Liberty Commons Nursing & Rehab Center v. Leavitt , 241 F. App'x 76 ( 2007 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1868
LIBERTY COMMONS NURSING AND REHAB CENTER -
JOHNSTON,
Petitioner,
versus
MICHAEL O. LEAVITT, Secretary of the United
States Department of Health & Human Services;
U. S. DEPARTMENT OF HEALTH & HUMAN SERVICES,
Respondents.
On Petition for Review of an Order of the United States Department
of Health & Human Services. (A-05-91; CR1294)
Argued: May 23, 2007 Decided: July 20, 2007
Before WILLIAMS, Chief Judge, MOTZ, Circuit Judge, and HAMILTON,
Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
ARGUED: Joseph L. Bianculli, HEALTH CARE LAWYERS, P.L.C.,
Arlington, Virginia, for Petitioner. Sonia Gaye Burnett, Assistant
Regional Counsel, UNITED STATES DEPARTMENT OF HEALTH & HUMAN
SERVICES, Office of the General Counsel, Washington, D.C., for
Respondents. ON BRIEF: Daniel Meron, General Counsel, Christine A.
Bradfield, Acting Chief Counsel, Region IV, UNITED STATES
DEPARTMENT OF HEALTH & HUMAN SERVICES, Office of the General
Counsel, Washington, D.C., for Respondents.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
A North Carolina nursing facility challenges the determination
of the Department of Health and Human Services that the facility’s
noncompliance with federal regulations was at the “immediate
jeopardy” level under the regulatory framework. Finding no error,
we affirm the agency’s determination. We also reject the nursing
facility’s contention that the agency’s review process violated the
Administrative Procedure Act or due process requirements.
I.
Federal regulations require that nursing facilities receiving
Medicare funds comply with certain safety requirements. If
surveyors find a facility has failed to comply, they assess the
level of the noncompliance to determine the appropriate penalty.
See, e.g., 42 U.S.C. 1395i-3(h) (2006); 42 C.F.R. §§ 483.1 et seq.
(2006); § 488.301 (2006). Liberty Commons, a nursing facility in
Benson, North Carolina, participates in and receives funds from
Medicare, and was surveyed for regulatory compliance on October 23,
2003. The North Carolina State Department of Health and Human
Services conducted the annual survey as an agent for the Centers
for Medicare and Medicaid Services (CMS), an agency of the federal
department of Health and Human Services (HHS or “the Secretary”).
The surveyors found that Liberty Commons had neglected to
provide proper care to residents, in violation of 42 C.F.R. §
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483.13(c) (2006). In particular, one resident of the facility,
referred to as Resident #2, was cared for on October 21, 2003, by
a nurse’s assistant wearing latex gloves, even though the resident
had a documented allergy to latex of which the nursing facility was
aware. The resident then complained of shortness of breath, and
was hospitalized.
CMS found that the following series of staff errors at the
nursing home had led to this noncompliance: (1) the nurse’s
assistant was unfamiliar with the resident and his allergy; (2)
warning signs about the latex allergy were missing from the
resident’s room; (3) the nurse’s assistant did not receive a verbal
warning at the beginning of her shift about the allergy; and (4)
the nurse’s assistant failed to consult the resident's record until
the end of her shift. Accordingly, CMS found that the
noncompliance was at the “immediate jeopardy” level, and the
Secretary imposed a civil monetary penalty.
Liberty Commons challenged the CMS decision through the
administrative adjudication process provided by HHS. Following a
January 12, 2005 hearing, an Administrative Law Judge (ALJ) upheld
the findings of noncompliance and immediate jeopardy, but reduced
the fine against the nursing facility. The ALJ found that although
Liberty Commons had a plan for preventing this type of violation --
i.e. providing care to patients with known allergies -- it was lax
in implementing this plan and had not sufficiently trained its
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staff, and that the multiple failures to alert the nurse’s
assistant constituted “persuasive proof that [the] problem was
systemic.”
