJ held that it was
“not necessary to address all the other alleged deficiencies
from the September 2008 survey” because the bedsore and
UTI violations “provide a sufficient basis for the enforcement
remedies that CMS proposes.”
treatment and services to promote healing, prevent infection and prevent
new sores from developing.”
33
Id. § 483.25(d) “Urinary Incontinence. Based on the resident’s
comprehensive assessment, the facility must ensure that– (1) [a] resident
who enters the facility without an indwelling catheter is not catheterized
unless the resident’s clinical condition demonstrates that catheterization
was necessary; and (2) [a] resident who is incontinent of bladder receives
appropriate treatment and services to prevent urinary tract infections and
to restore as much normal bladder function as possible.”
34
Deficiency Tags 241, 246, 252, 282 and 364 were not argued in
CMS’s closing brief.
12 PLOTT NURSING HOME V. BURWELL
The Department of Health and Human Services Appeals
Board affirmed the $500 per day penalty based on the
bedsores and UTI deficiencies from the September survey,
but reversed the UTI deficiency and eliminated the $100 per
day penalty from the December survey. The Board found
that the $500 per day penalty was reasonable because Plott
had a history of noncompliance and was cited for the same
two deficiencies in 2005 and 2007.35 The Board further held
that the ALJ was not required to review the other 25
contested, but unreviewed, deficiencies.
Plott appealed the Board’s decision. We affirm the
Secretary’s determination that Plott violated the quality of
care for bed sores,36 but reverse the determination for
violating the quality of care for urinary tract infections37
because it is not supported by substantial evidence on the
record as a whole. We also hold that Plott is entitled to
administrative review of all deficiencies that CMS cited and
remand with directions to review or dismiss the 25 violations
that the ALJ and Board did not review.
III. Standard of Review
“The findings of the Secretary with respect to questions
of fact, if supported by substantial evidence on the record
considered as a whole, shall be conclusive.”38 Substantial
35
See 42 C.F.R. § 488.438(f).
36
Id. § 483.25(c).
37
Id. § 483.25(d).
38
42 U.S.C. § 1320a-7a(e).
PLOTT NURSING HOME V. BURWELL 13
evidence is “more than a mere scintilla but less than a
preponderance; it is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.”39
An agency’s interpretation of its own regulations is entitled
to “controlling weight unless it is plainly erroneous or
inconsistent with the regulation.”40
IV. Analysis
A. Bed Sores
Bed sores, also known as pressure sores, pressure ulcers
or decubitus ulcers, develop when skin is exposed to
prolonged external pressure that restricts blood supply,
especially if the skin remains wet on an incontinent patient or
is subject to shearing force from being pulled along a
bedsheet. They typically form in areas of the body like the
tailbone, where skin is thin, bone is close to the surface, and
pressure cannot spread easily. The reduction in blood flow
starves the skin tissue of oxygen and nutrients, causes the
skin to thin even more, and tissue to die. Bed sores ultimately
results in open wounds that can require surgery or, if
untreated, can cause death.
Bed sores are common in skilled nursing facilities, where
many residents are bedridden. Accordingly, 42 C.F.R.
§ 483.25(c) requires skilled nursing facilities to
ensure that – (1) A resident who enters the
facility without pressure sores does not
39
Hill v. Astrue, 698 F.3d 1153, 1159 (9th Cir. 2012).
40
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994).
14 PLOTT NURSING HOME V. BURWELL
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.41
The Board has interpreted § 483.25(c) to mean that a facility
must “go beyond merely what seems reasonable to, instead,
always furnish what is necessary to prevent new sores, unless
clinically unavoidable, and to treat existing ones as needed.”42
Resident Six, an 81-year-old woman, was admitted to
Plott on June 28, 2007. Her diagnoses included dementia,
incontinence, hypertension, depression, anemia, recurrent
urinary tract infections, and a history of brain cancer. She
was entirely dependent on staff, bedridden, and fed through
a tube inserted into her stomach. On May 30, 2008, she was
hospitalized for a methicillin-resistant staph infection
(MRSA) on her scalp over her brain surgery incision. When
she was readmitted to Plott on June 5, 2008, her physician
prescribed the use of wrist restraints on her bed to keep her
from picking at and spreading the infection in her scalp. Thus
she was literally bound to her bed, on doctor’s orders,
because she kept re-injuring her now-diseased scalp.
