SunBridge Care and Rehabilitat v. Michael Leavitt, No. 08-1603 (4th Cir. 2009)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 08-1603 SUNBRIDGE CARE AND REHABILITATION FOR PEMBROKE, Petitioner, v. MICHAEL O. LEAVITT, Secretary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, United UNITED States STATES Respondents. On Petition for Review of an Order of the Department of Health & Human Services. (A-08-7) Argued: March 26, 2009 Decided: United States 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 Affirmed by unpublished per curiam opinion.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 Unpublished opinions are not binding precedent in this circuit. 2 PER CURIAM: SunBridge Care and Rehabilitation Pembroke ( SunBridge ), a skilled nursing facility that provides care to Medicare and Medicaid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 Services agency of ( CMS ), HHS, made the the Centers initial for Medicare determination non-compliance and assessed the civil monetary penalties. & of These determinations were upheld by both an Administrative Law Judge ( ALJ ) and the Departmental Appeals Board ( DAB ). For the reasons set forth below, we affirm. I. SunBridge is a skilled Pembroke, North Carolina. undertakes is to nursing facility located in Among the responsibilities SunBridge transport its wheelchair-bound residents to 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 1 The administrative record also includes complaints involving Resident 2, which are not relevant to this appeal. 4 Human Services SunBridge. ( NC HHS ) responded to a complaint about 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. §§ Statement of 488.404(b), 488.408. Following the survey, NC HHS issued a Deficiencies in which it determined that SunBridge was not in substantial compliance with two health and safety regulations, 2 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). 3 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). 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 NC HHS found immediate 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 subsequently affirmed the determination. In sum, the ALJ held 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, the decision. We DAB s decision constitutes the For our final agency 42 U.S.C. § 1320a-7a(e); 42 C.F.R. § 498.90(c)(1). exercise jurisdiction pursuant to 42 U.S.C. §§ 1395i- 3(h)(2)(B)(ii) and 1320a-7a(e). II. In the petition for review, SunBridge raises four issues: 4 (1) whether travel; (2) framework compliance HHS has the authority whether HHS applied that required with evidence; (3) SunBridge was the in an regulate improper facility regulations whether not the to by substantial substantial a to motor burden-shifting demonstrate preponderance evidence vehicle of demonstrates compliance with the its the that HHS regulations; and (4) whether the civil monetary penalties were upheld on grounds other than those identified by CMS. 5 4 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 ). 5 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 A. SunBridge argues that HHS lacks the authority to regulate motor vehicle travel. the Social Security specifically held that authorize facilities vehicles. Although SunBridge correctly notes that Act mention motor HHS reasonably the issuance for violations and 42 C.F.R. vehicles, interpreted of this from 483.25 court section citations arising § to the has do not recently 483.25(h)(1) skilled use to nursing of 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 with the regulations by a preponderance of the evidence. 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). 6 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. 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 elements of any affirmative argument or defense. The facility bears the ultimate burden of establish the 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 compliance with the health and safety regulations. substantial We accept as conclusive HHS s findings of fact if supported by substantial evidence on the record considered as a whole. 1320a-7a(e). a 42 U.S.C. § Substantial evidence is such relevant evidence as reasonable conclusion. mind might accept as adequate to support a Richardson v. Perales, 402 U.S. 389, 401 (1971) (internal quotations and citation omitted). It consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance. Laws v. Celebrezze, 368 F.2d 640, 642 (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 members improperly fastened the safety belts of residents in wheelchairs. First, properly the when record buckled shows to that the the floor safety behind belts the worked 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 both the wheelchair and the resident. survey team also indicated, in A member of the NC HHS both the Statement of 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 the surveyor safety also noted belt in front a driver that of the had wheelchair. admitted that The safety harnesses could not be buckled behind the wheelchairs whenever at least four wheelchairs were in the van, which occurred at least three documentary times per evidence week. that SunBridge staff members also proffered buckled safety no 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 evidence that the harm to the residents was foreseeable. Veterans Servs., Home DAB No. Scarborough 1975, 2005 v. Ctrs. HHSDAB for LEXIS Medicare 54, at Me. Medicaid *11 (2005) (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 investigation Sunbridge should after admits have the slid known accident down in to engage involving her (A.R. 842.) in such Resident wheelchair. an 3, who 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 maintain resources the effectively highest and efficiently practicable physical, psychosocial well-being of each resident. to attain mental, or and [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 immediately investigate the accident to determine the . . . cause and to take steps to eliminate that investigated cause. the (A.R. accidents, it 449.) Although merely SunBridge interviewed a few 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 accident and what to do at the scene. SunBridge s corporate on how to (A.R. 449.) report an 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. We find this contention to be without merit. SunBridge claims that it lacked timely alleged deficiencies, as mandated by the APA. notice of the The APA requires procedural fairness in the administrative process. Rapp v. 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 7 SunBridge does not challenge monetary penalties in this appeal. 16 the amount of the civil an agency hearing shall be timely informed of . . . the matters of fact and law asserted. 5 U.S.C. § 554(b)(3); see Clearwater Finishing Co. v. NLRB, 670 F.2d 464, 468 (4th Cir. 1982). agency contravenes violation this different notice from any provision that is if clearly it An sustains listed on a the See, e.g., Bendix Corp. v. FTC, 450 F.2d charging document. 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 apprised of the issues in controversy[] and is not misled. St. 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 insufficient notice. suffered prejudice from the allegedly 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 finding, compliance plan SunBridge requiring claims the that CMS installation accepted and use a of supplemental lap belts. We disagree with Sunbridge s characterization and find that the Statement of Deficiencies satisfies the notice provision of the APA. The Statement of Deficiencies clearly indicates that SunBridge failed residents and to provide would remain safe out transportation of compliance for with 2 of 2 section 483.25(h)(1) until it implemented a method that would safely secure residents for transportation. 8 (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.) 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. Thus, the Statement of Deficiencies adequate provided SunBridge with notice that improper use of the safety belts was the basis of the accident hazard deficiency. III. For the foregoing reasons, the decision of the DAB is affirmed. AFFIRMED 19