Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-70174/USCOURTS-ca9-12-70174-0/pdf.json

Parties Involved:
California Association of Health Facilities
Amicus Curiae
Plott Nursing Home
Petitioner
Kathleen Sebelius
Respondent

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PLOTT NURSING HOME,

Petitioner,

v.

SYLVIA MATHEWS BURWELL,

*

Secretary of the United States

Department of Health and Human

Services,

Respondent.

No. 12-70174

HHS No.

A-11-66

OPINION

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.

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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.

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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.

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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.

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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/Regulationsand-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMsItems/CMS1201984.html?DLPage=1&DLSort=0&DLSortDir=ascending.

 

9

Id. at Chapter 7, §7201.2.

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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.11If 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

facilitymay 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).

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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).

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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

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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).

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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 3431deficiencies 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,32and 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 theywere

unavoidable; and (2) [a] resident having pressure sores receives necessary

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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,34such

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.

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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,36but 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). 

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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).

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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).

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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).

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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

exceedinglydifficult,the regulation requires nursing facilities

to “ensure” that “pressure sores do[] not develop” and that a

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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 facilitymust ensure

that [] [a] resident who enters the facility without pressure

sores does not develop pressure sores unless the individual’s

clinical condition demonstrates that theywere 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).

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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.

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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.

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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.

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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).

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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

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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.”55In 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 ofthe

Social Security Act to civil money penalties under section 1320a-7a(a).

 

55 Id. § 1320a-7a(e).

 

56 529 U.S. 1 (2000).

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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).

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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 selfreported 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-StarQuality Rating System: Technical Users’ Guide

(July 2012) at 4, available at https://www.cms.gov/Medicare/ProviderEnrollment-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.

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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).

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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.

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weight must be given to prior noncompliance even if “no

remedy was imposed at the time.”71 The Board cites the

statutorylanguage requiring “incrementallymore 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

penaltywas 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).

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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.

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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,80the

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).

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statutory requirement for incrementallymore 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).

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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).”).

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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. . . .”).

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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

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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.

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