She first developed bed sores on her tailbone six months
after admission in December 2007. One sore formed after her
41
42 C.F.R. § 483.25(c) (emphasis added).
42
See e.g. Koester Pavilion, DAB No. 1750, at 31, 32 (2000) (emphasis
added).
PLOTT NURSING HOME V. BURWELL 15
admission, but before she was restrained. The sore
continually healed and reopened, six times over the course of
nine months.43 An additional sore appeared in September
2008 on her left buttock. Substantial evidence on the record
as a whole supports the Board’s determination that Plott’s
care of Resident Six violated 42 C.F.R. § 483.25(c).
The Board identified specific treatments that Plott did not
provide, such as specialized mattresses that help prevent bed
sores. Pressure relief mattresses use high density foam, air,
water, or gel to reduce and redistribute bed sore-causing
pressure. More advanced mattresses reduce the risk of bed
sores by alternating pressure between different areas of the
body. These mattresses are called low air loss mattresses.
They are powered by an air pump that provides sequential
inflation and deflation or alternates pressure between the
mattress’ many air cells. Despite Resident Six’s recurrent
bed sores, Plott failed to timely provide two different kinds of
mattresses, a pressure relief mattress and a low air loss
mattress, even though they were identified by Plott’s nurses
and physicians as needed interventions.44
Plott prepared a long term care plan in June 2007 when
Resident Six was first admitted. The plan said that Resident
Six would be provided with a pressure relief mattress. Plott’s
records show that Resident Six did not receive this mattress
43
It was open from December 26, 2007 to February 29, 2008; March 13
to March 20, 2008; May 23 to May 30, 2008; June 5 to June 18, 2008;
June 26 to August 1, 2008; and August 27 to September 22, 2008.
44
See Tri-Cnty. Extended Care Ctr., D.A.B. 1936, at 16 (2004) (holding
that a nursing home violated § 483.25(c), in part, because it failed to
provide a pressure relief mattress that had already been identified as
needed in the resident’s care plan).
16 PLOTT NURSING HOME V. BURWELL
until nearly a year later on June 9, 2008. An October 4, 2008
entry in her care plan says “LE [late entry] for 6/9/08 pressure
relief mattress.” Based on this documentation, the Board
reasonably determined that the pressure relief mattress was
not timely provided.
There is also substantial evidence to support the Board’s
finding that this resident was later also not given the
prescribed low air loss mattress until one and a half months
after the prescription. An outside wound specialist assessed
Resident Six’s bed sores on August 7 and August 14, 2008.
Both assessments recommended that Plott “continue low air
loss mattress.” Plott argues that the specialist’s
recommendation to “continue use” shows that a low air loss
mattress was already in use. The Board rejected that
inference for several reasons. First, the care plan did not list
a low air loss mattress until September 24, 2008. Second, a
state surveyor from the September 2008 inspection testified
that Resident Six’s mattress was Plott’s standard pressure
relief mattress and it was “firm to touch.” Third, Plott’s nurse
testified that Resident Six was using a pressure relief mattress
at the time of the survey and that a low air loss mattress was
provided “around” September 24, 2008. The Board
reasonably concluded that Plott replaced the pressure relief
mattress with the low air loss mattress on September 24,
2008, the last day of the survey. These reasons together
suffice as substantial evidence.
Plott argues that there is no evidence that the bed sores
were avoidable or that it failed to successfully treat them.
Though Resident Six’s bed sores healed and her medical
conditions made treatment and avoidance of new sores
exceedingly difficult, the regulation requires nursing facilities
to “ensure” that “pressure sores do[] not develop” and that a
PLOTT NURSING HOME V. BURWELL 17
“resident having pressure sores receives necessary treatment
and services to . . . prevent new sores from developing.”45
The evidence sufficed under the lenient “substantial
evidence” standard, in light of the delay in furnishing the
prescribed mattresses, to support the Board’s determination.
Likewise, the evidence sufficed for the Board’s rejection
of Plott’s unavoidability defense. “[T]he facility must ensure
that [] [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.”46
The Board, interprets “unavoidable” as “incapable of
prevention despite appropriate measures taken in light of the
clinical risks.”47 The mattress delays were sufficient evidence
for rejection of this defense.48
B. Urinary Tract Infections
Urinary tract infections (“UTIs”) are caused by bacteria
that enter the urethra and then the bladder. Because catheter
use tends to cause urinary tract infections, regulations require
avoidance of catheterization if unnecessary and special care
to avoid infections among catheterized residents:
45
42 C.F.R. § 483.25(c) (emphasis added).
46
Id. § 483.25(c)(1) (emphasis added).