The ALJ further concluded that even if there was not
sufficient medical evidence to establish that Resident #2 did have
a latex allergy, an “immediate jeopardy” designation was still
appropriate because of “the weakness of [Liberty Commons’] system
for protecting its residents demonstrated by the series of errors
that occurred in providing care to Resident #2.” It is not
disputed that at the time of the incident, Liberty Commons believed
Resident #2 did have a latex allergy. The ALJ inferred from the
treatment given to Resident #2 “that other residents would be
jeopardized when placed in similar circumstances and that there
would be a likelihood of serious injury, harm, or death as a
consequence” and that “[t]he systemic failure to implement
protective measures . . . would jeopardize any resident who is
dependent on a staff to treat him or her subject to safety
precautions.” Several other residents of Liberty Commons had
allergies to foods or other substances, so the facility’s “systemic
failure” to handle residents’ allergies with appropriate
precautions could endanger them, as well as future residents with
allergies or special needs. See Respondent’s Br. at 18.
Liberty Commons appealed the ALJ decision to the HHS
Departmental Appeals Board (DAB). The DAB, in a June 12, 2006
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decision, held that (1) the ALJ’s conclusion that Liberty Commons
was not in substantial compliance was supported by substantial
evidence, and (2) the immediate jeopardy finding was not clearly
erroneous.
Liberty Commons concedes that it failed to comply with the
regulatory requirements. It contends, however, that the Secretary
erred in determining that the noncompliance rose to the “immediate
jeopardy” level. It maintains that because the evidence does not
sufficiently establish that Resident #2 actually had a latex
allergy or suffered serious harm because of the noncompliance,
neither he nor any other particular, identifiable resident was
likely to be harmed by its particular violations on October 21,
2003. Liberty Commons also asserts that the DAB applied the wrong
burden of proof in its review of the ALJ decision. Br. of
Petitioner at 41-50.
II.
A.
The federal regulation at issue here defines “immediate
jeopardy” as “a situation in which the provider’s noncompliance
with one or more requirements of participation has caused, or is
likely to cause, serious injury, harm, impairment, or death to a
resident.” 42 C.F.R. § 488.301. Liberty Commons does not dispute
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that this provision controls the case; it merely disagrees with how
the Secretary has interpreted and applied the regulation.
“When the question before the court is whether an agency has
properly interpreted and applied its own regulation, the reviewing
court must give the agency’s interpretation ‘substantial
deference.’” Maryland General Hosp. v. Thompson, 308 F.3d 340, 343
(4th Cir. 2002). That said, “an interpretation that is
inconsistent with the plain language of an unambiguous regulation
cannot be upheld simply because the interpretation, standing alone,
seems reasonable enough.” Id. at 347. Thus, we must defer to the
Secretary’s reasonable interpretation of the regulation so long as
it is not inconsistent with the plain language of the regulation.
Moreover, we must defer to the agency’s findings of fact “if
supported by substantial evidence on the record considered as a
whole.” 42 U.S.C. § 1320a-7a(e) (2006).
Liberty Commons argues that the Secretary has misinterpreted
and misapplied the regulation in question in finding that the
facility was in noncompliance at the “immediate jeopardy” level.
Liberty Commons rests its case -- as it must given the deference
owed to the agency’s interpretation of its regulation -- on its
reading of “the regulation’s plain language,” Br. of Petitioner at
39, which it asserts is “clear and unambiguous,” id. at 22.
Liberty Commons reads the “the plain language” of the regulation to
state that an “immediate jeopardy” finding “requires a
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determination of [the noncompliance’s] impact on one or more of the
facility’s actual residents.” Petitioner’s Reply Br. at 9
(emphasis added).
But these are the words of Liberty Commons, not of the
regulation. By its terms, the regulation only requires that the
nursing home’s noncompliance is likely to cause harm to “a
resident.” 42 C.F.R. § 488.301 (emphasis added). The word
“actual” does not appear in the regulation; the phrase “one or
more” does appear in the regulation, but in reference to the
nursing home’s noncompliance with “one or more requirements” of the
regulatory scheme, not as a modifier of “resident.” Cf. Br. of
Petitioner at 22; Petitioner’s Reply Br. at 9.
