SunBridge Care and Rehabilitation v. Leavitt , 340 F. App'x 929 ( 2009 )

UNPUBLISHED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 United States
Department of Health & Human Services; UNITED STATES
DEPARTMENT OF HEALTH & HUMAN SERVICES,
Respondents.
On Petition for Review of an Order of the United States
Department of Health & Human Services. (A-08-7)
Argued: March 26, 2009 Decided: 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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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. An agency of HHS, the Centers for Medicare &
Medicaid Services (“CMS”), made the initial determination of
non-compliance and assessed the civil monetary penalties. 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 nursing facility located in
Pembroke, North Carolina. Among the responsibilities SunBridge
undertakes is to 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. He suffered minor injuries to
his arm and shoulder. 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 (“NC HHS”) responded to a complaint about
SunBridge. 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 U.S.C. § 1395aa;
42 C.F.R. § 488.10(a)(1). 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. §§
488.404(b), 488.408.
Following the survey, NC HHS issued a Statement of
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. NC HHS found
that Sunbridge’s non-compliance posed “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. 42
C.F.R. § 498.40. 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. For our
purposes, the DAB’s decision constitutes the final agency
decision. 42 U.S.C. § 1320a-7a(e); 42 C.F.R. § 498.90(c)(1).
We 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 HHS has the authority to regulate motor vehicle
travel; (2) whether HHS applied an improper burden-shifting
framework that required the facility to demonstrate its
compliance with the regulations by a preponderance of the
evidence; (3) whether substantial evidence demonstrates that
SunBridge was not in substantial compliance with the 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. Although SunBridge correctly notes that
the Social Security Act and 42 C.F.R. § 483.25 do not
specifically mention motor vehicles, this court has recently
held that HHS reasonably interpreted section 483.25(h)(1) to
authorize the issuance of citations to skilled nursing
facilities for violations arising from the use of motor
vehicles. 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 establish the
elements of any affirmative argument or defense.” Id. at *13.
The facility “bears the ultimate burden of 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 substantial
compliance with the health and safety regulations. We accept as
conclusive HHS’s findings of fact “if supported by substantial
evidence on the record considered as a whole.” 42 U.S.C. §
1320a-7a(e). Substantial evidence is “such relevant evidence as
a reasonable mind might accept as adequate to support a
conclusion.” 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 this regulation because staff
11
members improperly fastened the safety belts of residents in
wheelchairs.
First, the record shows that the safety belts worked
properly when buckled to the floor behind the 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. A member of the NC HHS
survey team also indicated, in 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 safety belt in front of the wheelchair. The
surveyor also noted that a driver had admitted that safety
harnesses could not be buckled behind the wheelchairs whenever
at least four wheelchairs were in the van, which occurred at
least three times per week. SunBridge also proffered no
documentary evidence that staff members buckled safety 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. Me.
Veterans’ Home – Scarborough v. Ctrs. for Medicare Medicaid
Servs., DAB No. 1975, 2005 HHSDAB LEXIS 54, at *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.” Id. at *17-18.
Substantial 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.” (A.R. 842.)
SunBridge also should have known to engage in such an
investigation after the accident involving Resident 3, who
Sunbridge admits slid down in her wheelchair. 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 resources effectively and efficiently to attain or
maintain the highest practicable physical, mental, and
psychosocial well-being of each resident.” “[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. Sunbridge’s corporate
manual directs supervisors to “immediately investigate the
accident to determine the . . . cause” and to take steps “to
eliminate that cause.” (A.R. 449.) Although SunBridge
investigated the accidents, it merely 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. SunBridge’s corporate
manual requires drivers to be trained “on how to report an
accident and what to do at the scene.” (A.R. 449.) 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 on-
duty 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 notice of the
alleged deficiencies, as mandated by the APA. 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 the amount of the civil
monetary penalties in this appeal.
16
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). An
agency contravenes this notice provision if it sustains a
violation different from any that is clearly listed on the
charging document. See, e.g., Bendix Corp. v. FTC, 450 F.2d
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. 97-
1385, 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 suffered prejudice from the allegedly
insufficient notice. 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, SunBridge claims that CMS accepted a
compliance plan requiring the installation and use 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 to provide safe transportation for 2 of 2
residents” and would remain out of compliance with section
483.25(h)(1) until it implemented a method that would “safely
secure residents for transportation.” (J.A. 6.) Furthermore,
8
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 provided SunBridge with adequate 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