47
Harmony Court, D.A.B. No. 1968, at 11 (2005) (emphasis added).
48
Woodland Village Nursing Ctr., D.A.B. No. 2172, at 12 (2008);
Golden Living Ctr., D.A.B. No. CR2634, at 6 (2012); Edgemont
Healthcare, DAB No. 2202, at 7 (2008).
18 PLOTT NURSING HOME V. BURWELL
Based on the resident’s comprehensive
assessment, the facility must ensure that–
(1) A resident who enters the facility without
an indwelling catheter is not catheterized
unless the resident’s clinical condition
demonstrates that catheterization was
necessary; and
(2) A resident who is incontinent of bladder
receives appropriate treatment and services
to prevent urinary tract infections and to
restore as much normal bladder function as
possible.49
Resident Five, a 79-year-old woman, was admitted to
Plott in 2005. Her diagnoses included diabetes, hypertension,
congestive heart failure, Parkinson’s Disease, urinary
retention and a history of kidney stones. Her susceptibility to
urinary tract infections was high for two reasons. First, she
had a permanent indwelling catheter. “Urinary tract infection
is one of the most common infections occurring in nursing
homes and is often related to an indwelling urinary
catheter.”50 The CMS guidance manual for state agency
surveyors notes that “by the 30th day of catheterization,
bacteriuria is nearly universal” and that individuals with
catheters are 40 times more likely to have a urinary tract
49
42 C.F.R. § 483.25(d) (emphasis added).
50
SOM, supra note 8, Appendix PP Guidance to Surveyors for Long
Term Care Facilities at Tag F-315.
PLOTT NURSING HOME V. BURWELL 19
infection.51 She also had a history of “staghorn calculus.”
Staghorn calculi are branched kidney stones in the urinary
tract that increase a patient’s risk of developing a urinary tract
infection. Resident Five had two staghorn calculi removed
during emergency surgery on January 16, 2007 after she
experienced septic shock as a result of a kidney infection.
The surveyors found that Resident Five had four
symptomatic urinary tract infections from December 2007 to
August 2008. They cited Plott for not identifying and
implementing “new approaches” to prevent the recurrent
infections. The ALJ and Board affirmed this finding.
This finding was not supported by substantial evidence on
the record. There was no evidence that Plott did not provide
“appropriate treatment and services” to avoid the infections.
Plott prepared a long-term care plan in January 2007 to
address the risk. The plan’s treatments included
(1) monitoring for signs and symptoms of infection and
reporting any noted infections; (2) ensuring daily catheter
care and changes as necessary; (3) providing good perineal
care; (4) encouraging fluid intake and hydration (urination
flushes bacteria); (5) performing laboratory testing as
ordered; and (6) administering antibiotics. When Resident
Five experienced urinary tract infections, Plott prepared
short-term care plans. These plans, from January 2007,
February 2008, March 2008, June 2008, and August 2008,
show that nurses (1) administered antibiotics to treat urinary
tract infections as ordered by physicians; (2) encouraged fluid
intake; (3) monitored Resident 5 for adverse symptoms;
(4) reported symptoms to doctors; (5) and provided good
perineal care. Similarly, the nurses’ notes show that they
51
Id.
20 PLOTT NURSING HOME V. BURWELL
encouraged fluids, kept Resident Five clean and dry, and gave
good perineal care.
Two physicians and a nurse testified that the care
provided was appropriate. The ALJ asked one physician,
Plott’s medical director, what “other interventions” he could
look for as he reviewed the care plans. He testified that
routine interventions include good hygiene, encouraging
fluids, not allowing bladder distension, getting residents out
of bed to prevent backflow of urine to the kidneys, and
preventing other infections. The other physician, a geriatric
physician, testified that fluid intake should be maximized.
The nurse testified that nurses should provide good perineal
care and encourage fluid intake. The CMS guidance manual
for state agency surveyors suggests the same treatments for
catheterized patients that Plott provided.52
We affirmed the Board’s determination that Plott violated
the bed sore regulation, 42 C.F.R. § 483.25(d), because Plott
did not provide special mattresses, even though they were
previously identified as required. In contrast, the Secretary
has not identified any treatment that Plott should have
provided to prevent Resident Five’s urinary tract infections.