The use of the indefinite article “a” -- and no other modifier
-- before “resident” suggests that the regulation does not require
that the noncompliance jeopardizes “one or more actual” or
identifiable residents. If the Secretary had intended that
specific requirement, he would have used that language in writing
the rule. Moreover, because no actual harm to a resident is
required for an “immediate jeopardy” finding, only “likely” harm,
the definition as a whole encompasses future harms to an as yet
unidentified resident. If, as Liberty Commons insists, the
regulation required otherwise, there would be no need to include
the word “likely” -- for an actual resident either would or would
not have been harmed. For these reasons, we believe the
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Secretary’s view -- that “a resident” has a broader meaning and
does not require establishing harm from a particular, identifiable
compliance violation to a particular, identifiable, resident -- is,
at the very least, a reasonable interpretation of the regulation’s
language, to which we must defer. See Maryland General Hosp., 308
F.3d at 343.
Accordingly, Liberty Commons cannot prevail. Substantial
evidence supports the ALJ’s determination that the facility's
noncompliance problem was “systemic.” That is, the noncompliance
consisted not merely of using latex on a single resident believed
to be allergic to latex, but also of failing to follow the
necessary plan and procedures to protect residents who have
allergies. As the ALJ found, “the weakness of [Liberty Commons’]
system for protecting its residents [is] demonstrated by the series
of errors that occurred in providing care to Resident #2.” For
this reason, the ALJ concluded that “[t]he systemic failure to
implement protective measures . . . would jeopardize any resident
who is dependent on a staff to treat him or her subject to safety
precautions.” Finding no error, we affirm the Secretary’s
determination that the noncompliance met the requirement of
“immediate jeopardy” under the governing regulation.
B.
Liberty Commons further contends that the burden of proof the
Secretary applied during the administrative review process
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“offend[s]” the Administrative Procedure Act (APA), 5 U.S.C. § 500et seq. (2000), and due process of law. Br. of Petitioner at 23;
41-50. In particular, Liberty Commons objects that, after the ALJ
found it was not in compliance, the DAB placed the burden on it,
the petitioner, to show that CMS’s determination that the
noncompliance was at the “immediate jeopardy” level was clearly
erroneous, rather than requiring the Secretary to again establish
this during the appeals procedure.
This argument ignores the relevant regulation, which
explicitly sets forth the burden of proof with respect to the level
of noncompliance: “CMS’s determination as to the level of
noncompliance . . . must be upheld unless it is clearly erroneous.”
See 42 C.F.R. § 498.60 (2006). In light of the clear instructions
in this regulation, which the Board unquestionably followed, we
construe Liberty’s argument here to be either that (1) HHS lacks
statutory authority to have issued this regulation, or (2) the
regulation is unconstitutional. Neither is the case.
The APA, on which Liberty relies, only creates default rules
for agency adjudications. But Congress, in the Social Security
Act, 42 U.S.C. §§ 1302, 1395hh (2006), empowered HHS to create
regulations for its Medicare adjudications, and so the APA
provision relied on by Liberty Commons simply does not apply to
this case. Moreover, we find no support for the position that the
agency appeal procedure violates the Constitution’s Due Process
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Clause. The purpose of the statutory and regulatory framework is
to guide the distribution of Medicare funds to appropriate
facilities -- namely, those that comply with safety regulations.
To be sure, Liberty Commons was due some process before being
sanctioned and fined for a regulatory violation, see Mathews v.
Eldridge, 424 U.S. 319, 334-35 (1976). But, it received a full
evidentiary hearing before an ALJ, followed by an opportunity to
appeal the ALJ’s decision to the DAB. Balancing the Government’s
interests in spending Medicare funds appropriately and protecting
the safety of nursing home residents, and a nursing home’s interest
in the financial and reputational cost of the noncompliance
finding, we can only conclude that the process Liberty Commons
received was sufficient to reduce the risk of erroneous
deprivation. Id. Because Liberty Commons received all the process
it was due, its constitutional due process claim must also fail.
III.
For the foregoing reasons, the order of the Secretary is
AFFIRMED.
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