State surveyor nurses suggested silver coated catheters,
consultations with specialists in nephrology or urology, and
cranberry tablets. But the Secretary does not argue that
Plott’s failure to provide cranberry tablets or a silver coated
catheter violated the regulation. One of the testifying
physicians stated that some patients receive cranberry tablets,
but the other testified that he did not prescribe cranberry
tablets, because “new evidence does not support that as a
52
SOM, supra note 8, Appendix PP Guidance to Surveyors for Long
Term Care Facilities at Tag F-315.
PLOTT NURSING HOME V. BURWELL 21
preventive measure.” Nobody testified about silver coated
catheters or submitted any medical evidence to support their
use, and nobody testified that speculative consultations were
medically appropriate. There is not substantial evidence on
the record as a whole to support the Board’s interpretation.
The Secretary argues that, due to Plott’s lack of
independently considering additional interventions beyond
those recommended by her physician, Resident Five
experienced recurrent urinary tract infections. But the
evidence shows that her catheter and history of staghorn
calculus put her at an unavoidably high risk of developing
them. The regulation requires Plott to provide “appropriate
treatment and services to prevent urinary tract infections,”53
not to guarantee that they will not occur.
The Board held that Plott’s failure to implement new
interventions violated the regulation. But, there was no
evidence that Plott should have or could have done anything
new that would have been “appropriate.” Though periodic
reviews and revisions of care plans are required, and the
surveyor faulted Plott for not revising this resident’s care plan
to include cranberry tablets etc., no evidence supported her
suggested revision or other revisions that might have been
“appropriate.” The Board did not review her conclusion
despite Plott’s putting it at issue.
What we are left with, in support of the Board’s penalty,
is the bed sores determination on one resident, supported by
substantial evidence, the urinary tract infections on another,
not supported by substantial evidence, and Plott’s history,
discussed below.
53
42 C.F.R. § 483.25(d).
22 PLOTT NURSING HOME V. BURWELL
C. Unreviewed Deficiencies
The agency dismissed one deficiency prior to the ALJ
hearing and abandoned another 5 deficiencies from the
September survey during the hearing. Plott appealed the
other 28 (27 remaining from September and 1 from
December), but the ALJ reviewed only 3 (2 from September
and 1 from December), holding that it was “unnecessary” to
review the other 25 undismissed and unsettled surveyor’s
disputed allegations. The ALJ reviewed the $500 per day
penalty for September 24 through December 3, 2008 from the
September survey and upheld it based on 2 of the 33
deficiencies alleged. He also upheld the additional $100 per
day penalty from December 4 through December 15, 2008
based on one deficiency from the December survey. The
Board only reviewed the three deficiencies that the ALJ
upheld, and reversed the December deficiency with the $100
per day penalty. One reason the ALJ and the Board gave for
the superfluity of reviewing the other disputed allegations
was that Plott had been cited before for urinary tract
infections and bedsores.
The Board’s reasoning for not reviewing any other
deficiencies is basically that the $500 per day penalty could
have been imposed for the remaining two September
deficiencies, so the unreviewed surveyor’s allegations were
“immaterial.” We cannot agree. Unreviewed allegations of
deficiency do indeed affect penalties, as the Board decision
demonstrates in this case. And the Board’s position that, so
long as the penalty is within the maximum permitted, more
deficiencies are immaterial, does not make sense. Penalties
may be higher or lower within an authorized range,
depending on the extent of deficiencies. The Board’s position
is analogous to claiming that we need not review a criminal
PLOTT NURSING HOME V. BURWELL 23
conviction for five bank robberies, if the statutory maximum
sentence on one of them exceeded the sentence imposed.
Even though the agency might be authorized to impose the
same $500 a day penalty regardless of whether there were 33
deficiencies, or 2 or 1, that does not imply that it reasonably
would have. Plott makes a constitutional argument we need
not reach, because the statute requires that the claimed
deficiencies be reviewed or dismissed when they affect
penalties imposed.
The right to be heard before the ALJ and the Board arises
from the statutory language that “the Secretary shall not
make a determination adverse to any person under . . . this
section until the person has been given written notice and an
opportunity for the determination to be made on the record.”54
Our jurisdiction arises from the provision that “any person
adversely affected by a determination of the Secretary under
this section may obtain a review of such determination in the
United States Court of Appeals.”55 In Shalala v. Illinois
Council on Long Term Care,56 the Supreme Court construed
this statutory scheme as entitling providers to administrative
and judicial review of determinations of penalties, though not,
as in that case, of the regulations generally in the absence of
any determination or penalty imposed in a particular case.
“[T]he relevant determination that entitles a dissatisfied home
to review is any determination that a provider has failed to
54
42 U.S.C. § 1320a-7a(c)(2). The Medicare Act, 42 U.S.C.
§ 1395i(h)(2)(B)(ii), incorporates and applies the review provisions of the
Social Security Act to civil money penalties under section 1320a-7a(a).
55
Id. § 1320a-7a(e).
56
529 U.S. 1 (2000).
24 PLOTT NURSING HOME V. BURWELL
comply substantially with the statute, agreements or
regulations, whether termination or some other remedy is
imposed.”57
The Board decision says that “noncompliance findings
that are not material to the outcome of the appeal,” need not
be addressed by the ALJ. The Board’s theory appears to be
that since the ALJ had statutory authority to impose a $500 a
day penalty for one, two, three, or 33 deficiencies, $500
would be within the reasonable range regardless, so the
unreviewed deficiencies were immaterial to the result. Plott
argues, not that immaterial determinations must nevertheless
be reviewed, but rather that the unreviewed determinations
were, in fact, material.
Plott and their amicus, California Association of Health
Facilities, have two materiality arguments: (1) that the agency
posts the unreviewed deficiencies on a public website, and
(2) that the unreviewed deficiencies are used to enhance
penalties in future proceedings. We reject the first argument,
but are persuaded by the second.
The website argument cannot be correct, because the
statute requires posting of surveyors’ deficiency allegations
before they could possibly be reviewed.58 The statute
requires the Secretary to establish a website linking to state
surveys such as the one done in this case.59 The website must
post staffing data, links to state inspection reports, responses
57
Id. at 21 (internal quotation marks omitted).
58
42 U.S.C. § 1395-3(b)(5)(E).
59
Id. § 1395i-3(i)(1)(A)(ii).
PLOTT NURSING HOME V. BURWELL 25
to the reports, complaints, penalties, and other information to
assist consumers.60 The website gives nursing homes stars,
like hotels on a travel site, from one star to five stars, based
partly on unreviewed deficiencies in survey reports. The
inspection score is calculated, in part, by using points
assigned to deficiencies.61
Review is allowed, but it comes later. The statute
requires the Secretary to provide a review process for
accuracy, clarity, timeliness, and comprehensiveness of the
website’s content.62 If a nursing home disagrees with a rating
that it receives, it can contact the “Five-Star hotline.”63
However, this review process only applies to the data
provided by the nursing homes themselves such as self-
reported quality and staffing data. The only way to dispute
survey data is to appeal through the administrative process.64
Plott argues that it is entitled to review of all deficiencies not
dismissed, and the Secretary argues that the posting, unlike a
60
Id. § 1395i-3(i)(1)(A)(ii).
61
Centers for Medicare and Medicaid Services, Design for Nursing
Home Compare Five-Star Quality Rating System: Technical Users’ Guide
(July 2012) at 4, available at https://www.cms.gov/Medicare/Provider-
Enrollment-and-Certification/CertificationandComplianc/downloads/
usersguide.pdf.
62
42 U.S.C. § 1395i-3(i)(2)(A).
63
Centers for Medicare and Medicaid Services, Questions and Answers,
Improving the Nursing Home Compare Web site: The Five-Star Nursing
Home Quality Rating System (December 18, 2008) at 13, available at
http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/
CertificationandComplianc/downloads/QsandAsFinal.pdf.
64
Id.
26 PLOTT NURSING HOME V. BURWELL
monetary penalty, is not a “remedy,” so it is not subject to
review.
Though the matter is not entirely without doubt, we
conclude that the Secretary has the better of this argument.
The Court in Illinois Council held that though unreviewed
deficiencies are posted on the website,65 that nursing homes
cannot challenge agency action until “termination or some
other remedy is imposed.”66 Readers of the website deciding
not to put their relatives in low-rated nursing homes is a not
a “remedy” under the statute.67 The penalty is imposed, at
least directly, by consumers, not the agency. The statute
requires the Secretary to post survey information and
statements of deficiencies “within 14 calendar days” of when
the information is made available to the nursing homes.68
Congress cannot have contemplated an appellate process that
could be concluded within 14 calendar days, so it must have
determined that timeliness of website postings outweighed
the importance of review prior to posting. That interpretation
is consistent with the statutory command that the Secretary
use survey information provided by the states to update the
65
Illinois Council, 529 U.S. at 22.
66
Id. at 21 (internal quotation marks omitted).
67
See e.g., 42 U.S.C. § 1395cc(h) (termination of participation
agreements); 42 U.S.C. § 1395i-3(b)(3)(B)(ii) (civil money penalties for
false statements in resident assessments); 42 U.S.C. § 1395cc(h)(C)(i)(II)
(denial of payment and appointment of temporary management);
42 U.S.C. § 1395cc(h)(C)(i)(III) (loss of approval of skilled nursing
facility’s nurse aide training program).
68
42 U.S.C. § 1395i-3(b)(5)(A).
PLOTT NURSING HOME V. BURWELL 27
website “as expeditiously as practicable.”69 This statutory
language compels the reading that Plott was not entitled to
review of the deficiencies alleged in the survey prior to
posting on the website.
We agree with Plott’s other argument, that the
unreviewed deficiency allegations do affect the penalty. In
Illinois Council, the Secretary assured the Court that the
agency did not increase sanctions in later cases on account of
unreviewed deficiency findings in earlier instances:
And, the Council’s amici assert, compliance
actually harms the home by subjecting it to
increased sanctions later on by virtue of the
unreviewed deficiency findings, and because
the agency makes deficiency findings public
on the Internet, §488.325. The short
conclusive answer to these contentions is that
the Secretary denies any such practice.70
The assurance that the Secretary gave the Supreme Court, is
not the Secretary’s practice now.
The Board’s 2011 decision in this case held that
deficiencies in 2005 and 2007 surveys not only may, but
must, increase the penalty imposed in a later survey. The
Board held that it was “prejudicial error” for the ALJ not to
give weight to evidence of this history “merely because the
earlier deficiencies were apparently quickly corrected, and
required no enforcement penalties.” The Board holds that
69
Id. § 1395i-3(b)(5)(E).
70
Illinois Council, 529 U.S. at 21–22.
28 PLOTT NURSING HOME V. BURWELL
weight must be given to prior noncompliance even if “no
remedy was imposed at the time.”71 The Board cites the
statutory language requiring “incrementally more severe fines
for repeated . . . deficiencies.”72
That is correct as far as it goes. The implication, though,
vitiates the soundness of the Board’s position that
unpenalized deficiencies are unreviewable. The Board’s
argument that the 25 unreviewed deficiency allegations are
immaterial to the penalty cannot be reconciled with the
Board’s argument that the penalties have to be increased if
there is a history of prior deficiencies, even if they were not
subject to review. A fair reading of the statute requires
review of alleged deficiencies because they may affect future
penalties.
The Board addresses this with a footnote suggesting that
earlier unreviewed deficiencies may be contested when they
are used to determine the reasonableness of a penalty in a
later proceeding. We cannot see why Congress would have
meant that a deficiency unreviewable in 2005, because no
penalty was imposed then, would become reviewable in 2011
because it established a prior history. Long delayed
proceedings are generally disfavored because they are less
reliable on account of the difficulties of obtaining evidence.
In the nursing home context, the argument that a 2005
deficiency allegation is not reviewable in 2005, but is in a
proceeding six years later, verges on the ridiculous.
Residents of nursing homes, often the most important
witnesses, tend to be old and sick. By the time review is
71
Id.72
42 U.S.C. § 1395i-3(h)(2)(B).
PLOTT NURSING HOME V. BURWELL 29
allowed under the Board’s interpretation, many will be dead.
And many of the staff are likely to have moved on to other
jobs and be difficult or impossible to locate.
We are compelled, by the Board’s use of unreviewed
deficiencies to increase current penalties, to conclude that
survey allegations of deficiencies must be reviewed or
dismissed. Of course a nursing home could waive review, but
it did not waive review here. If it does not, the nursing home
is entitled to review in the proceeding stemming from them,
and need not await a subsequent proceeding when they are
used to enhance penalties.
Our sister circuits, to they extent they have spoken on this
question, are split. The Eighth Circuit addressed the
reviewability issue in Grace Healthcare v. United States
Department of Health and Human Services.73 In that case, as
in this one, the ALJ did not address most of the deficiencies
alleged by the surveyor on the ground that the one reviewed
“is, in and of itself, sufficient” to justify the penalty
imposed.74 Grace Healthcare holds that all the adverse
findings appealed should be either upheld or reversed75
because, the nursing home had argued and the government
did not dispute that, the unreviewed findings “remain
accessible to the public and can be used to support damage
claims against the provider in private litigation.”76
73
603 F.3d 412 (8th Cir. 2010).
74
Id. at 417.
75
Id.76
Id. at 423.
30 PLOTT NURSING HOME V. BURWELL
The Sixth Circuit, in Claiborne-Hughes Health Center v.
Sebelius,77 upheld a Board determination where only one of
seven alleged deficiencies was reviewed. In Claiborne,
unlike this case, the minimum statutory penalty was imposed,
so it could not have been reduced even if all six unreviewed
deficiency allegations had been overturned.78 The court held
that in the interest of judicial economy, the agency could
“choose to address only those deficiencies that have a
material impact on the outcome of the dispute.”79
Claiborne is distinguishable because the penalty in our
case could have been lower than it was, but we would
disagree with it regardless. The Board holds that “repeated
deficiencies” must necessarily be given weight and result in
more severe fines, and reversed the ALJ in this case for not
giving weight to prior unreviewed deficiencies. That means
that unreviewed deficiencies do, in fact, have a material
impact. One might argue that their impact is only on a future
dispute, not the present one, but that implies the impractical
result that review may take place only later, when it is less
reliable, not earlier, when it can be more reliable. Also, since
surveys are mandatory at least every fifteen months,80 the
agency’s supervisory relationship with the nursing home is
one continuing relationship, not an occasional discrete case.
For materiality purposes, the history of prior deficiencies is
always part of that nursing home’s continuing case, under the
77
609 F.3d 839 (6th Cir. 2010).
78
Id. at 842.
79
Id. at 847.
80
42 U.S.C. § 1395i-3(g)(2)(A)(iii).
PLOTT NURSING HOME V. BURWELL 31
statutory requirement for incrementally more severe penalties
as interpreted by the agency.
V. Conclusion
We hold that substantial evidence on the record as a
whole sufficed to support the bed sore deficiency in regard to
Resident 6, but there was not substantial evidence on the
record taken as a whole to support the UTI deficiency in
regards to Resident 5. We further hold that if a provider
appeals a deficiency claimed in a survey, the deficiency must
either be dismissed or reviewed. Regarding the public
website, we hold that the agency need not afford review
before survey results are posted, but must allow review and
correction as required by the statute.81
We remand to the Board to (1) review or dismiss the
unreviewed and appealed deficiencies alleged, and
(2) reconsider the penalty in light of our reversal of the
Resident 5 determination.
REVERSED in part and REMANDED.
CHRISTEN, Circuit Judge, concurring in part and dissenting
in part:
I concur in the court’s holding with respect to the two
deficiencies that formed the basis of the $500 per day penalty
sustained by the Department of Health and Human Services
81
42 U.S.C. § 1395i-3(i)(B)(2).
32 PLOTT NURSING HOME V. BURWELL
Appeals Board. But because the court’s holding as to the
unreviewed deficiencies accords with neither our statutory
jurisdiction nor with well-established principles of judicial
review, I respectfully dissent from Part C of the court’s
analysis.
The skilled nursing facility provisions of the Medicare
Act provide: “[T]he Secretary may impose a civil money
penalty in an amount not to exceed $10,000 for each day of
noncompliance. The provisions of section 1320a-7a of this
title (other than subsections (a) and (b)) shall apply to a civil
money penalty . . . .” 42 U.S.C. § 1395i-3(h)(2)(B)(ii)(I).
Section 1320a-7a(e) gives this court original jurisdiction over
appeals from the Secretary’s decision to impose a civil money
penalty.1
In its decision in this case, the Board concluded,
consistent with its prior decisions, that neither it nor the ALJ
was required to address noncompliance findings not material
to the penalty imposed. The court concludes that unreviewed
deficiencies were in fact material to the Board’s decision to
uphold the $500 per day penalty. In reaching this conclusion,
1
The Medicare Act gives federal district courts original jurisdiction over
appeals from most determinations by the Secretary of Health and Human
Services. See 42 U.S.C. § 1395cc(h)(1)(A) (referencing 42 U.S.C.
§ 405(g)). Only civil money penalty assessments are directly appealable
to a circuit court. See 42 U.S.C. § 1395i-3(h)(2)(B)(ii)(I) (referencing
42 U.S.C. § 1320a-7a); Shalala v. Ill. Council on Long Term Care, Inc.,
529 U.S. 1, 8 (2000); Sunshine Haven Nursing Operations, LLC v. U.S.
Dep’t of Health & Human Servs., Ctrs. for Medicare & Medicaid Servs.,
742 F.3d 1239, 1249 (10th Cir. 2014) (“[O]ut of all the remedies the
Secretary may impose, Congress has specified that challenges to [civil
money penalties], not challenges to other noncompliance remedies, may
go directly to a circuit court under 42 U.S.C. § 1320a-7a(e).”).
PLOTT NURSING HOME V. BURWELL 33
the court relies on the fact that the Board used unreviewed
deficiencies from 2005 and 2007 surveys to support the
penalty imposed.2 But Plott does not contest the Board’s
reliance on the 2005 or 2007 deficiencies. Instead, Plott
challenges the agency’s refusal to review or dismiss all of the
deficiencies identified in the September 2008 survey. The
Board clearly did not rely on the 2008 unreviewed
deficiencies in upholding the $500 per day penalty, and our
jurisdiction is limited to reviewing the Board’s decision with
respect to that penalty.
The court overlooks our lack of jurisdiction and directs
the agency to review or dismiss all of the 2008 unreviewed
deficiencies. The court points out that the agency might use
these deficiencies to determine the reasonableness of a
penalty in a later proceeding. I agree that the agency’s
practice of using unreviewed deficiencies from prior surveys
to support a later penalty is troubling. If Plott had asked our
panel to review this practice by contesting the Board’s
reliance on the unreviewed deficiencies from 2005 and 2007,
I might have concluded that the agency’s practice is
impermissible. But Plott waived this challenge by failing to
raise it in its briefing. See Smith v. Marsh, 194 F.3d 1045,
1052 (9th Cir. 1999).
2
The Medicare Act and applicable regulations require the Secretary to
impose more severe fines for repeated deficiencies. See 42 U.S.C.
§ 1395i-3(h)(2)(B)(iii) (“The Secretary shall specify criteria, as to . . . the
amounts of any fines . . . . Such criteria . . . shall provide for the
imposition of incrementally more severe fines for repeated or uncorrected
deficiencies.”); 42 C.F.R. § 488.438(f) (“In determining the amount of
penalty, CMS does or the State must take into account the following
factors: (1) The facility’s history of noncompliance, including repeated
deficiencies. . . .”).
34 PLOTT NURSING HOME V. BURWELL
The court argues it is preferable to force the agency to
review all of the 2008 deficiencies now, in case they are used
to support a penalty later, because review will be easier and
more reliable now. But this court’s subject matter
jurisdiction is defined by Congress, and here, Congress has
specified that we may directly review only the Board’s
penalty determination. See 42 U.S.C. § 1320a-7a(e). This
court is not at liberty to expand its jurisdiction so that we may
effect what, in our view, is sound policy. See Keene Corp. v.
United States, 508 U.S. 200, 207 (1993) (“Congress has the
constitutional authority to define the jurisdiction of the lower
federal courts, and, once the lines are drawn, limits upon
federal jurisdiction . . . must be neither disregarded nor
evaded.” (citation and internal quotation marks omitted)).
The court raises the spectre that, absent its holding, the
only means Plott would have to challenge the unreviewed
2008 deficiencies would be to wait until they are used to
support a penalty. But at oral argument, counsel for the
agency suggested that if Plott has a due process claim
stemming from the unreviewed deficiencies, Plott could bring
an action in district court. See Shalala v. Ill. Council on Long
Term Care, Inc., 529 U.S. 1, 19–20 (2000); see also 5 U.S.C.
§ 704. I do not opine on whether such a challenge would be
successful, but the parties do not dispute that Plott has a
forum, and if Plott disagreed with the district court’s decision,
it could then properly appeal to our court.
The wisdom of jurisdictional and waiver rules is that they
prevent courts from overreaching. Because: (1) Plott did not
raise the issue of the Board’s reliance on the 2005 and 2007
unreviewed deficiencies; (2) the issue of whether the agency
might rely on the unreviewed 2008 deficiencies to support a
future penalty is not ripe; and (3) our jurisdiction under
PLOTT NURSING HOME V. BURWELL 35
42 U.S.C. § 1320a-7a(e) is limited to reviewing the $500 per
day penalty assessment, I would leave the question of the
propriety of the agency’s use of unreviewed deficiencies for
another day. The court instead requires that the agency
change its procedures wholesale. As a result, it may become
more difficult for the agency to ensure the safety of our
nation’s many skilled nursing facilities. Either the agency
will have to devote much more time and energy to
adjudicating deficiencies on which no penalty is based, or the
agency will have to dismiss all such deficiencies. This result
may be a good thing in the long run, or it may be a bad
thing—it is hard to tell because the agency has not had an
adequate opportunity to defend its procedures in this appeal.
I respectfully dissent from Part C of the court’s analysis.